x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Kilroy Realty Corporation
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Maryland
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95-4598246
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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Kilroy Realty, L.P.
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Delaware
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95-4612685
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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12200 W. Olympic Boulevard, Suite 200, Los Angeles, California 90064
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(Address of principal executive offices) (Zip Code)
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Registrant’s telephone number, including area code: (310) 481-8400
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Securities registered pursuant to Section 12(b) of the Act:
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Registrant
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Title of each class
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Name of each exchange on which registered
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Kilroy Realty Corporation
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Common Stock, $.01 par value
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New York Stock Exchange
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Kilroy Realty Corporation
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6.875% Series G Cumulative Redeemable
Preferred Stock, $.01 par value
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New York Stock Exchange
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Kilroy Realty Corporation
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6.375% Series H Cumulative Redeemable
Preferred Stock, $.01 par value
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New York Stock Exchange
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Registrant
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Title of each class
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Kilroy Realty, L.P.
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Common Units Representing Limited Partnership Interests
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Kilroy Realty Corporation
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x
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Large accelerated filer
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o
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Accelerated filer
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o
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Non-accelerated filer
(Do not check if a smaller reporting company
)
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o
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Smaller reporting company
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Kilroy Realty, L.P.
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o
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Large accelerated filer
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o
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Accelerated filer
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x
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Non-accelerated filer
(Do not check if a smaller reporting company)
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o
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Smaller reporting company
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•
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Combined reports better reflect how management and the analyst community view the business as a single operating unit;
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Combined reports enhance investors’ understanding of the Company and the Operating Partnership by enabling them to view the business as a whole and in the same manner as management;
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Combined reports are more efficient for the Company and the Operating Partnership and result in savings in time, effort and expense; and
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Combined reports are more efficient for investors by reducing duplicative disclosure and providing a single document for their review.
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Item 6. Selected Financial Data – Kilroy Realty Corporation;
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Item 6. Selected Financial Data – Kilroy Realty, L.P.;
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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations:
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◦
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—Liquidity and Capital Resources of the Company; and
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◦
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—Liquidity and Capital Resources of the Operating Partnership;
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consolidated financial statements;
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the following notes to the consolidated financial statements:
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◦
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Note 8, Secured and Unsecured Debt of the Company;
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Note 9, Secured and Unsecured Debt of the Operating Partnership;
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Note 11, Noncontrolling Interests on the Company’s Consolidated Financial Statements;
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Note 12, Noncontrolling Interests on the Operating Partnership’s Consolidated Financial Statements;
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◦
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Note 13, Stockholders’ Equity of the Company;
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Note 14, Partners' Capital of the Operating Partnership;
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◦
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Note 22, Net Income Available to Common Stockholders Per Share of the Company;
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◦
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Note 23, Net Income Available to Common Unitholders Per Unit of the Operating Partnership;
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◦
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Note 24, Supplemental Cash Flow Information of the Company;
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Note 25, Supplemental Cash Flow Information of the Operating Partnership;
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◦
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Note 27, Quarterly Financial Information of the Company (Unaudited); and
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◦
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Note 28, Quarterly Financial Information of the Operating Partnership (Unaudited).
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Page
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PART I
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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PART II
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Item 5.
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43
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44
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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PART III
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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PART IV
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Item 15.
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ITEM 1.
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BUSINESS
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Number of
Buildings
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Rentable
Square Feet
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Number of
Tenants
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Percentage
Occupied
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Percentage Leased
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|||||
Stabilized Office Properties
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108
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14,025,856
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549
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96.0
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%
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97.0
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%
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Number of
Buildings |
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Number of Units
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Percentage
Occupied
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Percentage Leased
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Stabilized Residential Property
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1
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200
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46.0
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%
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56.5
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%
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Number of
Properties/Projects
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Estimated Office Rentable
Square Feet
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Properties held for sale
(1)
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1
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67,995
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Development project in “lease-up”
(2)
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1
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377,000
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Development projects under construction
(2)(3)
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3
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1,100,000
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(1)
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See Note 4 “Dispositions and Real Estate Assets Held for Sale” to our consolidated financial statements included in this report for additional information.
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(2)
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Estimated rentable square feet upon completion. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations —Factors That May Influence Future Results of Operations —Completed, In-Process and Future Development Pipeline” for more information.
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(3)
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Development projects under construction also include
96,000
square feet of retail space and
237
residential units in addition to the estimated office rentable square feet noted above.
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•
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Corporate Governance Guidelines;
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•
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Code of Business Conduct and Ethics;
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Audit Committee Charter;
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Executive Compensation Committee Charter; and
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Nominating / Corporate Governance Committee Charter.
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•
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the quality, geographic location, physical characteristics and operating sustainability of our properties;
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our ability to efficiently manage our assets as a low cost provider of commercial real estate through our seasoned management team possessing core capabilities in all aspects of real estate ownership, including property management, leasing, marketing, financing, accounting, legal, and construction and development management;
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our access to development, redevelopment, acquisition and leasing opportunities as a result of our extensive experience and significant working relationships with major West Coast property owners, corporate tenants, municipalities and landowners given our approximately 70-year presence in the West Coast markets;
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our active development program and our extensive future development pipeline of undeveloped land sites (see “Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations —Factors That May Influence Future Results of Operations” for additional information pertaining to the Company’s in-process, near-term and future development pipeline);
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our capital recycling program (see “Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations —Liquidity and Capital Resources of the Operating Partnership” for additional information pertaining to the Company’s capital recycling program and related property and land dispositions);
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our ability to capitalize on inflection points in a real estate cycle to add quality assets to our portfolio at substantial discounts to long-term value, through either acquisition, development or redevelopment; and
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our strong financial position that has and will continue to allow us to pursue attractive acquisition and development and redevelopment opportunities.
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maximizing cash flow from our properties through active leasing, early renewals and effective property management;
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structuring leases to maximize returns;
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managing portfolio credit risk through effective underwriting, including the use of credit enhancements and interests in collateral to mitigate portfolio credit risk;
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managing operating expenses through the efficient use of internal property management, leasing, marketing, financing, accounting, legal, and construction and development management functions;
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maintaining and developing long-term relationships with a diverse tenant base;
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continuing to effectively manage capital improvements to enhance our properties’ competitive advantages in their respective markets and improve the efficiency of building systems;
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continuing to expand our management team with individuals who have extensive regional and product-type experience and are highly knowledgeable in their respective markets and product types; and
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attracting and retaining motivated employees by providing financial and other incentives to meet our operating and financial goals.
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maintain a disciplined approach by commencing development when appropriate based on market conditions, favoring pre-leasing, developing in stages or phasing, and cost control;
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be the premier provider of modern and collaborative office and mixed-use projects on the West Coast with focus on design and environment;
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reinvest capital from dispositions of selective assets into new state-of-the-market development and acquisition opportunities with higher cash flow and rates of return;
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execute on our development projects under construction and our near-term and future development pipeline, including expanding entitlements; and
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evaluate redevelopment opportunities in supply-constrained markets because such efforts generally achieve similar returns to new development with reduced entitlement risk and shorter construction periods.
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provide attractive yields and significant potential for growth in cash flow from property operations;
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present growth opportunities in our existing or other strategic markets; and
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demonstrate the potential for improved performance through intensive management, repositioning and leasing that should result in increased occupancy and rental revenues.
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maintaining financial flexibility, including a low secured to unsecured debt ratio;
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maximizing our ability to access a variety of both public and private capital sources;
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maintaining a staggered debt maturity schedule in which the maturity dates of our debt are spread over several years to limit risk exposure at any particular point in the capital and credit market cycles;
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completing financing in advance of the need for capital;
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managing interest rate exposure by generally maintaining a greater amount of fixed-rate debt as compared to variable-rate debt; and
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maintaining our credit ratings.
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managing our properties to offer the maximum degree of utility and operational efficiency to tenants. We offer tenant sustainability programs focused on helping our tenants reduce their energy and water consumption and increase their recycling diversion rates. Many of our assets are in zones impacted by California’s drought, and as such face the risk of increased water costs and fines for high consumption. We have mitigated these risks through comprehensive, proactive water reductions throughout our portfolio, including domestic fixture upgrades, cooling tower optimizations, a comprehensive leak detection program, and irrigation systems retrofits. We also incorporate green lease language into 100% of our new leases, including a cost recovery clause for resource-efficiency related capital in full-service gross leases, which align tenant and landlord interests on energy, water and waste efficiency. Green leases (also known as aligned leases, high performance leases or energy efficient leases) align the financial and energy incentives of building owners and tenants so they can work together to save money, conserve resources and ensure the efficient operation of buildings. We were honored in 2014 to be part of the inaugural class of Green Lease Leaders, the Institute for Market Transformation's (“IMT's”) program to encourage green leasing in real estate. In 2016, IMT honored us again
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Year
(1)
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Energy Consumption Data Coverage as % of Floor Area
(2)
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Total Energy Consumed by Portfolio Area with Data Coverage (MWh)
(3)
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% of Energy Generated From Renewable Resources
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Like-for-Like Change in Energy Consumption of Portfolio Area with Data Coverage
(4)
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% of Eligible Portfolio that has Obtained an Energy Rating and is Certified to ENERGY STAR
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2015
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92
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%
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273,381
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3
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%
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(5
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)%
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65
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%
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2014
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88
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%
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267,391
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5
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%
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(2
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)%
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56
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%
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2013
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84
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%
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261,191
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3
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%
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(2
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)%
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53
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%
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Year
(1)
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Water Withdrawal Data Coverage as a % of Total Floor Area
(5)
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Total Water Withdrawn by Portfolio Area (kgal)
(6)
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Like-for-like Change in Water Withdrawn for Portfolio Area with Data Coverage
(4)
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2015
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94
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%
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832,737
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(11
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)%
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2014
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92
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%
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950,357
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(2
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)%
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2013
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89
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%
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900,809
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1
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%
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(1)
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Full 2016 calendar year energy and water data is not available until March 30, 2017. 2015 is the most recent year for which full energy and water data is available and verified by a third party.
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(2)
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Floor area is considered to have complete energy consumption data coverage when energy consumption data (i.e., energy types and amounts consumed) is obtained by the Company for all types of energy consumed in the relevant floor area during the fiscal year, regardless of when such data was obtained.
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(3)
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The scope of energy includes energy purchased from sources external to the Company and its tenants or produced by the Company or its tenants themselves (self-generated) and energy from all sources, including direct fuel usage, purchased electricity, and heating, cooling and steam energy.
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(4)
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Data reported in MWh on a like-for-like comparison excludes assets which have been acquired, disposed, under development or have been largely refurbished over the past twenty-four months.
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(5)
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Floor area is considered to have complete water withdrawal data coverage when water withdrawal data (i.e., amounts withdrawn) is obtained by the registrant in the relevant floor area during the fiscal year, regardless of when such data was obtained.
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(6)
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Water sources include surface water (including water from wetlands, rivers, lakes and oceans), groundwater, rainwater collected directly and stored by the registrant, wastewater obtained from other entities, municipal water supplies or supply from other water utilities.
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building our current development projects to Leadership in Energy and Environmental Design (“LEED”) specifications. All of our office development projects are now designed to achieve LEED certification, either LEED Platinum or Gold;
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•
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actively pursuing LEED certification for approximately
1.1 million
square feet of office space under construction. In addition, an analysis of energy performance is included in our standard due diligence process for acquisitions, and reducing energy use year over year is a comprehensive goal of our operational strategy. This is accomplished through systematic energy auditing, mechanical, lighting and other building upgrades, optimizing operations and engaging tenants. During the past few years we have significantly enhanced the sustainability profile of our portfolio, ending
2016
with 51% of our properties LEED certified and 69% of eligible properties ENERGY STAR certified. During
2016
, the Company was recognized for our sustainability efforts with multiple industry leadership awards, including NAREIT’s 2016 Office Leader in the Light Award and ENERGY STAR Partner of the Year Sustained Excellence award. The Company was also recognized by the Global Real Estate Sustainability Benchmark as the North American leader in sustainability for the third year in a row, and was ranked first among 178 North American participants across all asset types;
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local oversupply or reduction in demand for office, mixed-use or other commercial space, which may result in decreasing rental rates and greater concessions to tenants;
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inability to collect rent from tenants;
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vacancies or inability to rent space on favorable terms or at all;
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inability to finance property development and acquisitions on favorable terms or at all;
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increased operating costs, including insurance premiums, utilities and real estate taxes;
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costs of complying with changes in governmental regulations;
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the relative illiquidity of real estate investments;
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declines in real estate asset valuations, which may limit our ability to dispose of assets at attractive prices or obtain or maintain debt financing;
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changing submarket demographics;
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changes in space utilization by our tenants due to technology, economic conditions and business culture;
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the development of harmful mold or other airborne toxins or contaminants that could damage our properties or expose us to third-party liabilities; and
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property damage resulting from seismic activity or other natural disasters.
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95% of the Operating Partnership’s consolidated funds from operations (as defined in the agreements governing the unsecured revolving credit facility, unsecured term loan facility and unsecured term loan) for such year; and
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•
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an amount which results in distributions to us (excluding any preferred partnership distributions to the extent the same have been deducted from consolidated funds from operations (as so defined) for such year) in an amount sufficient to permit us to pay dividends to our stockholders that we reasonably believe are necessary to (a) maintain our qualification as a REIT for federal and state income tax purposes and (b) avoid the payment of federal or state income or excise tax.
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we may potentially be unable to acquire a desired property because of competition from other real estate investors with significant capital, including both publicly traded and private REITs, institutional investment funds and other real estate investors;
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even if we are able to acquire a desired property, competition from other real estate investors may significantly increase the purchase price;
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even if we enter into agreements for the acquisition of a desired property, we may be unable to complete such acquisitions because they remain subject to customary conditions to closing, including the completion of due diligence investigations to management’s satisfaction;
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we may be unable to finance acquisitions on favorable terms or at all;
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we may spend more than budgeted amounts in operating costs or to make necessary improvements or renovations to acquired properties;
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we may lease acquired properties at economic lease terms different than projected;
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we may acquire properties that are subject to liabilities for which we may have limited or no recourse; and
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we may be unable to complete an acquisition after making a nonrefundable deposit and incurring certain other acquisition-related costs.
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we may be unable to lease acquired, developed or redeveloped properties on lease terms projected at the time of acquisition, development or redevelopment or within budgeted timeframes;
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the operating expenses at acquired, developed or redeveloped properties may be greater than projected at the time of acquisition, development or redevelopment, resulting in our investment being less profitable than we expected;
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we may not commence or complete development or redevelopment properties on schedule or within budgeted amounts or at all;
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we may not be able to develop or redevelop the estimated square footage and other features of our development and redevelopment properties;
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we may suspend development or redevelopment projects after construction has begun due to changes in economic conditions or other factors, and this may result in the write-off of costs, payment of additional costs or increases in overall costs when the development or redevelopment project is restarted;
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we may expend funds on and devote management’s time to acquisition, development or redevelopment properties that we may not complete and as a result we may lose deposits or fail to recover expenses already incurred;
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we may encounter delays or refusals in obtaining all necessary zoning, land use, and other required entitlements, and building, occupancy, and other required governmental permits and authorizations;
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we may encounter delays, refusals, unforeseen cost increases and other impairments resulting from third-party litigation; and
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we may fail to obtain the financial results expected from properties we acquire, develop or redevelop.
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we would not be able to exercise sole decision-making authority regarding the property, partnership, joint venture or other entity, which would allow for impasses on decisions that could restrict our ability to sell or transfer our interests in such entity or such entity’s ability to transfer or sell its assets;
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partners or co-venturers might become bankrupt or fail to fund their share of required capital contributions, which could delay construction or development of a property or increase our financial commitment to the partnership or joint venture;
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partners or co-venturers may pursue economic or other business interests, policies or objectives that are competitive or inconsistent with ours;
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•
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if we become a limited partner or non-managing member in any partnership or limited liability company, and such entity takes or expects to take actions that could jeopardize our status as a REIT or require us to pay tax, we may be forced to dispose of our interest in such entity;
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•
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disputes between us and partners or co-venturers may result in litigation or arbitration that would increase our expenses and prevent our officers and/or directors from focusing their time and effort on our business; and
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we may, in certain circumstances, be liable for the actions of our third-party partners or co-venturers.
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borrowers may fail to make debt service payments or pay the principal when due;
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the value of the mortgaged property may be less than the principal amount of the mortgage note securing the property; and
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interest rates payable on the mortgages may be lower than our cost for the funds used to acquire these mortgages.
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direct obligations issued by the U.S. Treasury;
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obligations issued or guaranteed by the U.S. government or its agencies;
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taxable municipal securities;
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obligations (including certificates of deposits) of banks and thrifts;
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commercial paper and other instruments consisting of short-term U.S. dollar denominated obligations issued by corporations and banks;
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repurchase agreements collateralized by corporate and asset-backed obligations;
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both registered and unregistered money market funds; and
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other highly rated short-term securities.
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•
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result in unauthorized access to, destruction, loss, theft, misappropriation or release of proprietary, confidential, sensitive or otherwise valuable information of ours or others, including personally identifiable and account information that could be used to compete against us or for disruptive, destructive or otherwise harmful purposes and outcomes;
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•
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result in unauthorized access to or changes to our financial accounting and reporting systems and related data;
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•
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result in our inability to maintain building systems relied on by our tenants;
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•
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require significant management attention and resources to remedy any damage that result;
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•
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subject us to regulatory penalties or claims for breach of contract, damages, credits, penalties or terminations of leases or other agreements; or
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damage our reputation among our tenants and investors.
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•
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actual or anticipated variations in our operating results, funds from operations, cash flows, liquidity or distributions;
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•
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our ability to successfully execute on our development program;
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•
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our ability to successfully complete acquisitions and operate acquired properties;
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•
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earthquakes;
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•
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changes in our earnings estimates or those of analysts;
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•
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publication of research reports about us, the real estate industry generally or the office and residential sectors in which we operate;
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•
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the failure to maintain our current credit ratings or comply with our debt covenants;
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•
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increases in market interest rates that lead purchasers of our common stock to demand a higher dividend yield;
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•
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changes in market valuations of similar companies;
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•
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adverse market reaction to any debt or equity securities we may issue or additional debt we incur in the future;
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•
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additions or departures of key management personnel;
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•
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actions by institutional stockholders;
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•
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speculation in the press or investment community;
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•
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high levels of volatility in the credit markets;
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•
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general market and economic conditions; and
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•
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the realization of any of the other risk factors included in this report.
