Kilroy Realty Completes Acquisition of Development Opportunity in Vibrant South Lake Union Submarket of Seattle
February 17 2015 - 8:30PM
Business Wire
In-Place Zoning to Develop Approximately
700,000 Square Feet of Office, Retail and Residential in One of the
Strongest Performing Submarkets in the U.S.
Kilroy Realty Corporation (NYSE: KRC) announced today
that it has completed the acquisition of its first development
opportunity in the highly sought-after submarket of South Lake
Union in Seattle, Washington for approximately $50 million. The
acquisition includes a full city block site, 333 Dexter Avenue
North, along with three smaller adjacent parcels, which in total
aggregate 2.4 acres. They are in close proximity to leading global
technology and life science innovators, including the Bill &
Melinda Gates Foundation, Amazon.com, UW Medicine and most recently
Facebook, which just announced its plans for a major expansion on
Dexter Avenue. 333 Dexter is currently home to KING-TV
Broadcasting.
Bounded by Dexter Avenue and Highway 99/Aurora Avenue, 333
Dexter is less than 500 yards from Seattle’s iconic Space Needle
and has direct access to key regional transportation routes. South
Lake Union is the recent beneficiary of significant state and
municipal transportation infrastructure improvement projects with
work currently underway to connect the east-west arterials adjacent
to 333 Dexter to the amenity-rich Uptown neighborhood.
KRC has commenced the design phase for the project and has
engaged The Miller Hull Partnership to assist in the planning for
the development of two state-of-the-art, twelve-story office towers
that will provide attractive amenities, vibrant retail and dynamic
open public spaces. Existing zoning permits the development of
approximately 700,000 square feet of office, residential and retail
space. Subject to market conditions and final permits, construction
could begin as early as 2016. KRC estimates its total investment in
the project, including land, will total approximately $375 million,
depending on the eventual mix of product types.
“333 Dexter will be a premier office location in South Lake
Union. We expect demand to continue to grow in this neighborhood as
many leading technology companies have selected this area as their
new Seattle home and KRC is well positioned to capture this
continuing growth,” said Mike Shields, senior vice president of
KRC’s Pacific Northwest region.
“The development opportunity at 333 Dexter is consistent with
our initiative of expanding our opportunity pipeline in strong
performing submarkets driven by innovative and dynamic companies,”
said John Kilroy, Jr. the company’s chairman, president and chief
executive officer. “We expect to generate significant value by
delivering the type of work environment that is most sought after
in today’s market.”
About Kilroy Realty Corporation. With more than 65 years’
experience owning, developing, acquiring and managing real estate
assets in West Coast real estate markets, Kilroy Realty Corporation
(KRC), a publicly traded real estate investment trust and member of
the S&P MidCap 400 Index, is one of the region’s premier
landlords. 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 December 31, 2014, the company’s stabilized
portfolio totaled 14.1 million square feet of office
properties, all located in the coastal regions of greater Seattle,
the San Francisco Bay Area, Los Angeles, Orange County and San
Diego. The company is recognized by the Global Real Estate
Sustainability Benchmark (GRESB) as the North American leader in
sustainability and was ranked first among 151 North American
participants across all asset types. At the end of the fourth
quarter, the company’s properties were 39% LEED certified and 56%
of eligible properties were ENERGY STAR certified. In addition, KRC
had approximately 1.7 million square feet of new office and
mixed-use development under construction with a total estimated
investment of approximately $1.0 billion. More information is
available at http://www.kilroyrealty.com.
Forward-Looking Statements. This press release contains
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Forward-looking
statements are based on our current expectations, beliefs and
assumptions, and are not guarantees of future performance.
Forward-looking statements are inherently subject to uncertainties,
risks, changes in circumstances, trends and factors that are
difficult to predict, many of which are outside of our control.
Accordingly, actual performance, results and events may vary
materially from those indicated in forward-looking statements, and
you should not rely on forward-looking statements as predictions of
future performance, results or events. Numerous factors could cause
actual future performance, results and events to differ materially
from those indicated in forward-looking statements, including,
among others, risks associated with: investment in real estate
assets, which are illiquid; trends in the real estate industry;
significant competition, which may decrease the occupancy and
rental rates of properties; the ability to successfully complete
acquisitions and dispositions on announced terms; the ability to
successfully operate acquired properties; the availability of cash
for distribution and debt service and exposure of risk of default
under debt obligations; adverse changes to, or implementations of,
applicable laws, regulations or legislation; and the ability to
successfully complete development and redevelopment projects on
schedule and within budgeted amounts. These factors are not
exhaustive. For a discussion of additional factors that could
materially adversely affect our business and financial performance,
see the factors included under the caption “Risk Factors” in our
annual report on Form 10-K for the year ended December 31,
2014 and our other filings with the Securities and Exchange
Commission. All forward-looking statements are based on information
that was available, and speak only as of the date on which they are
made. We assume no obligation to update any forward-looking
statement made in this press release that becomes untrue because of
subsequent events, new information or otherwise, except to the
extent required in connection with ongoing requirements under U.S.
securities laws.
Kilroy Realty CorporationTyler H. RoseExecutive Vice President
and Chief Financial Officer(310) 481-8484orMichelle NgoSenior Vice
President and Treasurer(310) 481-8581
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