LOS ANGELES -- (Business Wire)
Kilroy Realty Corporation (NYSE: KRC) today announced that
it has acquired for $106.1 million, a four-story, LEED Gold-certified,
life science property located at 401 Terry Avenue North in the heart of
the South Lake Union submarket of Seattle. The project includes a
three-level subterranean parking structure that provides an above market
parking ratio of 2/1,000 and is immediately adjacent to KRC’s
two-building Westlake Terry campus.
Developed in 2003 and situated on a half city block, 401 Terry’s highly
desirable location is central to both general office and life science
industries and is situated amidst technology and medical research
innovators, including Amazon.com, the Bill and Melinda Gates Foundation
and the Fred Hutchinson Cancer Research Center. The property is located
on the South Lake Union Streetcar line, which connects riders to the
regional bus tunnel and light rail systems.
401 Terry is one of only five life science facilities developed in the
Puget Sound Region during the last ten years. The concrete constructed
property features a superior building design reflecting 36,000 square
foot floor plates, floor-to-floor heights of 14 to 19 feet and augmented
floor thickness. Additionally, the property encompasses many
above-standard specifications such as enhanced loading and seismic
capabilities as well as above-standard building systems, including
independent air handling and redundant power systems serving the
laboratory space.
401 Terry is 100% leased through 2021 to Institute for Systems Biology
(ISB), a leader in the field of developing new strategies in biology and
medicine. The existing lease to ISB totals 140,605 square feet. Based on
current Building Owners and Managers Association (BOMA) standards, the
building’s rentable square footage on a single-tenant basis exceeds
153,000 square feet.
“In today’s environment, in which core pricing has been extremely
aggressive, this is another example of how our leading West Coast
franchise has allowed us to acquire a fully-leased premier asset at an
in-place cap rate of 6% and where in-place rents are approximately 20%
below market,” said John Kilroy, Jr., the company’s chairman, president
and chief executive officer.
“401 Terry is a tremendously valuable addition to our portfolio. The
South Lake Union neighborhood is one of the most dynamic urban
environments in the country that is highly sought after by leading
growth industries and tenants. The location is truly exceptional with
its adjacency to transportation and abundant retail amenities – key
factors that contribute to the long-term strength of this asset. Vulcan
developed an extremely high caliber building reflecting the most state
of the art features among the few new, life science buildings in the
region,” said Mike Shields, senior vice president of KRC’s Pacific
Northwest region.
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 serve a roster of dynamic, innovation-driven tenants,
including technology, entertainment, digital media and health care
companies. At December 31, 2013, the company’s stabilized portfolio
totaled 12.7 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. 40% of the company’s properties
were LEED certified and 53% were Energy Star certified. In addition, KRC
had approximately 2.5 million square feet of new office development
under construction with a total estimated investment of approximately
$1.5 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, 2013
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.
Contacts:
Kilroy Realty Corporation
Tyler H. Rose
Executive Vice
President
and Chief Financial Officer
(310) 481-8484
or
Michelle
Ngo
Senior Vice President
and Treasurer
(310) 481-8581
Source: Kilroy Realty Corporation
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