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•
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the Company’s charter authorizes the board of directors to issue up to 30,000,000 shares of the Company’s preferred stock, including convertible preferred stock, without stockholder approval. The board of directors may establish the preferences, rights and other terms, including the right to vote and the right to convert into common stock any shares issued. The issuance of preferred stock could delay or prevent a tender offer or a change of control even if a tender offer or a change of control was in our security holders’ interest. As of
December 31, 2016
, 8,000,000 shares of the Company’s preferred stock were issued and outstanding, consisting of 4,000,000 shares of the Company’s Series G Preferred Stock and 4,000,000 shares of the Company’s Series H Preferred Stock; and
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•
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the Company’s charter states that any director, or the entire board of directors, may be removed from office at any time, but only for cause and then only by the affirmative vote of the holders of at least two thirds of the votes of the Company’s capital stock entitled to be cast in the election of directors.
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•
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the Company would not be allowed a deduction for dividends paid to its stockholders in computing the Company’s taxable income and would be subject to federal income tax at regular corporate rates;
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•
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the Company could be subject to the federal alternative minimum tax and possibly increased state and local taxes; and
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•
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unless entitled to relief under statutory provisions, the Company could not elect to be taxed as a REIT for four taxable years following the year during which the Company was disqualified.
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ITEM 1B.
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UNRESOLVED STAFF COMMENTS
|
|
Number of
Buildings
|
|
Rentable
Square Feet
|
|
Number of
Tenants
|
|
Percentage
Occupied
|
|
Percentage Leased
|
|||||
Stabilized Office Properties
|
108
|
|
|
14,025,856
|
|
|
549
|
|
|
96.0
|
%
|
|
97.0
|
%
|
|
Number of
Buildings |
|
Number of Units
|
|
Percentage
Occupied
|
|
Percentage Leased
|
||||
Stabilized Residential Property
|
1
|
|
|
200
|
|
|
46.0
|
%
|
|
56.5
|
%
|
|
Number of
Properties/Projects
|
|
Estimated Office Rentable
Square Feet
|
|
Properties held for sale
(1)
|
1
|
|
67,995
|
|
Development project in “lease-up”
(2)
|
1
|
|
377,000
|
|
Development projects under construction
(2)(3)
|
3
|
|
1,100,000
|
|
(1)
|
See Note 4 “Dispositions and Real Estate Assets Held for Sale” to our consolidated financial statements included in this report for additional information.
|
(2)
|
Estimated rentable square feet upon completion. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations —Factors That May Influence Future Results of Operations —Completed, In-Process and Future Development Pipeline” for more information.
|
(3)
|
Development projects under construction also include
96,000
square feet of retail space and
237
residential units in addition to the estimated office rentable square feet noted above.
|
Property Location
|
|
No. of
Buildings
|
|
Year Built/
Renovated
|
|
Rentable
Square Feet
|
|
Percentage
Occupied at
12/31/2016
(1)
|
|
Annualized
Base Rent
(in $000’s)
(2)
|
|
Annualized Rent Per Square Foot
(2)
|
||||||
Los Angeles and Ventura Counties
|
|
|
|
|
|
|
||||||||||||
23925 Park Sorrento,
Calabasas, California |
(3)
|
1
|
|
2001
|
|
11,789
|
|
|
100.0
|
%
|
|
$
|
421
|
|
|
$
|
35.72
|
|
23975 Park Sorrento,
Calabasas, California |
(3)
|
1
|
|
2002
|
|
104,797
|
|
|
100.0
|
%
|
|
3,675
|
|
|
35.99
|
|
||
24025 Park Sorrento,
Calabasas, California |
(3)
|
1
|
|
2000
|
|
108,670
|
|
|
97.4
|
%
|
|
3,818
|
|
|
36.08
|
|
||
2829 Townsgate Road,
Thousand Oaks, California |
(3)
|
1
|
|
1990
|
|
84,098
|
|
|
100.0
|
%
|
|
2,351
|
|
|
27.95
|
|
||
2240 E. Imperial Highway,
El Segundo, California |
(4)
|
1
|
|
1983/ 2008
|
|
122,870
|
|
|
100.0
|
%
|
|
3,950
|
|
|
32.15
|
|
||
2250 E. Imperial Highway,
El Segundo, California |
(7)
|
1
|
|
1983
|
|
298,728
|
|
|
100.0
|
%
|
|
9,523
|
|
|
32.01
|
|
||
2260 E. Imperial Highway,
El Segundo, California |
(4)
|
1
|
|
1983/ 2012
|
|
298,728
|
|
|
100.0
|
%
|
|
10,510
|
|
|
35.18
|
|
||
909 Sepulveda Blvd.,
El Segundo, California |
(3)
|
1
|
|
1972/ 2005
|
|
244,136
|
|
|
93.8
|
%
|
|
6,325
|
|
|
29.10
|
|
||
999 Sepulveda Blvd.,
El Segundo, California |
(3)
|
1
|
|
1962/ 2003
|
|
128,588
|
|
|
95.4
|
%
|
|
3,133
|
|
|
26.58
|
|
||
6115 W. Sunset Blvd.,
Los Angeles, California |
(5)
|
1
|
|
1938/ 2015
|
|
26,105
|
|
|
98.4
|
%
|
|
1,566
|
|
|
60.97
|
|
||
6121 W. Sunset Blvd.,
Los Angeles, California |
(5)
|
1
|
|
1938/ 2015
|
|
91,173
|
|
|
100.0
|
%
|
|
4,133
|
|
|
45.33
|
|
||
6255 Sunset Blvd,
Los Angeles, California |
(8)
|
1
|
|
1971/ 1999
|
|
323,922
|
|
|
99.6
|
%
|
|
12,466
|
|
|
39.99
|
|
||
3750 Kilroy Airport Way,
Long Beach, California |
(3)
|
1
|
|
1989
|
|
10,457
|
|
|
86.1
|
%
|
|
109
|
|
|
19.95
|
|
Property Location
|
|
No. of
Buildings
|
|
Year Built/
Renovated
|
|
Rentable
Square Feet
|
|
Percentage
Occupied at
12/31/2016
(1)
|
|
Annualized
Base Rent
(in $000’s)
(2)
|
|
Annualized Rent Per Square Foot
(2)
|
||||||
3760 Kilroy Airport Way,
Long Beach, California |
(3)
|
1
|
|
1989
|
|
165,278
|
|
|
100.0
|
%
|
|
5,142
|
|
|
31.11
|
|
||
3780 Kilroy Airport Way,
Long Beach, California |
(3)
|
1
|
|
1989
|
|
219,745
|
|
|
82.0
|
%
|
|
5,068
|
|
|
28.79
|
|
||
3800 Kilroy Airport Way,
Long Beach, California |
(3)
|
1
|
|
2000
|
|
192,476
|
|
|
85.8
|
%
|
|
5,234
|
|
|
31.70
|
|
||
3840 Kilroy Airport Way,
Long Beach, California |
(3)
|
1
|
|
1999
|
|
136,026
|
|
|
100.0
|
%
|
|
4,915
|
|
|
36.13
|
|
||
3880 Kilroy Airport Way,
Long Beach, California |
(9)
|
1
|
|
1987/ 2013
|
|
96,035
|
|
|
100.0
|
%
|
|
2,839
|
|
|
29.56
|
|
||
3900 Kilroy Airport Way,
Long Beach, California |
(3)
|
1
|
|
1987
|
|
129,893
|
|
|
96.1
|
%
|
|
2,996
|
|
|
24.05
|
|
||
8560 West Sunset Blvd, West Hollywood, California
|
(3)
|
1
|
|
1963/ 2007
|
|
71,875
|
|
|
83.9
|
%
|
|
4,222
|
|
|
70.01
|
|
||
8570 West Sunset Blvd, West Hollywood, California
|
(3)
|
1
|
|
2002/ 2007
|
|
43,603
|
|
|
78.8
|
%
|
|
1,835
|
|
|
53.42
|
|
||
8580 West Sunset Blvd, West Hollywood, California
|
(5)
|
1
|
|
2002/ 2007
|
|
7,126
|
|
|
100.0
|
%
|
|
—
|
|
|
—
|
|
||
8590 West Sunset Blvd, West Hollywood, California
|
(10)
|
1
|
|
2002/ 2007
|
|
56,095
|
|
|
97.3
|
%
|
|
1,901
|
|
|
34.83
|
|
||
12100 W. Olympic Blvd.,
Los Angeles, California |
(3)
|
1
|
|
2003
|
|
152,048
|
|
|
100.0
|
%
|
|
7,204
|
|
|
47.38
|
|
||
12200 W. Olympic Blvd.,
Los Angeles, California |
(3)
|
1
|
|
2000
|
|
150,832
|
|
|
94.6
|
%
|
|
4,290
|
|
|
39.67
|
|
||
12233 W. Olympic Blvd.,
Los Angeles, California |
(11)
|
1
|
|
1980/ 2011
|
|
151,029
|
|
|
88.2
|
%
|
|
3,757
|
|
|
50.51
|
|
||
12312 W. Olympic Blvd.,
Los Angeles, California |
(6)
|
1
|
|
1950/ 1997
|
|
76,644
|
|
|
100.0
|
%
|
|
4,096
|
|
|
53.44
|
|
||
1633 26th Street,
Santa Monica, California |
(4)
|
1
|
|
1972/ 1997
|
|
44,915
|
|
|
100.0
|
%
|
|
1,270
|
|
|
28.28
|
|
||
2100/2110 Colorado Avenue,
Santa Monica, California |
(3)
|
3
|
|
1992/ 2009
|
|
102,864
|
|
|
100.0
|
%
|
|
4,357
|
|
|
42.36
|
|
||
3130 Wilshire Blvd.,
Santa Monica, California |
(3)
|
1
|
|
1969/ 1998
|
|
88,340
|
|
|
68.7
|
%
|
|
2,146
|
|
|
35.34
|
|
||
501 Santa Monica Blvd.,
Santa Monica, California |
(3)
|
1
|
|
1974
|
|
73,212
|
|
|
77.2
|
%
|
|
2,802
|
|
|
59.57
|
|
||
Subtotal/Weighted Average –
Los Angeles and Ventura Counties |
|
33
|
|
|
|
3,812,097
|
|
|
95.0
|
%
|
|
$
|
126,054
|
|
|
$
|
36.24
|
|
Orange County
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
2211 Michelson,
Irvine, California
|
(3)
|
1
|
|
2007
|
|
271,556
|
|
|
97.8
|
%
|
|
$
|
9,982
|
|
|
$
|
38.07
|
|
Subtotal/Weighted Average –
Orange County
|
|
1
|
|
|
|
271,556
|
|
|
97.8
|
%
|
|
$
|
9,982
|
|
|
$
|
38.07
|
|
San Diego County
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
12225 El Camino Real,
Del Mar, California
|
(4)
|
1
|
|
1998
|
|
58,401
|
|
|
100.0
|
%
|
|
$
|
1,965
|
|
|
$
|
33.64
|
|
12235 El Camino Real,
Del Mar, California
|
(4)
|
1
|
|
1998
|
|
53,751
|
|
|
100.0
|
%
|
|
2,470
|
|
|
45.96
|
|
||
12340 El Camino Real,
Del Mar, California
|
(12)
|
1
|
|
2002
|
|
87,774
|
|
|
100.0
|
%
|
|
3,501
|
|
|
43.62
|
|
||
12390 El Camino Real,
Del Mar, California
|
(4)
|
1
|
|
2000
|
|
72,332
|
|
|
100.0
|
%
|
|
3,069
|
|
|
42.44
|
|
||
12770 El Camino Real,
Del Mar, California
|
(13)
|
1
|
|
2016
|
|
73,032
|
|
|
—
|
%
|
|
—
|
|
|
—
|
|
||
12348 High Bluff Drive,
Del Mar, California
|
(3)
|
1
|
|
1999
|
|
38,806
|
|
|
100.0
|
%
|
|
916
|
|
|
31.37
|
|
||
12400 High Bluff Drive,
Del Mar, California
|
(4)
|
1
|
|
2004
|
|
209,220
|
|
|
100.0
|
%
|
|
10,671
|
|
|
51.00
|
|
||
3579 Valley Centre Drive,
Del Mar, California
|
(4)
|
1
|
|
1999
|
|
52,418
|
|
|
100.0
|
%
|
|
2,040
|
|
|
38.91
|
|
||
3611 Valley Centre Drive,
Del Mar, California
|
(4)
|
1
|
|
2000
|
|
130,047
|
|
|
100.0
|
%
|
|
5,451
|
|
|
41.92
|
|
Property Location
|
|
No. of
Buildings
|
|
Year Built/
Renovated
|
|
Rentable
Square Feet
|
|
Percentage
Occupied at
12/31/2016
(1)
|
|
Annualized
Base Rent
(in $000’s)
(2)
|
|
Annualized Rent Per Square Foot
(2)
|
||||||
3661 Valley Centre Drive,
Del Mar, California
|
(14)
|
1
|
|
2001
|
|
128,330
|
|
|
92.5
|
%
|
|
3,561
|
|
|
36.12
|
|
||
3721 Valley Centre Drive,
Del Mar, California
|
(15)
|
1
|
|
2003
|
|
115,193
|
|
|
100.0
|
%
|
|
5,309
|
|
|
46.09
|
|
||
3811 Valley Centre Drive,
Del Mar, California
|
(6)
|
1
|
|
2000
|
|
112,067
|
|
|
100.0
|
%
|
|
5,199
|
|
|
46.39
|
|
||
12780 El Camino Real,
Del Mar, California |
(6)
|
1
|
|
2013
|
|
140,591
|
|
|
100.0
|
%
|
|
6,366
|
|
|
45.28
|
|
||
12790 El Camino Real,
Del Mar, California |
(4)
|
1
|
|
2013
|
|
78,836
|
|
|
100.0
|
%
|
|
3,275
|
|
|
41.55
|
|
||
13280 Evening Creek Drive South,
I-15 Corridor, California |
(3)
|
1
|
|
2008
|
|
41,196
|
|
|
100.0
|
%
|
|
1,078
|
|
|
26.17
|
|
||
13290 Evening Creek Drive South,
I-15 Corridor, California |
(4)
|
1
|
|
2008
|
|
61,180
|
|
|
100.0
|
%
|
|
1,453
|
|
|
23.75
|
|
||
13480 Evening Creek Drive North,
I-15 Corridor, California |
(4)
|
1
|
|
2008
|
|
149,817
|
|
|
100.0
|
%
|
|
7,779
|
|
|
51.92
|
|
||
13500 Evening Creek Drive North,
I-15 Corridor, California |
(4)
|
1
|
|
2004
|
|
147,533
|
|
|
100.0
|
%
|
|
6,286
|
|
|
42.61
|
|
||
13520 Evening Creek Drive North,
I-15 Corridor, California |
(16)
|
1
|
|
2004
|
|
141,128
|
|
|
96.4
|
%
|
|
4,914
|
|
|
36.93
|
|
||
2355 Northside Drive,
Mission Valley, California |
(3)
|
1
|
|
1990
|
|
53,610
|
|
|
67.0
|
%
|
|
941
|
|
|
27.36
|
|
||
2365 Northside Drive,
Mission Valley, California |
(3)
|
1
|
|
1990
|
|
96,437
|
|
|
83.0
|
%
|
|
2,552
|
|
|
31.88
|
|
||
2375 Northside Drive,
Mission Valley, California |
(17)
|
1
|
|
1990
|
|
51,516
|
|
|
89.4
|
%
|
|
1,380
|
|
|
29.98
|
|
||
2385 Northside Drive,
Mission Valley, California |
(3)
|
1
|
|
2008
|
|
89,023
|
|
|
95.7
|
%
|
|
2,682
|
|
|
31.49
|
|
||
2305 Historic Decatur Road,
Point Loma, California
|
(18)
|
1
|
|
2009
|
|
103,900
|
|
|
100.0
|
%
|
|
3,694
|
|
|
35.55
|
|
||
10390 Pacific Center Court,
Sorrento Mesa, California
|
(6)
|
1
|
|
2002
|
|
68,400
|
|
|
100.0
|
%
|
|
2,449
|
|
|
35.81
|
|
||
10394 Pacific Center Court,
Sorrento Mesa, California
|
(5)
|
1
|
|
1995
|
|
59,327
|
|
|
100.0
|
%
|
|
1,424
|
|
|
24.00
|
|
||
10398 Pacific Center Court,
Sorrento Mesa, California
|
(6)
|
1
|
|
1995
|
|
43,645
|
|
|
100.0
|
%
|
|
698
|
|
|
15.99
|
|
||
10421 Pacific Center Court,
Sorrento Mesa, California
|
(6)
|
1
|
|
1995/ 2002
|
|
75,899
|
|
|
100.0
|
%
|
|
1,186
|
|
|
15.62
|
|
||
10445 Pacific Center Court,
Sorrento Mesa, California
|
(6)
|
1
|
|
1995
|
|
48,709
|
|
|
100.0
|
%
|
|
936
|
|
|
19.22
|
|
||
10455 Pacific Center Court,
Sorrento Mesa, California
|
(5)
|
1
|
|
1995
|
|
88,577
|
|
|
45.8
|
%
|
|
1,020
|
|
|
25.13
|
|
||
4690 Executive Drive,
UTC, California
|
(3)
|
1
|
|
1999
|
|
47,846
|
|
|
89.3
|
%
|
|
1,334
|
|
|
31.21
|
|
||
Subtotal/Weighted Average –
San Diego County
|
|
31
|
|
|
|
2,718,541
|
|
|
93.2
|
%
|
|
$
|
95,599
|
|
|
$
|
38.35
|
|
San Francisco
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
4100 Bohannon Drive,
Menlo Park, California
|
(5)
|
1
|
|
1985
|
|
47,379
|
|
|
100.0
|
%
|
|
$
|
1,719
|
|
|
$
|
36.27
|
|
4200 Bohannon Drive,
Menlo Park, California
|
(5)
|
1
|
|
1987
|
|
45,451
|
|
|
100.0
|
%
|
|
1,834
|
|
|
40.34
|
|
||
4300 Bohannon Drive,
Menlo Park, California
|
(5)
|
1
|
|
1988
|
|
63,079
|
|
|
100.0
|
%
|
|
2,920
|
|
|
46.30
|
|
||
4400 Bohannon Drive,
Menlo Park, California
|
(5)
|
1
|
|
1988
|
|
48,146
|
|
|
100.0
|
%
|
|
1,593
|
|
|
35.27
|
|
||
4500 Bohannon Drive,
Menlo Park, California
|
(5)
|
1
|
|
1990
|
|
63,078
|
|
|
100.0
|
%
|
|
2,041
|
|
|
32.35
|
|
||
4600 Bohannon Drive,
Menlo Park, California
|
(19)
|
1
|
|
1990
|
|
48,147
|
|
|
100.0
|
%
|
|
2,681
|
|
|
55.69
|
|
||
4700 Bohannon Drive,
Menlo Park, California
|
(5)
|
1
|
|
1989
|
|
63,078
|
|
|
100.0
|
%
|
|
2,275
|
|
|
36.07
|
|
||
1290-1300 Terra Bella Avenue,
Mountain View, California
|
(5)
|
1
|
|
1961
|
|
114,175
|
|
|
100.0
|
%
|
|
3,841
|
|
|
33.64
|
|
Property Location
|
|
No. of
Buildings
|
|
Year Built/
Renovated
|
|
Rentable
Square Feet
|
|
Percentage
Occupied at
12/31/2016
(1)
|
|
Annualized
Base Rent
(in $000’s)
(2)
|
|
Annualized Rent Per Square Foot
(2)
|
||||||
331 Fairchild Drive,
Mountain View, California |
(6)
|
1
|
|
2013
|
|
87,147
|
|
|
100.0
|
%
|
|
4,186
|
|
|
48.03
|
|
||
680 E. Middlefield Road,
Mountain View, California
|
(6)
|
1
|
|
2014
|
|
170,090
|
|
|
100.0
|
%
|
|
7,729
|
|
|
45.44
|
|
||
690 E. Middlefield Road,
Mountain View, California
|
(6)
|
1
|
|
2014
|
|
170,823
|
|
|
100.0
|
%
|
|
7,763
|
|
|
45.44
|
|
||
1701 Page Mill Road,
Palo Alto, California
|
(5)
|
1
|
|
2015
|
|
128,688
|
|
|
100.0
|
%
|
|
8,461
|
|
|
65.75
|
|
||
3150 Porter Drive,
Palo Alto, California
|
(6)
|
1
|
|
1998
|
|
36,897
|
|
|
100.0
|
%
|
|
2,051
|
|
|
55.59
|
|
||
900 Jefferson Avenue,
Redwood City, California |
(5)
|
1
|
|
2015
|
|
228,505
|
|
|
100.0
|
%
|
|
13,670
|
|
|
59.82
|
|
||
900 Middlefield Road,
Redwood City, California |
(5)
|
1
|
|
2015
|
|
118,764
|
|
|
97.3
|
%
|
|
6,835
|
|
|
59.38
|
|
||
303 Second Street,
San Francisco, California
|
(20)
|
1
|
|
1988
|
|
740,047
|
|
|
95.2
|
%
|
|
36,952
|
|
|
52.67
|
|
||
100 First Street,
San Francisco, California
|
(21)
|
1
|
|
1988
|
|
467,095
|
|
|
91.3
|
%
|
|
21,648
|
|
|
53.21
|
|
||
250 Brannan Street,
San Francisco, California
|
(4)
|
1
|
|
1907/ 2001
|
|
95,008
|
|
|
100.0
|
%
|
|
5,413
|
|
|
56.98
|
|
||
201 Third Street,
San Francisco, California
|
(22)
|
1
|
|
1983
|
|
346,538
|
|
|
90.4
|
%
|
|
17,202
|
|
|
55.81
|
|
||
301 Brannan Street,
San Francisco, California
|
(4)
|
1
|
|
1909/ 1989
|
|
74,430
|
|
|
100.0
|
%
|
|
4,092
|
|
|
54.98
|
|
||
360 Third Street,
San Francisco, California
|
(23)
|
1
|
|
2013
|
|
429,796
|
|
|
100.0
|
%
|
|
21,594
|
|
|
50.35
|
|
||
333 Brannan Street,
San Francisco, California
|
(4)
|
1
|
|
2016
|
|
185,602
|
|
|
98.1
|
%
|
|
14,827
|
|
|
81.44
|
|
||
350 Mission Street,
San Francisco, California
|
(5)
|
1
|
|
2016
|
|
455,340
|
|
|
98.0
|
%
|
|
23,450
|
|
|
52.78
|
|
||
1310 Chesapeake Terrace,
Sunnyvale, California
|
(5)
|
1
|
|
1989
|
|
76,244
|
|
|
100.0
|
%
|
|
2,369
|
|
|
31.08
|
|
||
1315 Chesapeake Terrace,
Sunnyvale, California
|
(5)
|
1
|
|
1989
|
|
55,635
|
|
|
100.0
|
%
|
|
1,424
|
|
|
25.60
|
|
||
1320-1324 Chesapeake Terrace,
Sunnyvale, California
|
(5)
|
1
|
|
1989
|
|
79,720
|
|
|
100.0
|
%
|
|
2,421
|
|
|
30.36
|
|
||
1325-1327 Chesapeake Terrace,
Sunnyvale, California
|
(5)
|
1
|
|
1989
|
|
55,383
|
|
|
100.0
|
%
|
|
1,234
|
|
|
22.29
|
|
||
505 N. Mathilda Avenue,
Sunnyvale, California
|
(5)
|
1
|
|
2014
|
|
212,322
|
|
|
100.0
|
%
|
|
9,449
|
|
|
44.50
|
|
||
555 N. Mathilda Avenue,
Sunnyvale, California
|
(5)
|
1
|
|
2014
|
|
212,322
|
|
|
100.0
|
%
|
|
9,449
|
|
|
44.50
|
|
||
605 N. Mathilda Avenue,
Sunnyvale, California
|
(5)
|
1
|
|
2014
|
|
162,785
|
|
|
100.0
|
%
|
|
7,245
|
|
|
44.50
|
|
||
599 N. Mathilda Avenue,
Sunnyvale, California
|
(5)
|
1
|
|
2000
|
|
75,810
|
|
|
100.0
|
%
|
|
2,203
|
|
|
29.04
|
|
||
Subtotal/Weighted Average –
San Francisco
|
|
31
|
|
|
|
5,157,524
|
|
|
97.6
|
%
|
|
$
|
250,571
|
|
|
$
|
50.13
|
|
Greater Seattle
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
601 108th Avenue NE,
Bellevue, Washington
|
(24)
|
1
|
|
2000
|
|
488,470
|
|
|
99.6
|
%
|
|
$
|
17,222
|
|
|
$
|
35.77
|
|
10900 NE 4th Street,
Bellevue, Washington
|
(3)
|
1
|
|
1983
|
|
416,755
|
|
|
95.4
|
%
|
|
14,375
|
|
|
36.29
|
|
||
10210 NE Points Drive,
Kirkland, Washington
|
(5)
|
1
|
|
1988
|
|
84,641
|
|
|
100.0
|
%
|
|
2,146
|
|
|
25.36
|
|
||
10220 NE Points Drive,
Kirkland, Washington
|
(5)
|
1
|
|
1987
|
|
49,851
|
|
|
100.0
|
%
|
|
1,291
|
|
|
26.14
|
|
||
10230 NE Points Drive,
Kirkland, Washington
|
(5)
|
1
|
|
1990
|
|
98,982
|
|
|
100.0
|
%
|
|
2,783
|
|
|
28.54
|
|
||
3933 Lake Washington Blvd NE,
Kirkland, Washington
|
(5)
|
1
|
|
1993
|
|
46,450
|
|
|
81.7
|
%
|
|
1,043
|
|
|
27.48
|
|
||
837 N. 34th Street,
Lake Union, Washington
|
(5)
|
1
|
|
2008
|
|
111,580
|
|
|
76.2
|
%
|
|
2,748
|
|
|
32.34
|
|
Property Location
|
|
No. of
Buildings
|
|
Year Built/
Renovated
|
|
Rentable
Square Feet
|
|
Percentage
Occupied at
12/31/2016
(1)
|
|
Annualized
Base Rent
(in $000’s)
(2)
|
|
Annualized Rent Per Square Foot
(2)
|
||||||
701 N. 34th Street,
Lake Union, Washington
|
(5)
|
1
|
|
1998
|
|
138,994
|
|
|
98.7
|
%
|
|
4,654
|
|
|
33.92
|
|
||
801 N. 34th Street,
Lake Union, Washington
|
(6)
|
1
|
|
1998
|
|
169,412
|
|
|
100.0
|
%
|
|
4,423
|
|
|
26.11
|
|
||
320 Westlake Terry Avenue North,
Lake Union, Washington
|
(5)
|
1
|
|
2007
|
|
184,643
|
|
|
100.0
|
%
|
|
6,331
|
|
|
34.29
|
|
||
321 Terry Avenue North,
Lake Union, Washington
|
(5)
|
1
|
|
2013
|
|
135,755
|
|
|
100.0
|
%
|
|
4,465
|
|
|
32.89
|
|
||
401 Terry Avenue North,
Lake Union, Washington
|
(6)
|
1
|
|
2003
|
|
140,605
|
|
|
100.0
|
%
|
|
6,207
|
|
|
44.15
|
|
||
Subtotal/Weighted Average –
Greater Seattle
|
|
12
|
|
|
|
2,066,138
|
|
|
97.2
|
%
|
|
$
|
67,688
|
|
|
$
|
33.85
|
|
TOTAL/WEIGHTED AVERAGE
|
|
108
|
|
|
|
14,025,856
|
|
|
96.0
|
%
|
|
$
|
549,894
|
|
|
$
|
41.56
|
|
(1)
|
Based on all leases at the respective properties in effect as of
December 31, 2016
. Includes month-to-month leases as of
December 31, 2016
.
|
(2)
|
Annualized base rental revenue includes the impact of straight-lining rent escalations and the amortization of free rent periods and excludes the impact of the following: amortization of deferred revenue related tenant-funded tenant improvements, amortization of above/below market rents, amortization for lease incentives due under existing leases and expense reimbursement revenue. Excludes month-to-month leases and vacant space as of
December 31, 2016
.
|
(3)
|
For these properties, the leases are written on a full service gross basis.
|
(4)
|
For these properties, the leases are written on a modified gross basis.
|
(5)
|
For these properties, the leases are written on a triple net basis.
|
(6)
|
For these properties, the leases are written on a modified net basis.
|
(7)
|
For this property, leases of approximately 246,000 rentable square feet are written on a modified gross basis and approximately 53,000 rentable square feet are written on a full service gross basis.
|
(8)
|
For this property, leases of approximately 306,000 rentable square feet are written on a full service gross basis and approximately 16,000 rentable square feet are written on a triple net basis.
|
(9)
|
For this property, leases of approximately 46,000 rentable square feet are written on a modified net basis and approximately 50,000 rentable square feet are written on a full service gross basis.
|
(10)
|
For this property, leases of approximately 49,000 rentable square feet are written on a full service gross basis and approximately 5,000 rentable square feet are written on a triple net basis.
|
(11)
|
For this property, leases of approximately 15,000 rentable square feet are written on a full service gross basis, approximately 93,000 rentable square feet are written on a modified gross basis and approximately 25,000 rentable square feet are written on a gross basis.
|
(12)
|
For this property, leases of approximately 78,000 rentable square feet are written on a modified gross basis and approximately 10,000 rentable square feet are written on a full service gross basis.
|
(13)
|
These properties are vacant.
|
(14)
|
For this property, leases of approximately 33,000 rentable square feet are written on a full service gross basis, and approximately 85,000 rentable square feet are written on a modified gross basis.
|
(15)
|
For this property, leases of approximately 23,000 rentable square feet are written on a full service gross basis and approximately 92,000 rentable square feet are written on a modified gross basis.
|
(16)
|
For this property, leases of approximately 19,000 rentable square feet are written on a full service gross basis and approximately 117,000 rentable square feet are written on a modified gross basis.
|
(17)
|
For this property, leases of approximately 29,000 rentable square feet are written on a gross basis and approximately 17,000 rentable square feet are written on a full service gross basis.
|
(18)
|
For this property, leases of approximately 82,000 rentable square feet are written on a full service gross basis and approximately 22,000 rentable square feet are written on a gross basis.
|
(19)
|
For this property, leases of approximately 20,000 rentable square feet are written on a gross basis and approximately 29,000 rentable square feet are written on a triple net basis.
|
(20)
|
For this property, leases of approximately 458,000 rentable square feet are written on a full service gross basis, approximately 24,000 rentable square feet are written on a triple net basis, approximately 38,000 rentable square feet are written on a gross basis and approximately 185,000 rentable square feet are written on a modified gross basis.
|
(21)
|
For this property, leases of approximately 84,000 rentable square feet are written on a gross basis, approximately 334,000 rentable square feet are written on a full service gross basis and approximately 8,000 rentable square feet is written on a triple net basis.
|
(22)
|
For this property, leases of approximately 322,000 rentable square feet are written on a full service gross basis, approximately 12,000 rentable square feet are written on a triple net basis, and approximately 8,000 rentable square feet are written on a modified net basis.
|
(23)
|
For this property, leases of approximately 390,000 rentable square feet are written on a modified gross basis, approximately 37,000 rentable square feet are written on a full service gross basis, and approximately 3,000 rentable square feet are written on a triple net basis.
|
(24)
|
For this property, leases of approximately 480,000 rentable square feet are written on a triple net basis and approximately 6,000 rentable square feet are written on a modified gross basis.
|
|
|
Construction Period
|
|
|
|
|
|
|
||||
Stabilized Office Projects
|
|
Start Date
|
|
Completion Date
|
|
Stabilization Date
|
|
Rentable Square Feet
|
|
Office % Committed
(1)
|
||
350 Mission Street,
San Francisco, California
|
|
4Q 2012
|
|
3Q 2015
|
|
2Q 2016
|
|
455,340
|
|
|
100.0
|
%
|
333 Brannan Street,
San Francisco, California
|
|
4Q 2013
|
|
3Q 2015
|
|
2Q 2016
|
|
185,602
|
|
|
100.0
|
%
|
The Heights at Del Mar
Del Mar, California |
|
4Q 2014
|
|
4Q 2015
|
|
4Q 2016
|
|
73,000
|
|
|
65.0
|
%
|
TOTAL:
|
|
|
|
|
|
|
|
713,942
|
|
|
96.0
|
%
|
(1)
|
Committed space refers to executed leases or letters of intent. Commitments not supported by executed leases are not binding obligations and there can be no assurance that they will result in executed leases on the terms contemplated or at all.
|
|
|
Construction Period
|
|
|
|
|
||||
Stabilized Residential Project
|
|
Start Date
|
|
Completion Date
|
|
Number of Units
|
|
Percentage
Leased
|
||
Columbia Square Residential
|
|
3Q 2013
|
|
2Q 2016
|
|
200
|
|
|
56.5
|
%
|
|
|
Construction Period
|
|
|
|
|
||||||
Lease-up Projects
|
|
Start Date
|
|
Completion Date
|
|
Estimated Stabilization Date
|
|
Rentable Square Feet
|
|
Office % Committed
(1)
|
||
Columbia Square Phase 2 - Office
Hollywood, California
|
|
3Q 2013
|
|
1Q 2016
|
|
1Q 2017
|
|
377,000
|
|
|
86.0
|
%
|
(1)
|
Committed space refers to executed leases or letters of intent. Commitments not supported by executed leases are not binding obligations and there can be no assurance that they will result in executed leases on the terms contemplated or at all.
|
|
|
Estimated Construction Period
|
|
Estimated Stabilization Date
|
|
Estimated Rentable Square Feet
|
|
Office % Leased
|
|||
In-Process Development Projects
|
|
Start Date
|
|
Completion Date
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
UNDER CONSTRUCTION:
|
|
|
|
|
|
|
|
|
|
|
|
Office
|
|
|
|
|
|
|
|
|
|
|
|
The Exchange on 16th
(1)
|
|
2Q 2015
|
|
3Q 2017
|
|
3Q 2018
|
|
700,000
|
|
|
—%
|
100 Hooper
(2)
|
|
4Q 2016
|
|
1Q 2018
|
|
1Q 2019
|
|
400,000
|
|
|
66%
|
SUBTOTAL:
|
|
|
|
|
|
|
|
1,100,000
|
|
|
20%
|
|
|
|
|
|
|
|
|
|
|
|
|
Mixed-Use
|
|
|
|
|
|
|
|
|
|
|
|
One Paseo - Phase I (Retail and Residential)
(3)
|
|
4Q 2016
|
|
2Q 2018
|
|
2Q 2019
|
|
96,000 Retail
|
|
|
N/A
|
|
|
|
|
|
|
|
|
237 Units
|
|
|
|
(1)
|
Represents timing, estimated rentable square feet and total estimated investment for multi-tenant office project.
|
(2)
|
The project is comprised of approximately 314,000 square feet of office and 86,000 square feet of production, distribution and repair (“PDR”) space. The Company entered into a long term lease with Adobe Systems Inc. for 207,000 square feet of office space which was approximately 66% of the office component at
December 31, 2016
, As of the date of this filling the office component of the project was 100% pre-leased to Adobe Systems Inc. The Company intends to develop an adjacent 50,000 square foot building located at 150 Hooper with a total estimated investment of approximately $21.0 million.
|
(3)
|
In July 2016, the Company received final entitlement approval for this project. Development for this project will occur in phases. Phase I includes site work and related infrastructure for the entire project, as well as 237 residential units and approximately 96,000 square feet of retail space.
|
Location
|
|
Location
|
|
Approx. Developable Square Feet
(1)
|
|
NEAR-TERM DEVELOPMENT PIPELINE
:
|
|
|
|
|
|
|
|
|
|
|
|
333 Dexter
(2)
|
|
South Lake Union
|
|
700,000
|
|
Academy Project
|
|
Hollywood
|
|
545,000
|
|
One Paseo - Phases II and III
(3)
|
|
Del Mar
|
|
640,000
|
|
TOTAL:
|
|
|
|
1,885,000
|
|
|
|
|
|
|
|
FUTURE DEVELOPMENT PIPELINE:
|
|
|
|
|
|
|
|
|
|
|
|
Flower Mart
|
|
San Francisco
|
|
TBD
|
|
9455 Towne Centre Drive
|
|
San Diego
|
|
150,000
|
|
Pacific Corporate Center – Lot 8
|
|
Sorrento Mesa
|
|
170,000
|
|
Santa Fe Summit – Phases II and III
|
|
56 Corridor
|
|
600,000
|
|
(1)
|
Approximate developable square feet could change materially from estimated data provided due to one of more of the following: any significant changes in the economy, market conditions, our markets, tenant requirements and demands, construction costs, new office supply, regulatory and entitlement processes or project design.
|
(2)
|
Consists of four adjacent parcels in the South Lake Union submarket of Seattle.
|
(3)
|
In July 2016, the Company received final entitlement approval for this project. Development for this project will occur in phases. Phases II and III, comprised of office and residential, will commence subject to market conditions and economic factors.
|
Tenant Name
|
|
Annualized Base Rental Revenue
(1)(2)
|
|
Percentage of Total Annualized Base Rental Revenue
(1)
|
|
Lease Expiration Date
|
||
|
|
(in thousands)
|
|
|
|
|
||
LinkedIn Corporation
|
|
$
|
28,344
|
|
|
5.1%
|
|
Various
(4)
|
salesforce.com, inc
(3)
|
|
24,183
|
|
|
4.4%
|
|
Various
(5)
|
|
DIRECTV, LLC
|
|
22,467
|
|
|
4.1%
|
|
September 2027
|
|
Box, Inc.
|
|
22,441
|
|
|
4.1%
|
|
Various
(6)
|
|
Synopsys, Inc.
|
|
15,492
|
|
|
2.8%
|
|
August 2030
|
|
Bridgepoint Education, Inc.
|
|
15,066
|
|
|
2.7%
|
|
Various
(7)
|
|
Dropbox, Inc.
|
|
14,827
|
|
|
2.7%
|
|
August 2027
|
|
Delta Dental of California
|
|
10,313
|
|
|
1.9%
|
|
May 2018
|
|
AMN Healthcare, Inc.
|
|
9,001
|
|
|
1.6%
|
|
July 2027
|
|
Concur Technologies
|
|
8,852
|
|
|
1.6%
|
|
December 2025
|
|
Biotech/Healthcare Industry Tenant
|
|
8,461
|
|
|
1.5%
|
|
September 2029
|
|
Riot Games, Inc.
|
|
6,817
|
|
|
1.2%
|
|
Various
(8)
|
|
Zenefits Insurance Service
|
|
6,756
|
|
|
1.2%
|
|
Various
(9)
|
|
Adobe Systems, Inc.
|
|
6,596
|
|
|
1.2%
|
|
Various
(10)
|
|
Group Health Cooperative
|
|
6,372
|
|
|
1.2%
|
|
September 2017
|
|
Total
|
|
$
|
205,988
|
|
|
37.3%
|
|
|
(1)
|
Annualized base rental revenue includes the impact of straight-lining rent escalations and the amortization of free rent periods and excludes the impact of the following: amortization of deferred revenue related tenant-funded tenant improvements, amortization of above/below market rents, amortization for lease incentives due under existing leases, and expense reimbursement revenue. Excludes month-to-month leases and vacant space as of December 31, 2016.
|
(2)
|
Includes 100% of the annualized base rental revenues of consolidated property partnerships.
|
(3)
|
The Company has entered into leases with various affiliates of the tenant.
|
(4)
|
The LinkedIn Corporation leases, which contribute $2.2 million and $26.1 million, expire in July 2019 and September 2026, respectively.
|
(5)
|
The salesforce.com, inc leases, which contribute $0.4 million, $0.4 million, and $23.4 million, expire in August 2017, August 2018 and September 2032, respectively.
|
(6)
|
The Box, Inc. leases, which contribute $2.1 million and $20.4 million, expire in August 2021 and June 2028, respectively.
|
(7)
|
The Bridgepoint Education Inc. leases, which contribute $1.0 million, $6.3 million and $7.8 million, expire in February 2017, July 2018 and September 2018, respectively.
|
(8)
|
The Riot Games, Inc. leases, which contribute $0.1 million, $1.6 million, and $5.1 million, expire in September 2020, November 2020, and November 2024, respectively.
|
(9)
|
The Zenefits Insurance Service leases, which contribute $0.7 million and $6.1 million, expire in January 2017 and March 2023, respectively.
|
(10)
|
The Adobe Systems, Inc. leases, which contribute $4.4 million and $2.2 million, expire in July 2020 and May 2021, respectively.
|
Year of Lease Expiration
|
# of Expiring Leases
|
|
Total Square Feet
|
|
% of Total Leased Square Feet
|
|
Annualized Base
Rent (000’s)
(1) (2)
|
|
% of Total Annualized
Base Rent
(1)
|
|
Annualized Rent per Square Foot
(1)
|
||||||||
2017
|
107
|
|
|
1,077,323
|
|
|
8.2
|
%
|
|
$
|
40,929
|
|
|
7.4
|
%
|
|
$
|
37.99
|
|
2018
|
82
|
|
|
1,392,576
|
|
|
10.4
|
%
|
|
55,896
|
|
|
10.2
|
%
|
|
40.14
|
|
||
2019
|
103
|
|
|
1,680,867
|
|
|
12.7
|
%
|
|
60,869
|
|
|
11.1
|
%
|
|
36.21
|
|
||
2020
|
104
|
|
|
2,041,185
|
|
|
15.5
|
%
|
|
78,506
|
|
|
14.3
|
%
|
|
38.46
|
|
||
2021
|
85
|
|
|
1,103,693
|
|
|
8.4
|
%
|
|
46,873
|
|
|
8.5
|
%
|
|
42.47
|
|
||
2022
|
43
|
|
|
594,164
|
|
|
4.5
|
%
|
|
25,055
|
|
|
4.5
|
%
|
|
42.17
|
|
||
2023
|
30
|
|
|
713,976
|
|
|
5.4
|
%
|
|
33,851
|
|
|
6.1
|
%
|
|
47.41
|
|
||
2024
|
25
|
|
|
711,568
|
|
|
5.4
|
%
|
|
28,854
|
|
|
5.2
|
%
|
|
40.55
|
|
||
2025
|
8
|
|
|
101,642
|
|
|
0.8
|
%
|
|
4,688
|
|
|
0.9
|
%
|
|
46.12
|
|
||
2026
|
19
|
|
|
1,309,958
|
|
|
9.9
|
%
|
|
50,320
|
|
|
9.2
|
%
|
|
38.41
|
|
||
2027 and beyond
|
22
|
|
|
2,477,604
|
|
|
18.8
|
%
|
|
124,053
|
|
|
22.6
|
%
|
|
50.07
|
|
||
Total
(3)
|
628
|
|
|
13,204,556
|
|
|
100.0
|
%
|
|
$
|
549,894
|
|
|
100.0
|
%
|
|
$
|
41.64
|
|
(1)
|
Annualized base rent includes the impact of straight-lining rent escalations and the amortization of free rent periods and excludes the impact of the following: amortization of deferred revenue related tenant-funded tenant improvements, amortization of above/below market rents, amortization for lease incentives due under existing leases and expense reimbursement revenue. Additionally, the underlying leases contain various expense structures including full service gross, modified gross and triple net. Amounts represent percentage of total portfolio annualized contractual base rental revenue.
|
(2)
|
Includes 100% of consolidated property partnerships.
|
(3)
|
For leases that have been renewed early with existing tenants, the expiration date and annualized base rent information presented takes into consideration the renewed lease terms. Excludes leases not commenced as of
December 31, 2016
, space leased under month-to-month leases, storage leases, vacant space and future lease renewal options not executed as of
December 31, 2016
.
|
ITEM 3.
|
LEGAL PROCEEDINGS
|
ITEM 4.
|
MINE SAFETY DISCLOSURES
|
ITEM 5.
|
MARKET FOR KILROY REALTY CORPORATION’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
2016
|
High
|
|
Low
|
|
Close
|
|
Per Share Common
Stock Dividends
Declared
|
||||||||
First quarter
|
$
|
62.94
|
|
|
$
|
47.38
|
|
|
$
|
61.87
|
|
|
$
|
0.3500
|
|
Second quarter
|
66.29
|
|
|
59.89
|
|
|
66.29
|
|
|
0.3750
|
|
||||
Third quarter
|
73.73
|
|
|
66.06
|
|
|
69.35
|
|
|
0.3750
|
|
||||
Fourth quarter
(1)
|
76.88
|
|
|
66.73
|
|
|
73.22
|
|
|
2.2750
|
|
||||
2015
|
High
|
|
Low
|
|
Close
|
|
Per Share Common
Stock Dividends
Declared
|
||||||||
First quarter
|
$
|
78.86
|
|
|
$
|
70.48
|
|
|
$
|
76.17
|
|
|
$
|
0.3500
|
|
Second quarter
|
77.92
|
|
|
67.15
|
|
|
67.15
|
|
|
0.3500
|
|
||||
Third quarter
|
73.45
|
|
|
63.41
|
|
|
65.16
|
|
|
0.3500
|
|
||||
Fourth quarter
|
69.92
|
|
|
62.83
|
|
|
63.28
|
|
|
0.3500
|
|
(1)
|
Includes a special cash dividend of $1.90 per share of common stock that was paid on January 13, 2017.
|
Period
|
|
Total Number of Shares (or Units) Purchased
|
|
Average Price Paid per Share (or Units)
|
|
Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs
|
|
Maximum Number (or Approximate Dollar Value) that May Yet be Purchased Under the Plans or Programs
|
|||||
October 1 - October 31, 2016
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
—
|
|
November 1 - November 30, 2016
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
—
|
|
December 1 - December 31, 2016
|
|
(19,264
|
)
|
(1)
|
$
|
75.54
|
|
|
—
|
|
|
—
|
|
Total
|
|
(19,264
|
)
|
|
$
|
75.54
|
|
|
—
|
|
|
—
|
|
(1)
|
Includes shares of common stock remitted to the Company to satisfy tax withholding obligations in connection with the distribution of, or the vesting and distribution of, restricted stock units or restricted stock in shares of common stock. The value of such shares of common stock remitted to the Company was based on the closing price of the Company’s common stock on the applicable withholding date.
|
2016
|
|
Per Unit Common
Unit Distribution
Declared
|
|
|
First quarter
|
|
$
|
0.3500
|
|
Second quarter
|
|
0.3750
|
|
|
Third quarter
|
|
0.3750
|
|
|
Fourth quarter
(1)
|
|
2.2750
|
|
|
2015
|
|
Per Unit Common
Unit Distribution
Declared
|
|
|
First quarter
|
|
$
|
0.3500
|
|
Second quarter
|
|
0.3500
|
|
|
Third quarter
|
|
0.3500
|
|
|
Fourth quarter
|
|
0.3500
|
|
(1)
|
Includes a special cash distribution of $1.90 per common unit that was paid on January 13, 2017.
|
ITEM 6.
|
SELECTED FINANCIAL DATA – KILROY REALTY CORPORATION
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
Statements of Operations Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenues from continuing operations
|
$
|
642,572
|
|
|
$
|
581,275
|
|
|
$
|
521,725
|
|
|
$
|
457,111
|
|
|
$
|
373,318
|
|
Income (loss) from continuing operations
|
303,798
|
|
|
238,604
|
|
|
59,313
|
|
|
14,935
|
|
|
(5,475
|
)
|
|||||
Income from discontinued operations
(1)
|
—
|
|
|
—
|
|
|
124,495
|
|
|
29,630
|
|
|
282,576
|
|
|||||
Net income available to common stockholders
|
280,538
|
|
|
220,831
|
|
|
166,969
|
|
|
30,630
|
|
|
249,826
|
|
|||||
Per-Share Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Weighted average shares of common stock outstanding – basic
|
92,342,483
|
|
|
89,854,096
|
|
|
83,090,235
|
|
|
77,343,853
|
|
|
69,639,623
|
|
|||||
Weighted average shares of common stock outstanding – diluted
|
93,023,034
|
|
|
90,395,775
|
|
|
84,967,720
|
|
|
77,343,853
|
|
|
69,639,623
|
|
|||||
Income (loss) from continuing operations available to common stockholders per share of common stock – basic
|
$
|
3.00
|
|
|
$
|
2.44
|
|
|
$
|
0.52
|
|
|
$
|
0.00
|
|
|
$
|
(0.40
|
)
|
Income (loss) from continuing operations available to common stockholders per share of common stock – diluted
|
$
|
2.97
|
|
|
$
|
2.42
|
|
|
$
|
0.51
|
|
|
$
|
0.00
|
|
|
$
|
(0.40
|
)
|
Net income available to common stockholders per share – basic
|
$
|
3.00
|
|
|
$
|
2.44
|
|
|
$
|
1.99
|
|
|
$
|
0.37
|
|
|
$
|
3.56
|
|
Net income available to common stockholders per share – diluted
|
$
|
2.97
|
|
|
$
|
2.42
|
|
|
$
|
1.95
|
|
|
$
|
0.37
|
|
|
$
|
3.56
|
|
Dividends declared per share
(2)
|
$
|
3.375
|
|
|
$
|
1.400
|
|
|
$
|
1.400
|
|
|
$
|
1.400
|
|
|
$
|
1.400
|
|
(1)
|
The Company adopted FASB ASU No. 2014-08 effective January 1, 2015 (see Note 2 “Basis of Presentation and Significant Accounting Policies” to our consolidated financial statements included in this report for additional information). As a result, results of operations for properties classified as held for sale and/or disposed of subsequent to January 1, 2015 are presented in continuing operations. Prior to January 1, 2015, properties classified as held for sale and/or disposed of are presented in discontinued operations.
|
(2)
|
The year ended December 31, 2016 includes a special dividend of $1.90 per share of common stock that was paid on January 13, 2017.
|
|
December 31,
|
||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Total real estate held for investment, before accumulated depreciation and amortization
|
$
|
7,060,754
|
|
|
$
|
6,328,146
|
|
|
$
|
6,057,932
|
|
|
$
|
5,264,947
|
|
|
$
|
4,757,394
|
|
Total assets
(1)
|
6,706,633
|
|
|
5,926,430
|
|
|
5,621,262
|
|
|
5,099,417
|
|
|
4,603,488
|
|
|||||
Total debt
(1)
|
2,320,123
|
|
|
2,225,469
|
|
|
2,456,939
|
|
|
2,193,327
|
|
|
2,028,339
|
|
|||||
Total preferred stock
|
192,411
|
|
|
192,411
|
|
|
192,411
|
|
|
192,411
|
|
|
192,411
|
|
|||||
Total noncontrolling interests
(2)
|
216,322
|
|
|
63,620
|
|
|
57,726
|
|
|
54,848
|
|
|
46,303
|
|
|||||
Total equity
(2)
|
3,759,317
|
|
|
3,234,586
|
|
|
2,723,936
|
|
|
2,516,160
|
|
|
2,235,933
|
|
|||||
Other Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Funds From Operations
(3) (4)
|
$
|
333,742
|
|
|
$
|
316,612
|
|
|
$
|
250,744
|
|
|
$
|
218,621
|
|
|
$
|
165,455
|
|
Cash flows provided by (used in):
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating activities
|
$
|
345,054
|
|
|
$
|
272,008
|
|
|
$
|
245,253
|
|
|
$
|
240,576
|
|
|
$
|
180,724
|
|
Investing activities
|
(635,435
|
)
|
|
(262,752
|
)
|
|
(501,436
|
)
|
|
(506,520
|
)
|
|
(706,506
|
)
|
|||||
Financing activities
|
427,291
|
|
|
23,471
|
|
|
244,587
|
|
|
284,621
|
|
|
537,705
|
|
|||||
Office Property Data:
(5)
|
|
|
|
|
|
|
|
|
|
||||||||||
Rentable square footage
|
14,025,856
|
|
|
13,032,406
|
|
|
14,096,617
|
|
|
12,736,099
|
|
|
13,249,780
|
|
|||||
Occupancy
|
96.0
|
%
|
|
94.8
|
%
|
|
94.4
|
%
|
|
93.4
|
%
|
|
92.8
|
%
|
|||||
Residential Property Data:
(5)
|
|
|
|
|
|
|
|
|
|
||||||||||
Number of units
|
200
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|||||
Occupancy
|
46.0
|
%
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
(1)
|
On January 1, 2016, the Company adopted FASB ASU No. 2015-03 and 2015-15 which require deferred financing costs, except costs paid for the unsecured line of credit, to be reclassified as a reduction to the debt liability balance instead of being reported as an asset as historically presented. As a result, total assets and total debt have been adjusted from prior amounts reported to reflect this change for all periods presented.
|
(2)
|
Includes the noncontrolling interests of the common units of the Operating Partnership and consolidated property partnerships (see Note 2 “Basis of Presentation and Significant Accounting Policies” to our consolidated financial statements included in this report for additional information).
|
(3)
|
We calculate FFO in accordance with the White Paper on FFO approved by the Board of Governors of NAREIT. The White Paper defines FFO as net income or loss calculated in accordance with GAAP, excluding extraordinary items, as defined by GAAP, gains and losses from sales of depreciable real estate and impairment write-downs associated with depreciable real estate, plus real estate-related depreciation and amortization (excluding amortization of deferred financing costs and depreciation of non-real estate assets) and after adjustment for unconsolidated partnerships and joint ventures. Our calculation of FFO includes the amortization of deferred revenue related to tenant-funded tenant improvements and excludes the depreciation of the related tenant improvement assets. We also add back net income attributable to noncontrolling common units of the Operating Partnership because we report FFO attributable to common stockholders and common unitholders.
|
(4)
|
FFO includes amortization of deferred revenue related to tenant-funded tenant improvements of
$13.2 million
,
$13.3 million
,
$11.0 million
,
$10.7 million
and
$9.1 million
for the years ended
December 31, 2016
,
2015
,
2014
,
2013
and
2012
, respectively.
|
(5)
|
Occupancy percentages and total square feet reported are based on the Company’s stabilized office portfolio and one residential tower that was completed in 2016 for the periods presented.
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
Statements of Operations Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenues from continuing operations
|
$
|
642,572
|
|
|
$
|
581,275
|
|
|
$
|
521,725
|
|
|
$
|
457,111
|
|
|
$
|
373,318
|
|
Income (loss) from continuing operations
|
303,798
|
|
|
238,604
|
|
|
59,313
|
|
|
14,935
|
|
|
(5,475
|
)
|
|||||
Income from discontinued operations
(1)
|
—
|
|
|
—
|
|
|
124,495
|
|
|
29,630
|
|
|
282,576
|
|
|||||
Net income available to common unitholders
|
286,813
|
|
|
224,887
|
|
|
170,298
|
|
|
31,091
|
|
|
255,375
|
|
|||||
Per Unit Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Weighted average common units outstanding – basic
|
94,771,688
|
|
|
91,645,578
|
|
|
84,894,498
|
|
|
79,166,260
|
|
|
71,403,258
|
|
|||||
Weighted average common units outstanding – diluted
|
95,452,239
|
|
|
92,187,257
|
|
|
86,771,983
|
|
|
79,166,260
|
|
|
71,403,258
|
|
|||||
Income (loss) from continuing operations available to common unitholders per common unit – basic
|
$
|
2.99
|
|
|
$
|
2.44
|
|
|
$
|
0.52
|
|
|
$
|
0.00
|
|
|
$
|
(0.40
|
)
|
Income (loss) from continuing operations available to common unitholders per common unit – diluted
|
$
|
2.96
|
|
|
$
|
2.42
|
|
|
$
|
0.51
|
|
|
$
|
0.00
|
|
|
$
|
(0.40
|
)
|
Net income available to common unitholders per unit – basic
|
$
|
2.99
|
|
|
$
|
2.44
|
|
|
$
|
1.99
|
|
|
$
|
0.37
|
|
|
$
|
3.56
|
|
Net income available to common unitholders per unit – diluted
|
$
|
2.96
|
|
|
$
|
2.42
|
|
|
$
|
1.94
|
|
|
$
|
0.37
|
|
|
$
|
3.56
|
|
Distributions declared per common unit
(2)
|
$
|
3.375
|
|
|
$
|
1.400
|
|
|
$
|
1.400
|
|
|
$
|
1.400
|
|
|
$
|
1.400
|
|
(1)
|
The Company adopted FASB ASU No. 2014-08 effective January 1, 2015 (see Note 2 “Basis of Presentation and Significant Accounting Policies” to our consolidated financial statements included in this report for additional information). As a result, results of operations for properties classified as held for sale and/or disposed of subsequent to January 1, 2015 are presented in continuing operations. Prior to January 1, 2015, properties classified as held for sale and/or disposed of are presented in discontinued operations.
|
(2)
|
The year ended December 31, 2016 includes a special distribution of $1.90 per common unit that was paid on January 13, 2017.
|
|
December 31,
|
||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Total real estate held for investment, before accumulated depreciation and amortization
|
$
|
7,060,754
|
|
|
$
|
6,328,146
|
|
|
$
|
6,057,932
|
|
|
$
|
5,264,947
|
|
|
$
|
4,757,394
|
|
Total assets
(1)
|
6,706,633
|
|
|
5,926,430
|
|
|
5,621,262
|
|
|
5,099,417
|
|
|
4,603,488
|
|
|||||
Total debt
(1)
|
2,320,123
|
|
|
2,225,469
|
|
|
2,456,939
|
|
|
2,193,327
|
|
|
2,028,339
|
|
|||||
Total preferred capital
|
192,411
|
|
|
192,411
|
|
|
192,411
|
|
|
192,411
|
|
|
192,411
|
|
|||||
Total noncontrolling interests
(2)
|
135,138
|
|
|
10,566
|
|
|
9,625
|
|
|
8,388
|
|
|
3,279
|
|
|||||
Total capital
(2)
|
3,759,317
|
|
|
3,234,586
|
|
|
2,723,936
|
|
|
2,516,160
|
|
|
2,235,933
|
|
|||||
Other Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash flows provided by (used in):
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating activities
|
345,054
|
|
|
272,008
|
|
|
245,253
|
|
|
240,576
|
|
|
180,724
|
|
|||||
Investing activities
|
(635,435
|
)
|
|
(262,752
|
)
|
|
(501,436
|
)
|
|
(506,520
|
)
|
|
(706,506
|
)
|
|||||
Financing activities
|
427,291
|
|
|
23,471
|
|
|
244,587
|
|
|
284,621
|
|
|
537,705
|
|
|||||
Office Property Data:
(3)
|
|
|
|
|
|
|
|
|
|
||||||||||
Rentable square footage
|
14,025,856
|
|
|
13,032,406
|
|
|
14,096,617
|
|
|
12,736,099
|
|
|
13,249,780
|
|
|||||
Occupancy
|
96.0
|
%
|
|
94.8
|
%
|
|
94.4
|
%
|
|
93.4
|
%
|
|
92.8
|
%
|
|||||
Residential Property Data:
(3)
|
|
|
|
|
|
|
|
|
|
||||||||||
Number of units
|
200
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|||||
Occupancy
|
46.0
|
%
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
(1)
|
On January 1, 2016, the Company adopted FASB ASU No. 2015-03 and 2015-15 which require deferred financing costs, except costs paid for the unsecured line of credit, to be reclassified as a reduction to the debt liability balance instead of being reported as an asset as historically presented. As a result, total assets and total debt have been adjusted from prior amounts reported to reflect this change for all periods presented.
|
(2)
|
Includes the noncontrolling interests in consolidated property partnerships and subsidiaries (see Note 2 “Basis of Presentation and Significant Accounting Policies” to our consolidated financial statements included in this report for additional information).
|
(3)
|
Occupancy percentages and total square feet reported are based on the Company’s stabilized office portfolio and one residential tower that was completed in 2016 for the periods presented.
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
global market and general economic conditions and their effect on our liquidity and financial conditions and those of our tenants;
|
•
|
adverse economic or real estate conditions generally, and specifically, in the States of California and Washington;
|
•
|
risks associated with our investment in real estate assets, which are illiquid, and with trends in the real estate industry;
|
•
|
defaults on or non-renewal of leases by tenants;
|
•
|
any significant downturn in tenants’ businesses;
|
•
|
our ability to re-lease property at or above current market rates;
|
•
|
costs to comply with government regulations, including environmental remediation;
|
•
|
the availability of cash for distribution and debt service and exposure to risk of default under debt obligations;
|
•
|
increases in interest rates and our ability to manage interest rate exposure;
|
•
|
the availability of financing on attractive terms or at all, which may adversely impact our future interest expense and our ability to pursue development, redevelopment and acquisition opportunities and refinance existing debt;
|
•
|
a decline in real estate asset valuations, which may limit our ability to dispose of assets at attractive prices or obtain or maintain debt financing, and which may result in write-offs or impairment charges;
|
•
|
significant competition, which may decrease the occupancy and rental rates of properties;
|
•
|
potential losses that may not be covered by insurance;
|
•
|
the ability to successfully complete acquisitions and dispositions on announced terms;
|
•
|
the ability to successfully operate acquired, developed and redeveloped properties;
|
•
|
the ability to successfully complete development and redevelopment projects on schedule and within budgeted amounts;
|
•
|
delays or refusals in obtaining all necessary zoning, land use and other required entitlements, governmental permits and authorizations for our development and redevelopment properties;
|
•
|
increases in anticipated capital expenditures, tenant improvement and/or leasing costs;
|
•
|
defaults on leases for land on which some of our properties are located;
|
•
|
adverse changes to, or implementations of, applicable laws, regulations or legislation;
|
•
|
risks associated with joint venture investments, including our lack of sole decision-making authority, our reliance on co-venturers’ financial condition and disputes between us and our co-venturers;
|
•
|
environmental uncertainties and risks related to natural disasters; and
|
•
|
our ability to maintain our status as a REIT.
|
•
|
whether the lease agreement requires landlord approval of how the tenant improvement allowance is spent prior to installation of the tenant improvements;
|
•
|
whether the lease agreement requires the tenant to provide evidence to the landlord supporting the cost and what the tenant improvement allowance was spent on prior to payment by the landlord for such tenant improvements;
|
•
|
whether the tenant improvements are unique to the tenant or reusable by other tenants;
|
•
|
whether the tenant is permitted to alter or remove the tenant improvements without the consent of the landlord or without compensating the landlord for any lost utility or diminution in fair value; and
|
•
|
whether the ownership of the tenant improvements remains with the landlord or remains with the tenant at the end of the lease term.
|
•
|
estimating the final expenses, net of accruals, that are recoverable;
|
•
|
estimating the fixed and variable components of operating expenses for each building;
|
•
|
conforming recoverable expense pools to those used in establishing the base year or base allowance for the applicable underlying lease; and
|
•
|
concluding whether an expense or capital expenditure is recoverable pursuant to the terms of the underlying lease.
|
•
|
low occupancy levels, forecasted low occupancy levels or near term lease expirations at a specific property;
|
•
|
current period operating or cash flow losses combined with a historical pattern or future projection of potential continued operating or cash flow losses at a specific property;
|
•
|
deterioration in rental rates for a specific property as evidenced by sudden significant rental rate decreases or continuous rental rate decreases over numerous quarters, which could signal a continued decrease in future cash flow for that property;
|
•
|
deterioration of a given rental submarket as evidenced by significant increases in market vacancy and/or negative absorption rates or continuous increases in market vacancy and/or negative absorption rates over numerous quarters, which could signal a decrease in future cash flow for properties within that submarket;
|
•
|
significant increases in property sales yields, continuous increases in property sales yields over several quarters, or recent property sales at a loss within a given submarket, each of which could signal a decrease in the market value of properties;
|
•
|
significant change in strategy or use of a specific property or any other event that could result in a decreased holding period, including classifying a property as held for sale, or significant development delay;
|
•
|
evidence of material physical damage to the property; and
|
•
|
default by a significant tenant when any of the other indicators above are present.
|
•
|
provide benefit in future periods;
|
•
|
extend the useful life of the asset beyond our original estimates; and
|
•
|
increase the quality of the asset beyond our original estimates.
|
•
|
350 Mission Street, SOMA, San Francisco, California, which we acquired in October 2012 and was stabilized in March 2016. This development project has a total estimated investment of approximately
$277.8 million
and encompasses approximately
455,340
rentable square feet. The office component of this project is
100%
leased to salesforce.com, inc.
|
•
|
333 Brannan Street, SOMA, San Francisco, California, which we acquired in July 2012 and was stabilized in March 2016. This development project has a total estimated investment of approximately
$101.5 million
and
|
•
|
The Heights at Del Mar, Del Mar, California, a
73,000
square foot office project that has a total estimated investment of approximately
$45.0 million
. The building core and shell of the project were completed in the fourth quarter of 2015. As of
December 31, 2016
, the project was
65%
committed and was moved from “lease-up” to the stabilized portfolio in the fourth quarter of 2016 since the project had reached one year from building shell substantial completion.
|
•
|
Columbia Square - Residential, Hollywood, California, the 21-story residential component of the Columbia Square project, which is comprised of
200
units, is a mix of high-end long-term rentals and extended stay apartment homes and has a total estimated investment of approximately
$160.0 million
. As of
December 31, 2016
, the project was
57%
leased. Construction on the project was completed in the second quarter of 2016.
|
•
|
Columbia Square Phase 2 - Office, Hollywood, California, located in the heart of Hollywood, California, two blocks from the corner of Sunset Boulevard and Vine Street. This project is comprised of three buildings totaling approximately
377,000
rentable square feet with a total estimated investment of
$230.0 million
. The building core and shell of the project were completed in the first quarter of 2016. The project is currently
86%
committed and
74%
occupied and is expected to be added to the stabilized portfolio in the first quarter of 2017.
|
•
|
The Exchange on 16th, Mission Bay, San Francisco, California, which we acquired in May 2014 and commenced construction on in June 2015. This project is currently anticipated to encompass approximately
700,000
gross rentable square feet of office space in four buildings at a total estimated investment of approximately
$485.0 million
. Construction is currently in process and the building and core shell are estimated to be completed in the second half of 2017. The timing, estimated gross rentable square feet and total estimated investment are for a multi-tenant office project.
|
•
|
100 Hooper, San Francisco, California, which we acquired in July 2015 and commenced construction on in November 2016. This project is fully entitled for approximately 314,000 square feet of office and approximately 86,000 square feet of PDR space configured in two, four-story buildings. The total estimated cost for this project is approximately
$270.0 million
. Construction is currently in process and the core and shell of the project is currently expected to be completed in the first half of 2018. The office portion of the project was
66%
pre-leased to Adobe Systems Inc. at
December 31, 2016
and is currently 100% pre-leased to Adobe Systems Inc as of the date of this filing. In connection with 100 Hooper, the Company also intends to develop an adjacent 50,000 square foot PDR space located at 150 Hooper with a total estimated investment of approximately $21.0 million.
|
•
|
One Paseo - Phase I (Retail and Residential), San Diego, California, which we acquired in November 2007 and commenced construction on in December 2016. Phase I of this mixed-use project includes site work and related infrastructure for the entire project, as well as 237 residential units and approximately 96,000 square feet of retail space. The total estimated investment for this project is approximately
$225.0 million
. Construction is currently in process and is currently expected to be completed in the second quarter of 2019.
|
Near-Term Development Pipeline
(1)
|
|
Location
|
|
Potential Start Date
(2)
|
|
Approx. Developable Square Feet
|
|
Total Estimated Investment
|
|
Total Costs as of 12/31/2016
(3)
(in millions)
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||
333 Dexter
(4)
|
|
South Lake Union
|
|
2017
|
|
700,000
|
|
$
|
385
|
|
|
$
|
73.5
|
|
Academy Project
|
|
Hollywood
|
|
2017
|
|
545,000
|
|
390
|
|
|
73.5
|
|
||
One Paseo - Phases II and III
(5)
|
|
Del Mar
|
|
TBD
|
|
640,000
|
|
440
|
|
|
127.1
|
|
||
|
|
|
|
|
|
|
|
|
|
|
||||
Total Near-Term Development Pipeline
|
|
|
|
|
|
1,885,000
|
|
$
|
1,215
|
|
|
$
|
274.1
|
|
(1)
|
Project timing, costs, developable square feet and scope could change materially from estimated data provided due to one of more of the following: any significant changes in the economy, market conditions, our markets, tenant requirements and demands, construction costs, new office supply, regulatory and entitlement processes, and project design.
|
(2)
|
Potential start dates assume successfully obtaining all entitlements and approvals necessary to commence construction. Actual commencement is subject to extensive consideration of market conditions and economic factors.
|
(3)
|
Represents cash paid and costs incurred as of
December 31, 2016
.
|
(4)
|
Consists of four adjacent parcels in the South Lake Union submarket of Seattle.
|
(5)
|
In July 2016, the Company received final entitlement approval for this project. Development for this project will occur in phases. Phase I includes the project's overall infrastructure and site work, 237 residential units and approximately 96,000 square feet of retail space. Phases II and III, comprised of office and residential, will commence subject to market conditions and economic factors.
|
|
1st & 2nd Generation
(1)
|
|
2nd Generation
(1)
|
||||||||||||||||||||||||
|
Number of
Leases
(2)
|
|
Rentable
Square Feet
(2)
|
|
TI/LC per
Sq. Ft.
(3)
|
|
Changes in
Rents
(4)(5)
|
|
Changes in
Cash Rents
(6)
|
|
Retention Rates
(7)
|
|
Weighted Average Lease Term (in months)
|
||||||||||||||
|
New
|
|
Renewal
|
|
New
|
|
Renewal
|
|
|||||||||||||||||||
Year Ended December 31, 2016
|
86
|
|
|
63
|
|
|
585,637
|
|
|
476,011
|
|
|
$
|
38.78
|
|
|
24.4
|
%
|
|
11.9
|
%
|
|
47.9
|
%
|
|
66
|
|
|
1st & 2nd Generation
(1)
|
|
2nd Generation
(1)
|
|||||||||||||||||||||
|
Number of Leases
(2)
|
|
Rentable Square Feet
(2)
|
|
TI/LC per Sq. Ft.
(3)
|
|
Changes in
Rents
(4)(5)
|
|
Changes in
Cash Rents
(6)
|
|
Weighted Average Lease Term
(in months)
|
|||||||||||||
|
New
|
|
Renewal
|
|
New
|
|
Renewal
|
|
|
|
||||||||||||||
Year Ended December 31, 2016
|
81
|
|
|
63
|
|
|
799,255
|
|
|
476,011
|
|
|
$
|
50.60
|
|
|
30.2
|
%
|
|
13.4
|
%
|
|
80
|
|
(1)
|
First generation leasing includes space where we have made capital expenditures that result in additional revenue generated when the space is re-leased. Second generation leasing includes space where we have made capital expenditures to maintain the current market revenue stream.
|
(2)
|
Represents leasing activity for leases that commenced or signed during the period, including first and second generation space, net of month-to-month leases. Excludes leasing on new construction.
|
(3)
|
Amounts exclude tenant-funded tenant improvements.
|
(4)
|
Calculated as the change between GAAP rents for new/renewed leases and the expiring GAAP rents for the same space. Excludes leases for which the space was vacant longer than one year or vacant when the property was acquired.
|
(5)
|
Excludes commenced and executed leases of approximately 169,837 and 157,531 rentable square feet, respectively, for the year ended
December 31, 2016
, for which the space was vacant longer than one year or being leased for the first time. Space vacant for more than one year is excluded from our change in rents calculations to provide a meaningful market comparison.
|
(6)
|
Calculated as the change between stated cash rents for new/renewed leases and the expiring stated rents for the same space. Excludes leases for which the space was vacant longer than one year or vacant when the property was acquired.
|
(7)
|
Calculated as the percentage of space either renewed or expanded into by existing tenants or subtenants at lease expiration.
|
(8)
|
For the year ended
December 31, 2016
, 20 new leases totaling 437,592 rentable square feet were signed but not commenced as of
December 31, 2016
.
|
Year of Lease Expiration
|
|
Number of
Expiring
Leases
|
|
Total Square Feet
|
|
% of Total Leased Sq. Ft.
|
|
Annualized Base Rent
(2)
|
|
% of Total Annualized Base Rent
(2)
|
|
Annualized Base Rent per Sq. Ft.
(2)
|
||||||||
2017
|
|
107
|
|
|
1,077,323
|
|
|
8.2
|
%
|
|
$
|
40,929
|
|
|
7.4
|
%
|
|
$
|
37.99
|
|
2018
|
|
82
|
|
|
1,392,576
|
|
|
10.4
|
%
|
|
55,896
|
|
|
10.2
|
%
|
|
40.14
|
|
||
2019
|
|
103
|
|
|
1,680,867
|
|
|
12.7
|
%
|
|
60,869
|
|
|
11.1
|
%
|
|
36.21
|
|
||
2020
|
|
104
|
|
|
2,041,185
|
|
|
15.5
|
%
|
|
78,506
|
|
|
14.3
|
%
|
|
38.46
|
|
||
2021
|
|
85
|
|
|
1,103,693
|
|
|
8.4
|
%
|
|
46,873
|
|
|
8.5
|
%
|
|
42.47
|
|
||
Total
|
|
481
|
|
|
7,295,644
|
|
|
55.2
|
%
|
|
$
|
283,073
|
|
|
51.5
|
%
|
|
$
|
38.80
|
|
(1)
|
For leases that have been renewed early with existing tenants, the expiration date and annualized base rent information presented takes into consideration the renewed lease terms. Excludes leases not commenced as of
December 31, 2016
, space leased under month-to-month leases, storage leases, vacant space and future lease renewal options not executed as of
December 31, 2016
.
|
(2)
|
Annualized base rent includes the impact of straight-lining rent escalations and the amortization of free rent periods and excludes the impact of the following: amortization of deferred revenue related tenant-funded tenant improvements, amortization of above/below market rents, amortization for lease incentives due under existing leases, and expense reimbursement revenue. Additionally, the underlying leases contain various expense structures including full service gross, modified gross and triple net. Percentages represent percentage of total portfolio annualized contractual base rental revenue. For additional information on tenant improvement and leasing commission costs incurred by the Company for the current reporting period, please see further discussion under the caption “Information on Leases Commenced and Executed.”
|
|
Number of
Properties/Projects
|
|
Estimated Office Rentable
Square Feet
|
|
Properties held for sale
(1)
|
1
|
|
67,995
|
|
Development project in “lease-up”
(2)
|
1
|
|
377,000
|
|
Development projects under construction
(2) (3)
|
3
|
|
1,100,000
|
|
(1)
|
See Note 4 “Dispositions and Real Estate Assets Held for Sale” to our consolidated financial statements included in this report for additional information.
|
(2)
|
Estimated rentable square feet upon completion.
|
(3)
|
Development projects under construction also include
96,000
square feet of retail space and
237
residential units in addition to the estimated office rentable square feet noted above.
|
|
Number of
Buildings
|
|
Rentable
Square Feet
|
||
Total as of December 31, 2015
|
101
|
|
|
13,032,406
|
|
Acquisitions
(1)
|
7
|
|
|
458,459
|
|
Completed development properties placed in-service
|
3
|
|
|
713,974
|
|
Dispositions and properties held for sale at December 31, 2016
(2)
|
(3
|
)
|
|
(204,903
|
)
|
Remeasurement
|
—
|
|
|
25,920
|
|
Total as of December 31, 2016
(3)
|
108
|
|
|
14,025,856
|
|
(1)
|
Excludes 2016 undeveloped land acquisitions.
|
(2)
|
Excludes dispositions of properties held for sale as of
December 31, 2015
.
|
(3)
|
Includes
four
properties owned by consolidated property partnerships (see Note 2 “Basis of Presentation and Significant Accounting Policies” to our consolidated financial statements included in this report for additional information).
|
Region
|
Number of
Buildings |
|
Rentable Square Feet
|
|
Occupancy at
(1)
|
|||||||||
|
12/31/2016
|
|
12/31/2015
|
|
12/31/2014
|
|||||||||
Los Angeles and Ventura Counties
|
33
|
|
|
3,812,097
|
|
|
95.0
|
%
|
|
95.1
|
%
|
|
92.8
|
%
|
Orange County
|
1
|
|
|
271,556
|
|
|
97.8
|
%
|
|
94.0
|
%
|
|
98.7
|
%
|
San Diego County
|
31
|
|
|
2,718,541
|
|
|
93.2
|
%
|
|
89.6
|
%
|
|
90.9
|
%
|
San Francisco Bay Area
|
31
|
|
|
5,157,524
|
|
|
97.6
|
%
|
|
98.1
|
%
|
|
97.3
|
%
|
Greater Seattle
|
12
|
|
|
2,066,138
|
|
|
97.2
|
%
|
|
95.1
|
%
|
|
98.1
|
%
|
Total Stabilized Portfolio
|
108
|
|
|
14,025,856
|
|
|
96.0
|
%
|
|
94.8
|
%
|
|
94.4
|
%
|
|
Average Occupancy
|
||||
|
Year Ended December 31,
|
||||
|
2016
|
|
2015
|
||
Stabilized Portfolio
(1)
|
95.5
|
%
|
|
95.6
|
%
|
Same Store Portfolio
(2)
|
95.9
|
%
|
|
95.8
|
%
|
(1)
|
Occupancy percentages reported are based on our stabilized office portfolio as of the end of the period presented.
|
(2)
|
Occupancy percentages reported are based on office properties owned and stabilized as of January 1,
2015
and still owned and stabilized as of
December 31, 2016
. See discussion under “Results of Operations” for additional information.
|
•
|
Same Store Properties – includes the consolidated results of all of the office properties that were owned and included in our stabilized portfolio for two comparable reporting periods, i.e., owned and included in our stabilized portfolio as of January 1,
2015
and still owned and included in the stabilized portfolio as of
December 31, 2016
;
|
•
|
Stabilized Development Properties – includes the results generated by the following:
|
◦
|
One office development project that was added to the stabilized portfolio in the fourth quarter of 2016;
|
◦
|
Two office development projects that were completed and stabilized in March 2016; and
|
◦
|
Two office development projects comprising four office buildings that were completed and stabilized in the fourth quarter of 2015;
|
•
|
Acquisition Properties – includes the results, from the dates of acquisition through the periods presented, for the four office and three retail buildings we acquired in three transactions during 2016; and
|
•
|
2016 Held for Sale, Dispositions and Other Properties – includes the results of the
six
properties disposed of in 2016, the
ten
properties disposed of in 2015,
one
property held for sale at
December 31, 2016
,
one
office project in “lease-up” at
December 31, 2016
, the residential property completed in June 2016, and expenses for certain of our in-process, near-term and future development projects.
|
Group
|
|
# of Buildings
|
|
Rentable
Square Feet
|
||
Same Store Properties
|
|
94
|
|
|
12,388,876
|
|
Stabilized Development Properties
|
|
7
|
|
|
1,178,521
|
|
Acquisition Properties
|
|
7
|
|
|
458,459
|
|
Total Stabilized Portfolio
|
|
108
|
|
14,025,856
|
|
|
Year Ended December 31,
|
|
Dollar
Change
|
|
Percentage
Change
|
|||||||||
|
2016
|
|
2015
|
|
||||||||||
|
($ in thousands)
|
|||||||||||||
Reconciliation of Net Income Available to Common Stockholders to Net Operating Income, as defined:
|
|
|
|
|
|
|
|
|||||||
Net Income Available to Common Stockholders
|
$
|
280,538
|
|
|
$
|
220,831
|
|
|
$
|
59,707
|
|
|
27.0
|
%
|
Preferred dividends
|
13,250
|
|
|
13,250
|
|
|
—
|
|
|
—
|
|
|||
Net income attributable to Kilroy Realty Corporation
|
293,788
|
|
|
234,081
|
|
|
59,707
|
|
|
25.5
|
|
|||
Net income attributable to noncontrolling common units of the Operating Partnership
|
6,635
|
|
|
4,339
|
|
|
2,296
|
|
|
52.9
|
|
|||
Net income attributable to noncontrolling interests in consolidated property partnerships
|
3,375
|
|
|
184
|
|
|
3,191
|
|
|
1,734.2
|
|
|||
Net income
|
$
|
303,798
|
|
|
$
|
238,604
|
|
|
$
|
65,194
|
|
|
27.3
|
%
|
Unallocated expense (income):
|
|
|
|
|
|
|
|
|||||||
General and administrative expenses
|
57,029
|
|
|
48,265
|
|
|
8,764
|
|
|
18.2
|
|
|||
Acquisition-related expenses
|
1,902
|
|
|
497
|
|
|
1,405
|
|
|
282.7
|
|
|||
Depreciation and amortization
|
217,234
|
|
|
204,294
|
|
|
12,940
|
|
|
6.3
|
|
|||
Interest income and other net investment (gains) losses
|
(1,764
|
)
|
|
(243
|
)
|
|
(1,521
|
)
|
|
625.9
|
|
|||
Interest expense
|
55,803
|
|
|
57,682
|
|
|
(1,879
|
)
|
|
(3.3
|
)
|
|||
Net loss (gain) on sales of land
|
295
|
|
|
(17,116
|
)
|
|
17,411
|
|
|
(101.7
|
)
|
|||
Gains on sales of depreciable operating properties
|
(164,302
|
)
|
|
(109,950
|
)
|
|
(54,352
|
)
|
|
49.4
|
|
|||
Net Operating Income, as defined
|
$
|
469,995
|
|
|
$
|
422,033
|
|
|
$
|
47,962
|
|
|
11.4
|
%
|
|
Year Ended December 31,
|
||||||||||||||||||||||||||||||||||||||
|
2016
|
|
2015
|
||||||||||||||||||||||||||||||||||||
|
Same
Store
|
|
Stabilized Develop-ment
|
|
Acquisitions
|
|
2016 Held for Sale Disposi-tions & Other
|
|
Total
|
|
Same
Store
|
|
Stabilized Develop-ment
|
|
Acquisitions
|
|
2016 Held for Sale Disposi-tions & Other
|
|
Total
|
||||||||||||||||||||
|
(in thousands)
|
|
(in thousands)
|
||||||||||||||||||||||||||||||||||||
Operating revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Rental income
|
$
|
502,606
|
|
|
$
|
59,779
|
|
|
$
|
4,250
|
|
|
$
|
7,778
|
|
|
$
|
574,413
|
|
|
$
|
486,905
|
|
|
$
|
7,173
|
|
|
$
|
—
|
|
|
$
|
31,277
|
|
|
$
|
525,355
|
|
Tenant reimbursements
|
47,641
|
|
|
12,099
|
|
|
922
|
|
|
417
|
|
|
61,079
|
|
|
48,305
|
|
|
324
|
|
|
—
|
|
|
5,145
|
|
|
53,774
|
|
||||||||||
Other property income
|
1,915
|
|
|
22
|
|
|
53
|
|
|
5,090
|
|
|
7,080
|
|
|
1,958
|
|
|
3
|
|
|
—
|
|
|
185
|
|
|
2,146
|
|
||||||||||
Total
|
552,162
|
|
|
71,900
|
|
|
5,225
|
|
|
13,285
|
|
|
642,572
|
|
|
537,168
|
|
|
7,500
|
|
|
—
|
|
|
36,607
|
|
|
581,275
|
|
||||||||||
Property and related expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Property expenses
|
98,649
|
|
|
7,413
|
|
|
477
|
|
|
7,393
|
|
|
113,932
|
|
|
100,045
|
|
|
617
|
|
|
—
|
|
|
4,716
|
|
|
105,378
|
|
||||||||||
Real estate taxes
|
44,591
|
|
|
7,534
|
|
|
446
|
|
|
2,635
|
|
|
55,206
|
|
|
45,500
|
|
|
642
|
|
|
—
|
|
|
4,081
|
|
|
50,223
|
|
||||||||||
Provision for bad debts
|
(179
|
)
|
|
116
|
|
|
51
|
|
|
12
|
|
|
—
|
|
|
598
|
|
|
—
|
|
|
—
|
|
|
(53
|
)
|
|
545
|
|
||||||||||
Ground leases
|
3,356
|
|
|
—
|
|
|
83
|
|
|
—
|
|
|
3,439
|
|
|
3,096
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,096
|
|
||||||||||
Total
|
146,417
|
|
|
15,063
|
|
|
1,057
|
|
|
10,040
|
|
|
172,577
|
|
|
149,239
|
|
|
1,259
|
|
|
—
|
|
|
8,744
|
|
|
159,242
|
|
||||||||||
Net Operating Income, as defined
|
$
|
405,745
|
|
|
$
|
56,837
|
|
|
$
|
4,168
|
|
|
$
|
3,245
|
|
|
$
|
469,995
|
|
|
$
|
387,929
|
|
|
$
|
6,241
|
|
|
$
|
—
|
|
|
$
|
27,863
|
|
|
$
|
422,033
|
|
|
Year Ended December 31, 2016 as compared to the Year Ended December 31, 2015
|
|||||||||||||||||||||||||||||||||
|
Same Store
|
|
Stabilized Development
|
|
Acquisitions
|
|
2016 Held for Sale, Dispositions & Other
|
|
Total
|
|||||||||||||||||||||||||
|
Dollar Change
|
|
Percent Change
|
|
Dollar Change
|
|
Percent Change
|
|
Dollar Change
|
|
Percent Change
|
|
Dollar Change
|
|
Percent Change
|
|
Dollar Change
|
|
Percent Change
|
|||||||||||||||
|
($ in thousands)
|
|||||||||||||||||||||||||||||||||
Operating revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Rental income
|
$
|
15,701
|
|
|
3.2
|
%
|
|
$
|
52,606
|
|
|
733.4
|
%
|
|
$
|
4,250
|
|
|
100.0
|
%
|
|
$
|
(23,499
|
)
|
|
(75.1
|
)%
|
|
$
|
49,058
|
|
|
9.3
|
%
|
Tenant reimbursements
|
(664
|
)
|
|
(1.4
|
)
|
|
11,775
|
|
|
3,634.3
|
|
|
922
|
|
|
100.0
|
|
|
(4,728
|
)
|
|
(91.9
|
)
|
|
7,305
|
|
|
13.6
|
|
|||||
Other property income
|
(43
|
)
|
|
(2.2
|
)
|
|
19
|
|
|
633.3
|
|
|
53
|
|
|
100.0
|
|
|
4,905
|
|
|
2,651.4
|
|
|
4,934
|
|
|
229.9
|
|
|||||
Total
|
14,994
|
|
|
2.8
|
|
|
64,400
|
|
|
858.7
|
|
|
5,225
|
|
|
100.0
|
|
|
(23,322
|
)
|
|
(63.7
|
)
|
|
61,297
|
|
|
10.5
|
|
|||||
Property and related expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Property expenses
|
(1,396
|
)
|
|
(1.4
|
)
|
|
6,796
|
|
|
1,101.5
|
|
|
477
|
|
|
100.0
|
|
|
2,677
|
|
|
56.8
|
|
|
8,554
|
|
|
8.1
|
|
|||||
Real estate taxes
|
(909
|
)
|
|
(2.0
|
)
|
|
6,892
|
|
|
1,073.5
|
|
|
446
|
|
|
100.0
|
|
|
(1,446
|
)
|
|
(35.4
|
)
|
|
4,983
|
|
|
9.9
|
|
|||||
Provision for bad debts
|
(777
|
)
|
|
(129.9
|
)
|
|
116
|
|
|
100.0
|
|
|
51
|
|
|
100.0
|
|
|
65
|
|
|
(122.6
|
)
|
|
(545
|
)
|
|
(100.0
|
)
|
|||||
Ground leases
|
260
|
|
|
8.4
|
|
|
—
|
|
|
—
|
|
|
83
|
|
|
100.0
|
|
|
—
|
|
|
—
|
|
|
343
|
|
|
11.1
|
|
|||||
Total
|
(2,822
|
)
|
|
(1.9
|
)
|
|
13,804
|
|
|
1,096.4
|
|
|
1,057
|
|
|
100.0
|
|
|
1,296
|
|
|
14.8
|
|
|
13,335
|
|
|
8.4
|
|
|||||
Net Operating Income,
as defined
|
$
|
17,816
|
|
|
4.6
|
%
|
|
$
|
50,596
|
|
|
810.7
|
%
|
|
$
|
4,168
|
|
|
100.0
|
%
|
|
$
|
(24,618
|
)
|
|
(88.4
|
)%
|
|
$
|
47,962
|
|
|
11.4
|
%
|
•
|
An increase of
$17.8 million
attributable to the Same Store Properties primarily resulting from:
|
•
|
An increase in rental income of
$15.7 million
primarily due to the following:
|
◦
|
$14.0 million increase due to new leases at higher rates and increased occupancy;
|
◦
|
$0.9 million increase due to amortization of tenant-funded tenant improvements revenue; and
|
◦
|
$0.8 million increase in parking income resulting from increased occupancy and rates at certain of our buildings;
|
•
|
A partially offsetting decrease in tenant reimbursements of
$0.7 million
primarily due to:
|
◦
|
$2.1 million decrease due to reduced supplemental property taxes at three development properties;
|
◦
|
$0.5 million decrease due to base year resets and adjustments for a number of tenants across the portfolio;
|
◦
|
$1.4 million increase due to higher expenses at certain properties; and
|
◦
|
$0.5 million increase due to lower abatements;
|
•
|
A decrease in property and related expenses of
$2.8 million
primarily resulting from:
|
•
|
A decrease of
$1.4 million
in
property expenses primarily resulting from:
|
◦
|
A $1.0 million decrease in certain recurring operating costs related to electricity, insurance, repairs and maintenance, and various other reimbursable expenses; and
|
◦
|
A decrease of $0.4 million due to a $1.0 million decrease in non-recurring expenses as compared to the prior year, offset by the impact of $0.6 million of property damage insurance proceeds received in 2015;
|
•
|
A decrease of
$0.9 million
in real estate taxes primarily due to:
|
◦
|
A $3.1 million decrease in supplemental taxes primarily at three properties that we developed and stabilized in 2014 resulting from lower assessed values than previously estimated and successful appeals; partially offset by
|
◦
|
$2.2 million due to higher refunds received in 2015 as a result of successful property tax appeals;
|
•
|
A decrease of
$0.8 million
in provision for bad debts due to the evaluation of reserves at the end of each period; and
|
•
|
An increase of $0.3 million in ground rent primarily due to higher percentage rent as a result of one property that became fully leased in 2016;
|
•
|
An increase of
$50.6 million
attributable to the Stabilized Development Properties;
|
•
|
An increase of
$4.2 million
attributable to the Acquisition Properties; and
|
•
|
A decrease of
$24.6 million
attributable to the 2016 Held for Sale, Dispositions & Other Properties primarily due to the following:
|
◦
|
A net decrease of $28.4 million due to the sale of six buildings during the year ended
December 31, 2016
, the sale of ten buildings during the year ended December 31, 2015 and the one property held for sale as of
December 31, 2016
, partially offset by $5.0 million due to a property damage settlement received in
2016
for a property that was disposed of in
2016
;
|
◦
|
A net decrease of $4.0 million attributable to the residential property that was completed in June 2016, consisting of $2.1 million in rental income offset by $6.1 million in property expenses given that the residential property is still in the early stages of operations; offset by
|
◦
|
An increase of $2.8 million attributable to our one property in “lease-up” at December 31, 2016.
|
•
|
An increase of $5.4 million attributable to share-based compensation expense related to the 2016 restricted stock unit grants;
|
•
|
An increase of approximately $1.7 million related to higher payroll costs and office expenses related to the growth of the company; and
|
•
|
An increase of $0.8 million attributable to compensation expense related to the mark-to-market adjustment for the Company’s deferred compensation plan. The compensation expense was offset by gains on the underlying marketable securities included in interest income and other net investment gains (losses) in the consolidated statements of operations.
|
•
|
An increase of $13.7 million attributable to the Stabilized Development Properties;
|
•
|
An increase of $2.8 million attributable to the Same Store Properties;
|
•
|
An increase of $2.2 million attributable to the Acquisition Properties; partially offset by
|
•
|
A decrease of $5.8 million attributable to the 2016 Held for Sale, Dispositions & Other Properties.
|
|
Year Ended December 31,
|
|
Dollar
Change
|
|
Percentage
Change
|
|||||||||
|
2016
|
|
2015
|
|
|
|||||||||
|
($ in thousands)
|
|||||||||||||
Gross interest expense
|
$
|
105,263
|
|
|
$
|
109,647
|
|
|
$
|
(4,384
|
)
|
|
(4.0
|
)%
|
Capitalized interest
|
(49,460
|
)
|
|
(51,965
|
)
|
|
2,505
|
|
|
4.8
|
|
|||
Interest expense
|
$
|
55,803
|
|
|
$
|
57,682
|
|
|
$
|
(1,879
|
)
|
|
(3.3
|
)%
|
•
|
Same Store Properties – includes the results of all of the office properties that were owned and included in our stabilized portfolio for two comparable reporting periods, i.e., owned and included in our stabilized portfolio as of January 1,
2014
and still owned and included in the stabilized portfolio as of
December 31, 2015
;
|
•
|
Stabilized Development and Redevelopment Properties – includes the results generated by the following:
|
◦
|
Two office development projects comprising four office buildings that were completed and stabilized in the fourth quarter of 2015;
|
◦
|
One office development project comprising two office buildings that was completed and stabilized in the fourth quarter of 2014;
|
◦
|
One office development project consisting of three office buildings that was completed and stabilized in the third quarter of 2014; and
|
◦
|
One office redevelopment property that was stabilized in the first quarter of 2014 following its one year lease-up period.
|
•
|
2014 Acquisition Properties – includes the results, from the dates of acquisition through the periods presented, for the
five
office buildings we acquired during 2014; and
|
•
|
2015 Held for Sale, Dispositions, and Other Properties – includes the results for both periods presented of the
four
properties held for sale at
December 31, 2015
, the
ten
properties disposed of in 2015, and expenses for certain of our in-process, near-term and future development projects.
|
Group
|
|
# of Buildings
|
|
Rentable
Square Feet
|
||
Same Store Properties
|
|
86
|
|
|
10,818,177
|
|
Stabilized Development and Redevelopment Properties
|
|
10
|
|
|
1,806,642
|
|
2014 Acquisition Properties
|
|
5
|
|
|
407,587
|
|
Total Stabilized Portfolio
|
|
101
|
|
13,032,406
|
|
|
Year Ended December 31,
|
|
Dollar
Change
|
|
Percentage
Change
|
|||||||||
|
2015
|
|
2014
|
|
||||||||||
|
($ in thousands)
|
|||||||||||||
Reconciliation of Net Income Available to Common Stockholders to Net Operating Income, as defined:
|
|
|
|
|
|
|
|
|||||||
Net Income Available to Common Stockholders
|
$
|
220,831
|
|
|
$
|
166,969
|
|
|
$
|
53,862
|
|
|
32.3
|
%
|
Preferred dividends
|
13,250
|
|
|
13,250
|
|
|
—
|
|
|
—
|
|
|||
Net income attributable to Kilroy Realty Corporation
|
234,081
|
|
|
180,219
|
|
|
53,862
|
|
|
29.9
|
|
|||
Net income attributable to noncontrolling common units of the Operating Partnership
|
4,339
|
|
|
3,589
|
|
|
750
|
|
|
20.9
|
|
|||
Net income attributable to noncontrolling interests in consolidated property partnerships
|
184
|
|
|
—
|
|
|
184
|
|
|
100.0
|
|
|||
Net income
|
$
|
238,604
|
|
|
$
|
183,808
|
|
|
$
|
54,796
|
|
|
29.8
|
%
|
Income from discontinued operations
(1)
|
—
|
|
|
(124,495
|
)
|
|
124,495
|
|
|
(100.0
|
)
|
|||
Income from continuing operations
|
$
|
238,604
|
|
|
$
|
59,313
|
|
|
$
|
179,291
|
|
|
302.3
|
%
|
Unallocated expense (income):
|
|
|
|
|
|
|
|
|||||||
General and administrative expenses
|
48,265
|
|
|
46,152
|
|
|
2,113
|
|
|
4.6
|
|
|||
Acquisition-related expenses
|
497
|
|
|
1,479
|
|
|
(982
|
)
|
|
(66.4
|
)
|
|||
Depreciation and amortization
|
204,294
|
|
|
202,417
|
|
|
1,877
|
|
|
0.9
|
|
|||
Interest income and other net investment (gains) losses
|
(243
|
)
|
|
(561
|
)
|
|
318
|
|
|
(56.7
|
)
|
|||
Interest expense
|
57,682
|
|
|
67,571
|
|
|
(9,889
|
)
|
|
(14.6
|
)
|
|||
Gains on sales of land, net
|
(17,116
|
)
|
|
(3,490
|
)
|
|
(13,626
|
)
|
|
390.4
|
|
|||
Gains on sales of depreciable operating properties
|
(109,950
|
)
|
|
—
|
|
|
(109,950
|
)
|
|
100.0
|
|
|||
Net Operating Income, as defined
|
$
|
422,033
|
|
|
$
|
372,881
|
|
|
$
|
49,152
|
|
|
13.2
|
%
|
(1)
|
The Company adopted ASU 2014-08 effective January 1, 2015 (see Note 2 “Basis of Presentation and Significant Accounting Policies” to our consolidated financial statements included in this report for additional information). As a result, results of operations for properties classified as held for sale and/or disposed of subsequent to January 1, 2015 are presented in continuing operations. Prior to January 1, 2015, properties classified as held for sale and/or disposed of are presented in discontinued operations.
|
|
Year Ended December 31,
|
||||||||||||||||||||||||||||||||||||||
|
2015
|
|
2014
|
||||||||||||||||||||||||||||||||||||
|
Same
Store
|
|
Stabilized Develop-ment & Redevel-opment
|
|
2014 Acquisitions
|
|
2015 Held for Sale Dispositi-ons & Other
|
|
Total
|
|
Same
Store
|
|
Stabilized Develop-ment & Redevel-opment
|
|
2014 Acquisitions
|
|
2015 Held for Sale Dispositi-ons & Other
|
|
Total
|
||||||||||||||||||||
|
(in thousands)
|
|
(in thousands)
|
||||||||||||||||||||||||||||||||||||
Operating revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Rental income
|
$
|
411,089
|
|
|
$
|
73,949
|
|
|
$
|
15,621
|
|
|
$
|
24,696
|
|
|
$
|
525,355
|
|
|
$
|
392,567
|
|
|
$
|
31,625
|
|
|
$
|
7,153
|
|
|
$
|
34,983
|
|
|
$
|
466,328
|
|
Tenant reimbursements
|
37,144
|
|
|
9,827
|
|
|
2,566
|
|
|
4,237
|
|
|
53,774
|
|
|
38,673
|
|
|
1,850
|
|
|
593
|
|
|
5,601
|
|
|
46,717
|
|
||||||||||
Other property income
|
2,021
|
|
|
112
|
|
|
—
|
|
|
13
|
|
|
2,146
|
|
|
8,498
|
|
|
2
|
|
|
—
|
|
|
180
|
|
|
8,680
|
|
||||||||||
Total
|
450,254
|
|
|
83,888
|
|
|
18,187
|
|
|
28,946
|
|
|
581,275
|
|
|
439,738
|
|
|
33,477
|
|
|
7,746
|
|
|
40,764
|
|
|
521,725
|
|
||||||||||
Property and related expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Property expenses
|
93,868
|
|
|
6,049
|
|
|
1,054
|
|
|
4,407
|
|
|
105,378
|
|
|
91,526
|
|
|
3,529
|
|
|
289
|
|
|
5,170
|
|
|
100,514
|
|
||||||||||
Real estate taxes
|
35,851
|
|
|
9,546
|
|
|
1,328
|
|
|
3,498
|
|
|
50,223
|
|
|
36,516
|
|
|
3,569
|
|
|
336
|
|
|
4,776
|
|
|
45,197
|
|
||||||||||
Provision for bad debts
|
695
|
|
|
(98
|
)
|
|
—
|
|
|
(52
|
)
|
|
545
|
|
|
(103
|
)
|
|
98
|
|
|
—
|
|
|
63
|
|
|
58
|
|
||||||||||
Ground leases
|
3,096
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,096
|
|
|
3,075
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,075
|
|
||||||||||
Total
|
133,510
|
|
|
15,497
|
|
|
2,382
|
|
|
7,853
|
|
|
159,242
|
|
|
131,014
|
|
|
7,196
|
|
|
625
|
|
|
10,009
|
|
|
148,844
|
|
||||||||||
Net Operating Income, as defined
|
$
|
316,744
|
|
|
$
|
68,391
|
|
|
$
|
15,805
|
|
|
$
|
21,093
|
|
|
$
|
422,033
|
|
|
$
|
308,724
|
|
|
$
|
26,281
|
|
|
$
|
7,121
|
|
|
$
|
30,755
|
|
|
$
|
372,881
|
|
|
Year Ended December 31, 2015 as compared to the Year Ended December 31, 2014
|
|||||||||||||||||||||||||||||||||
|
Same Store
|
|
Stabilized Development & Redevelopment
|
|
2014 Acquisitions
|
|
2015 Held for Sale, Dispositions & Other
|
|
Total
|
|||||||||||||||||||||||||
|
Dollar Change
|
|
Percent Change
|
|
Dollar Change
|
|
Percent Change
|
|
Dollar Change
|
|
Percent Change
|
|
Dollar Change
|
|
Percent Change
|
|
Dollar Change
|
|
Percent Change
|
|||||||||||||||
|
($ in thousands)
|
|||||||||||||||||||||||||||||||||
Operating revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Rental income
|
$
|
18,522
|
|
|
4.7
|
%
|
|
$
|
42,324
|
|
|
133.8
|
%
|
|
$
|
8,468
|
|
|
118.4
|
%
|
|
$
|
(10,287
|
)
|
|
(29.4
|
)%
|
|
$
|
59,027
|
|
|
12.7
|
%
|
Tenant reimbursements
|
(1,529
|
)
|
|
(4.0
|
)
|
|
7,977
|
|
|
431.2
|
|
|
1,973
|
|
|
332.7
|
|
|
(1,364
|
)
|
|
(24.4
|
)
|
|
7,057
|
|
|
15.1
|
|
|||||
Other property income
|
(6,477
|
)
|
|
(76.2
|
)
|
|
110
|
|
|
5,500.0
|
|
|
—
|
|
|
—
|
|
|
(167
|
)
|
|
(92.8
|
)
|
|
(6,534
|
)
|
|
(75.3
|
)
|
|||||
Total
|
10,516
|
|
|
2.4
|
|
|
50,411
|
|
|
150.6
|
|
|
10,441
|
|
|
134.8
|
|
|
(11,818
|
)
|
|
(29.0
|
)
|
|
59,550
|
|
|
11.4
|
|
|||||
Property and related expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Property expenses
|
2,342
|
|
|
2.6
|
|
|
2,520
|
|
|
71.4
|
|
|
765
|
|
|
264.7
|
|
|
(763
|
)
|
|
(14.8
|
)
|
|
4,864
|
|
|
4.8
|
|
|||||
Real estate taxes
|
(665
|
)
|
|
(1.8
|
)
|
|
5,977
|
|
|
167.5
|
|
|
992
|
|
|
295.2
|
|
|
(1,278
|
)
|
|
(26.8
|
)
|
|
5,026
|
|
|
11.1
|
|
|||||
Provision for bad debts
|
798
|
|
|
(774.8
|
)
|
|
(196
|
)
|
|
(200.0
|
)
|
|
—
|
|
|
—
|
|
|
(115
|
)
|
|
(182.5
|
)
|
|
487
|
|
|
839.7
|
|
|||||
Ground leases
|
21
|
|
|
0.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21
|
|
|
0.7
|
|
|||||
Total
|
2,496
|
|
|
1.9
|
|
|
8,301
|
|
|
115.4
|
|
|
1,757
|
|
|
281.1
|
|
|
(2,156
|
)
|
|
(21.5
|
)
|
|
10,398
|
|
|
7.0
|
|
|||||
Net Operating Income,
as defined
|
$
|
8,020
|
|
|
2.6
|
%
|
|
$
|
42,110
|
|
|
160.2
|
%
|
|
$
|
8,684
|
|
|
121.9
|
%
|
|
$
|
(9,662
|
)
|
|
(31.4
|
)%
|
|
$
|
49,152
|
|
|
13.2
|
%
|
•
|
An increase of
$42.1 million
attributable to the Stabilized Development and Redevelopment Properties primarily due to the following:
|
•
|
$6.3 million increase from the properties completed and/or stabilized in the fourth quarter of 2015;
|
•
|
$13.8 million increase from the properties completed and/or stabilized in the fourth quarter of 2014;
|
•
|
$18.6 million increase from the properties completed and/or stabilized in the third quarter of 2014; and
|
•
|
$3.4 million increase from the properties completed and/or stabilized in the first quarter of 2014;
|
•
|
An increase of
$8.0 million
attributable to the Same Store Properties primarily resulting from:
|
•
|
An increase in rental income of
$18.5 million
primarily due to the following:
|
◦
|
$16.7 million increase due to new leases at higher rates and increased occupancy;
|
◦
|
$1.0 million increase due to amortization of tenant funded improvements revenue; and
|
◦
|
$1.0 million increase in parking income resulting from increased occupancy and rates at certain of our buildings;
|
•
|
A partially offsetting decrease in tenant reimbursements of
$1.5 million
primarily due to base year resets for a number of tenants across the portfolio;
|
•
|
A partially offsetting decrease in other property income of
$6.5 million
due to $6.8 million of lease termination fees, primarily related to one tenant, that were recognized during the year ended December 31, 2014; and
|
•
|
A partially offsetting increase in property and related expenses of
$2.5 million
primarily resulting from:
|
•
|
An increase of
$2.3 million
in property expenses primarily resulting from:
|
◦
|
$3.3 million increase in certain recurring operating costs related to security, parking, other contract services, repairs and maintenance, and various other reimbursable expenses;
|
◦
|
A partially offsetting decrease of $1.0 million due to a property damage settlement received in 2015 and lower non-recurring legal fees in 2015; and
|
•
|
An increase of
$0.8 million
in provision for bad debts primarily related to two tenants;
|
•
|
A partially offsetting net decrease of
$0.7 million
in real estate taxes primarily due to property tax refunds related to successful assessment reductions net of customary annual property tax increases at other properties; and
|
•
|
An increase of
$8.7 million
attributable to the 2014 Acquisition Properties.
|
•
|
An increase of $3.3 million in compensation related expense primarily related to the growth of the Company; partially offset by
|
•
|
A decrease of $1.2 million primarily related to a decrease in professional services fees.
|
|
Year Ended December 31,
|
|
Dollar
Change
|
|
Percentage
Change
|
|||||||||
|
2015
|
|
2014
|
|
|
|||||||||
|
($ in thousands)
|
|||||||||||||
Gross interest expense
|
$
|
109,647
|
|
|
$
|
114,661
|
|
|
$
|
(5,014
|
)
|
|
(4.4
|
)%
|
Capitalized interest
|
(51,965
|
)
|
|
(47,090
|
)
|
|
(4,875
|
)
|
|
10.4
|
|
|||
Interest expense
|
$
|
57,682
|
|
|
$
|
67,571
|
|
|
$
|
(9,889
|
)
|
|
(14.6
|
)%
|
•
|
95% of the Operating Partnership’s consolidated funds from operations (as defined in the agreements governing the unsecured revolving credit facility, unsecured term loan facility and unsecured term loan) for such year; and
|
•
|
an amount which results in distributions to us (excluding any preferred partnership distributions to the extent the same have been deducted from consolidated funds from operations (as so defined) for such year) in an amount sufficient to permit us to pay dividends to our stockholders that we reasonably believe are necessary to (a) maintain our qualification as a REIT for federal and state income tax purposes and (b) avoid the payment of federal or state income or excise tax.
|
|
Shares/Units at
December 31, 2016
|
|
Aggregate
Principal
Amount or
$ Value
Equivalent
|
|
% of Total
Market
Capitalization
|
||||
|
($ in thousands)
|
||||||||
Debt:
(1) (2) (3)
|
|
|
|
|
|
||||
Unsecured Term Loan Facility
|
|
|
$
|
150,000
|
|
|
1.6
|
%
|
|
Unsecured Term Loan
|
|
|
39,000
|
|
|
0.4
|
|
||
Unsecured Senior Notes due 2018
|
|
|
325,000
|
|
|
3.5
|
|
||
Unsecured Senior Notes due 2020
|
|
|
250,000
|
|
|
2.6
|
|
||
Unsecured Senior Notes due 2023
|
|
|
300,000
|
|
|
3.1
|
|
||
Unsecured Senior Notes due 2025
|
|
|
400,000
|
|
|
4.2
|
|
||
Unsecured Senior Notes due 2029
|
|
|
400,000
|
|
|
4.2
|
|
||
Secured debt
(4)
|
|
|
469,766
|
|
|
4.9
|
|
||
Total debt
|
|
|
2,333,766
|
|
|
24.5
|
|
||
Equity and Noncontrolling Interests in the Operating Partnership:
(5)
|
|
|
|
|
|
||||
6.875% Series G Cumulative Redeemable Preferred stock
(6)
|
4,000,000
|
|
|
100,000
|
|
|
1.0
|
|
|
6.375% Series H Cumulative Redeemable Preferred stock
(6)
|
4,000,000
|
|
|
100,000
|
|
|
1.0
|
|
|
Common limited partnership units outstanding
(7)
|
2,381,543
|
|
|
174,377
|
|
|
1.9
|
|
|
Shares of common stock outstanding
(7)
|
93,219,439
|
|
|
6,825,527
|
|
|
71.6
|
|
|
Total Equity and Noncontrolling Interests in the Operating Partnership
|
|
|
7,199,904
|
|
|
75.5
|
|
||
Total Market Capitalization
|
|
|
$
|
9,533,670
|
|
|
100.0
|
%
|
(1)
|
In September, the Company completed a private placement of
$175.0 million
of ten-year,
3.35%
unsecured senior notes and
$75.0 million
of twelve-year,
3.45%
unsecured senior notes with a delayed draw option required to be exercised by February 17, 2017. The table above does not reflect any amounts pertaining to these notes because there were no amounts drawn or outstanding as of
December 31, 2016
.
|
(2)
|
There was no outstanding balance on the unsecured line of credit as of
December 31, 2016
.
|
(3)
|
Represents gross aggregate principal amount due at maturity before the effect of the following at
December 31, 2016
:
$11.5 million
of unamortized deferred financing costs,
$6.6 million
of unamortized discounts for the unsecured senior notes and
$4.4 million
of unamortized premiums for the secured debt.
|
(4)
|
In November 2016, the Company entered into a $170.0 million, 10-year mortgage note due in December 2026 with a fixed interest rate of 3.57%.
|
(5)
|
Value based on $25.00 per share liquidation preference.
|
(6)
|
Represents common units not owned by the Company.
|
(7)
|
Value based on closing price per share of our common stock of
$73.22
as of
December 31, 2016
.
|
•
|
Net cash flow from operations;
|
•
|
Borrowings under the Operating Partnership’s unsecured revolving credit facility, term loan facility and unsecured senior notes;
|
•
|
Proceeds from our capital recycling program, including the disposition of nonstrategic assets and the formation of strategic ventures;
|
•
|
Proceeds from additional secured or unsecured debt financings; and
|
•
|
Proceeds from public or private issuance of debt or equity securities.
|
•
|
Development and redevelopment costs;
|
•
|
Operating property or undeveloped land acquisitions;
|
•
|
Property operating and corporate expenses;
|
•
|
Capital expenditures, tenant improvement and leasing costs;
|
•
|
Debt service and principal payments, including debt maturities;
|
•
|
Distributions to common and preferred security holders;
|
•
|
Repurchases and redemptions of outstanding common or preferred stock of the Company; and
|
•
|
Outstanding debt repurchases, redemptions and repayments.
|
•
|
During
2016
, we generated approximately $783.6 million in cash from our capital recycling program including non-strategic property and land dispositions and two strategic ventures with a third party:
|
◦
|
During the
year
ended
December 31, 2016
, we completed the sale of
six
office buildings and five undeveloped land parcels to unaffiliated third parties for gross sales proceeds totaling approximately
$330.7 million
. In addition, in January 2017 we completed the sale of the operating property that was held for sale at
December 31, 2016
for total gross proceeds of
$12.1 million
.
|
◦
|
During the second half of 2016, we completed two strategic ventures with NBREM whereby NBREM contributed a total of
$452.9 million
for a
44%
common equity interest in
two
existing previously
|
•
|
In 2016, we raised more than $450.0 million in new debt and common equity from the following transactions:
|
◦
|
In November 2016, the Operating Partnership entered into a ten-year, non-recourse mortgage note for
$170.0 million
. The mortgage note bears interest at a fixed rate of
3.57%
and matures on December 1, 2026. A portion of the proceeds from this note were used to repay a a total of $64.4 million of secured debt at par.
|
◦
|
During
2016
, we issued and sold a total of
451,398
shares of our common stock under our at-the-market stock offering program at a weighted average price of
$71.50
per share before selling commissions. The net offering proceeds (after deducting selling commissions) were approximately
$31.9 million
(see “—Liquidity Sources” below for additional information).
|
◦
|
In September 2016, the Operating Partnership completed a private placement of
$175.0 million
of ten-year,
3.35%
unsecured senior notes and
$75.0 million
of twelve-year,
3.45%
unsecured senior notes with a delayed draw option required to be exercised by February 17, 2017. No amounts were drawn or outstanding as of
December 31, 2016
.
|
•
|
In March 2016, the Company repurchased
52,199
shares of common stock at a weighted average price of
$55.45
per share for $2.9 million. Simultaneously, the Operating Partnership repurchased
52,199
common units from the Company.
|
•
|
Subsequent to
December 31, 2016
, we had the following equity related transactions:
|
◦
|
In January 2017, we raised approximately
$308.8 million
of net proceeds through a public offering of
4,427,500
shares of common stock.
|
◦
|
On January 13, 2017, the Company and the Operating Partnership paid a special cash dividend and distribution, as applicable, of $1.90 per share of common stock and common unit, as applicable, to stockholders and unitholders, as applicable, of record on December 30, 2016. This special cash dividend was in addition to the regular quarterly cash dividend of $0.375 per share of common stock. The total amount of the regular quarterly cash dividend and the special cash dividend was approximately $35.9 million and $181.6 million, respectively.
|
|
December 31, 2016
|
|
December 31, 2015
|
||||
|
(in thousands)
|
||||||
Outstanding borrowings
|
$
|
—
|
|
|
$
|
—
|
|
Remaining borrowing capacity
|
600,000
|
|
|
600,000
|
|
||
Total borrowing capacity
(1)
|
$
|
600,000
|
|
|
$
|
600,000
|
|
Interest rate
(2)
|
1.82
|
%
|
|
1.48
|
%
|
||
Facility fee-annual rate
(3)
|
0.200%
|
||||||
Maturity date
|
July 2019
|
(1)
|
We may elect to borrow, subject to bank approval and obtaining commitments for any additional borrowing capacity, up to an additional
$311.0 million
under an accordion feature under the terms of the unsecured revolving credit facility and unsecured term loan facility.
|
(2)
|
Our unsecured revolving credit facility interest rate was calculated based on an annual rate of LIBOR plus
1.050%
.
|
(3)
|
Our facility fee is paid on a quarterly basis and is calculated based on the total borrowing capacity. In addition to the facility fee, we incurred debt origination and legal costs. As of
December 31, 2016
and
2015
,
$3.3 million
and
$4.6 million
of deferred financing costs remained to be amortized through the amended maturity date of our unsecured revolving credit facility, which are included in prepaid expenses and other assets, net on our consolidated balance sheets.
|
|
Year Ended December 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(in millions, except share and per share data)
|
||||||
Shares of common stock sold during the year
|
451,398
|
|
|
1,866,267
|
|
||
Weighted average price per share of common stock
|
$
|
71.50
|
|
|
$
|
75.06
|
|
Aggregate gross proceeds
|
$
|
32.3
|
|
|
$
|
140.1
|
|
Aggregate net proceeds after selling commissions
|
$
|
31.9
|
|
|
$
|
138.2
|
|
|
Aggregate Principal
Amount Outstanding
(1)(2)
|
||
|
(in thousands)
|
||
Unsecured Term Loan Facility
|
$
|
150,000
|
|
Unsecured Term Loan
|
39,000
|
|
|
Unsecured Senior Notes due 2018
|
325,000
|
|
|
Unsecured Senior Notes due 2020
|
250,000
|
|
|
Unsecured Senior Notes due 2023
|
300,000
|
|
|
Unsecured Senior Notes due 2025
|
400,000
|
|
|
Unsecured Senior Notes due 2029
|
400,000
|
|
|
Secured Debt
|
469,766
|
|
|
Total Unsecured and Secured Debt
|
2,333,766
|
|
|
Less: Unamortized Net Discounts and Deferred Financing Costs
|
(13,643
|
)
|
|
Total Debt, Net
|
$
|
2,320,123
|
|
(1)
|
In September, the Company completed a private placement of
$175.0 million
of ten-year,
3.35%
unsecured senior notes and
$75.0 million
of twelve-year,
3.45%
unsecured senior notes with a delayed draw option required to be exercised by February 17, 2017. The table above does not reflect any amounts pertaining to these notes because there were no amounts drawn or outstanding as of
December 31, 2016
.
|
(2)
|
There was no outstanding balance on the unsecured line of credit as of
December 31, 2016
.
|
|
Percentage of Total Debt
(1)
|
|
Weighted Average Interest Rate
(1) (2)
|
||||||||
|
December 31, 2016
|
|
December 31, 2015
|
|
December 31, 2016
|
|
December 31, 2015
|
||||
Secured vs. unsecured:
|
|
|
|
|
|
|
|
||||
Unsecured
(3)
|
79.9
|
%
|
|
83.2
|
%
|
|
4.4
|
%
|
|
4.3
|
%
|
Secured
|
20.1
|
|
|
16.8
|
|
|
4.4
|
%
|
|
5.1
|
%
|
Variable-rate vs. fixed-rate:
|
|
|
|
|
|
|
|
||||
Variable-rate
|
8.1
|
|
|
8.4
|
|
|
1.8
|
%
|
|
1.4
|
%
|
Fixed-rate
(3)
|
91.9
|
|
|
91.6
|
|
|
4.6
|
%
|
|
4.7
|
%
|
Stated rate
(3)
|
|
|
|
|
4.4
|
%
|
|
4.5
|
%
|
||
GAAP effective rate
(4)
|
|
|
|
|
4.3
|
%
|
|
4.4
|
%
|
||
GAAP effective rate including debt issuance costs
|
|
|
|
|
4.5
|
%
|
|
4.6
|
%
|
(1)
|
In September, the Company completed a private placement of
$175.0 million
of ten-year,
3.35%
unsecured senior notes and
$75.0 million
of twelve-year,
3.45%
unsecured senior notes with a delayed draw option required to be exercised by February 17, 2017. The table above does not reflect any amounts pertaining to these notes because there were no amounts drawn or outstanding as of
December 31, 2016
. The table above also does not reflect any amounts pertaining to the unsecured line of credit as there were no amounts outstanding as of
December 31, 2016
.
|
(2)
|
As of the end of the period presented.
|
(3)
|
Excludes the impact of the amortization of any debt discounts/premiums and deferred financing costs.
|
|
Payment Due by Period
|
|
|
||||||||||||||||
|
Less than
1 Year
(2017)
|
|
2-3 Years
(2018-2019)
|
|
4-5 Years
(2020-2021)
|
|
More than
5 Years
(After 2021)
|
|
Total
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Principal payments: secured debt
(1)
|
$
|
7,286
|
|
|
$
|
202,978
|
|
|
$
|
10,479
|
|
|
$
|
249,023
|
|
|
$
|
469,766
|
|
Principal payments: unsecured debt
(2)
|
—
|
|
|
514,000
|
|
|
250,000
|
|
|
1,350,000
|
|
|
2,114,000
|
|
|||||
Interest payments: fixed-rate debt
(3)
|
105,663
|
|
|
177,455
|
|
|
135,337
|
|
|
302,302
|
|
|
720,757
|
|
|||||
Interest payments: variable-rate debt
(4)
|
3,495
|
|
|
5,228
|
|
|
—
|
|
|
—
|
|
|
8,723
|
|
|||||
Ground lease obligations
(5)
|
4,934
|
|
|
9,868
|
|
|
9,868
|
|
|
231,402
|
|
|
256,072
|
|
|||||
Lease and other contractual commitments
(6)
|
69,452
|
|
|
10,029
|
|
|
—
|
|
|
148
|
|
|
79,629
|
|
|||||
Development commitments
(7)
|
262,000
|
|
|
197,000
|
|
|
—
|
|
|
—
|
|
|
459,000
|
|
|||||
Total
|
$
|
452,830
|
|
|
$
|
1,116,558
|
|
|
$
|
405,684
|
|
|
$
|
2,132,875
|
|
|
$
|
4,107,947
|
|
(1)
|
Represents gross aggregate principal amount before the effect of the unamortized premium and deferred financing costs of approximately
$4.4 million
and
$1.4 million
as of
December 31, 2016
.
|
(2)
|
Represents gross aggregate principal amount before the effect of the unamortized discount and deferred financing costs of approximately
$6.6 million
and
$10.1 million
as of
December 31, 2016
. Includes
$175.0 million
of Series A Notes and
$75.0 million
of Series B Notes issuable pursuant to the Note Purchase Agreement for which no Series A or B Notes were issued and outstanding as of
December 31, 2016
but the Company is committed to issuing by February 17, 2017.
|
(3)
|
As of
December 31, 2016
,
91.9%
of our debt was contractually fixed. The information in the table above reflects our projected interest rate obligations for these fixed-rate payments based on the contractual interest rates on an accrual basis and scheduled maturity dates. Amounts include interest rate obligations for the Series A and B Notes issuable pursuant to the Note Purchase Agreement for which no Series A or B Notes were issued and outstanding as of
December 31, 2016
but the Company is committed to issuing by February 17, 2017.
|
(4)
|
As of
December 31, 2016
,
8.1%
of our debt bore interest at variable rates which was incurred under the unsecured term loan facility and unsecured term loan. The variable interest rate payments are based on LIBOR plus a spread of
1.150%
as of
December 31, 2016
. The information in the table above reflects our projected interest rate obligations for these variable-rate payments based on outstanding principal balances as of
December 31, 2016
, the scheduled interest payment dates and the contractual maturity dates.
|
(5)
|
Reflects minimum lease payments through the contractual lease expiration date before the impact of extension options. See Note 18 “Commitment and Contingencies” to our consolidated financial statements included in this report for further information.
|
(6)
|
Amounts represent commitments under signed leases and contracts for operating properties, excluding tenant-funded tenant improvements, and for other contractual commitments. The timing of these expenditures may fluctuate.
|
(7)
|
Amounts represent commitments under signed leases for pre-leased development projects and contractual commitments for projects under construction, as of
December 31, 2016
, and also includes $45.0 million for three recently completed office projects, the project in “lease-up” and the completed residential project. The timing of these expenditures may fluctuate based on the ultimate progress of construction. We may start additional construction in
2017
(see “—Development Activities” for additional information).
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Office Properties:
(1)
|
|
|
|
|
|
||||||
Capital Expenditures:
|
|
|
|
|
|
||||||
Capital expenditures per square foot
|
$
|
1.58
|
|
|
$
|
1.23
|
|
|
$
|
0.84
|
|
Tenant Improvement and Leasing Costs
(2)
|
|
|
|
|
|
||||||
Replacement tenant square feet
(3)
|
583,461
|
|
|
797,560
|
|
|
741,573
|
|
|||
Tenant improvements per square foot commenced
|
$
|
40.98
|
|
|
$
|
42.25
|
|
|
$
|
39.06
|
|
Leasing commissions per square foot commenced
|
$
|
14.30
|
|
|
$
|
14.53
|
|
|
$
|
11.42
|
|
Total per square foot
|
$
|
55.28
|
|
|
$
|
56.78
|
|
|
$
|
50.48
|
|
Renewal tenant square feet
|
476,011
|
|
|
627,783
|
|
|
1,333,231
|
|
|||
Tenant improvements per square foot commenced
|
$
|
10.66
|
|
|
$
|
18.44
|
|
|
$
|
14.23
|
|
Leasing commissions per square foot commenced
|
$
|
7.90
|
|
|
$
|
9.36
|
|
|
$
|
9.71
|
|
Total per square foot
|
$
|
18.56
|
|
|
$
|
27.80
|
|
|
$
|
23.94
|
|
Total per square foot per year
|
$
|
7.05
|
|
|
$
|
7.34
|
|
|
$
|
5.81
|
|
Average remaining lease term (in years)
|
5.5
|
|
|
6.0
|
|
|
5.8
|
|
(1)
|
Excludes development properties.
|
(2)
|
Includes tenants with lease terms of 12 months or longer. Excludes leases for month-to-month and first generation tenants.
|
(3)
|
Excludes leases for which the space was vacant for longer than one year, or vacant when the property was acquired by the Company.
|
•
|
Decreases in our cash flows from operations, which could create further dependence on the unsecured revolving credit facility;
|
•
|
An increase in the proportion of variable-rate debt, which could increase our sensitivity to interest rate fluctuations in the future; and
|
•
|
A decrease in the value of our properties, which could have an adverse effect on the Operating Partnership’s ability to incur additional debt, refinance existing debt at competitive rates, or comply with its existing debt obligations.
|
Unsecured Credit Facility, Unsecured Term Loan Facility and Unsecured Term Loan (as defined in the applicable Credit Agreements):
|
|
Covenant Level
|
|
Actual Performance
as of December 31, 2016
|
Total debt to total asset value
|
|
less than 60%
|
|
26%
|
Fixed charge coverage ratio
|
|
greater than 1.5x
|
|
3.30x
|
Unsecured debt ratio
|
|
greater than 1.67x
|
|
3.70x
|
Unencumbered asset pool debt service coverage
|
|
greater than 1.75x
|
|
4.18x
|
|
|
|
|
|
Unsecured Senior Notes due 2018, 2020, 2023, 2025 and 2029
(as defined in the applicable Indentures):
|
|
|
|
|
Total debt to total asset value
|
|
less than 60%
|
|
32%
|
Interest coverage
|
|
greater than 1.5x
|
|
7.8x
|
Secured debt to total asset value
|
|
less than 40%
|
|
6%
|
Unencumbered asset pool value to unsecured debt
|
|
greater than 150%
|
|
333%
|
|
Year Ended December 31,
|
|
|
|
|
|||||||||
|
2016
|
|
2015
|
|
Dollar
Change
|
|
Percentage
Change
|
|||||||
|
($ in thousands)
|
|||||||||||||
Net cash provided by operating activities
|
$
|
345,054
|
|
|
$
|
272,008
|
|
|
$
|
73,046
|
|
|
26.9
|
%
|
Net cash used in investing activities
|
(635,435
|
)
|
|
(262,752
|
)
|
|
(372,683
|
)
|
|
141.8
|
%
|
|||
Net cash provided by financing activities
|
427,291
|
|
|
23,471
|
|
|
403,820
|
|
|
1,720.5
|
%
|
|||
Net increase in cash and cash equivalents
|
$
|
136,910
|
|
|
$
|
32,727
|
|
|
$
|
104,183
|
|
|
318.3
|
%
|
|
Year ended December 31,
|
||||||||||||||||||
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Net income available to common stockholders
|
$
|
280,538
|
|
|
$
|
220,831
|
|
|
$
|
166,969
|
|
|
$
|
30,630
|
|
|
$
|
249,826
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income attributable to noncontrolling common units of the Operating Partnership
|
6,635
|
|
|
4,339
|
|
|
3,589
|
|
|
685
|
|
|
6,187
|
|
|||||
Net income attributable to noncontrolling interests in consolidated property partnerships
|
3,375
|
|
|
184
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Depreciation and amortization of real estate assets
|
213,156
|
|
|
201,480
|
|
|
202,108
|
|
|
199,558
|
|
|
168,687
|
|
|||||
Gains on sales of depreciable real estate
|
(164,302
|
)
|
|
(109,950
|
)
|
|
(121,922
|
)
|
|
(12,252
|
)
|
|
(259,245
|
)
|
|||||
Funds From Operations attributable to noncontrolling interests in consolidated property partnerships
|
(5,660
|
)
|
|
(272
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Funds From Operations
(1) (2)
|
$
|
333,742
|
|
|
$
|
316,612
|
|
|
$
|
250,744
|
|
|
$
|
218,621
|
|
|
$
|
165,455
|
|
(1)
|
Reported amounts are attributable to common stockholders, common unitholders and restricted stock unitholders.
|
(2)
|
FFO available to common stockholders and unitholders includes amortization of deferred revenue related to tenant-funded tenant improvements of
$13.2 million
,
$13.3 million
,
$11.0 million
,
$10.7 million
and
$9.1 million
for the years ended
December 31, 2016
,
2015
,
2014
,
2013
and
2012
, respectively.
|
|
Year Ended December 31,
|
|||||||||||||
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|||||
Weighted average shares of common stock outstanding
|
92,342,483
|
|
|
89,854,096
|
|
|
83,090,235
|
|
|
77,343,853
|
|
|
69,639,623
|
|
Weighted average common units outstanding
|
2,429,205
|
|
|
1,791,482
|
|
|
1,804,263
|
|
|
1,822,407
|
|
|
1,763,635
|
|
Effect of participating securities – nonvested shares and restricted stock units
|
1,139,669
|
|
|
1,170,571
|
|
|
1,228,807
|
|
|
1,224,208
|
|
|
1,127,534
|
|
Total basic weighted average shares / units outstanding
|
95,911,357
|
|
|
92,816,149
|
|
|
86,123,305
|
|
|
80,390,468
|
|
|
72,530,792
|
|
Effect of dilutive securities – Exchangeable Notes, stock options and contingently issuable shares
|
680,551
|
|
|
541,679
|
|
|
1,877,485
|
|
|
1,765,025
|
|
|
1,123,482
|
|
Total diluted weighted average shares / units outstanding
|
96,591,908
|
|
|
93,357,828
|
|
|
88,000,790
|
|
|
82,155,493
|
|
|
73,654,274
|
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
ITEM 9A.
|
CONTROLS AND PROCEDURES
|
ITEM 9B.
|
OTHER INFORMATION
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
ITEM 11.
|
EXECUTIVE COMPENSATION
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
ITEM 14.
|
PRINCIPAL ACCOUNTANT FEES AND SERVICES
|
ITEM 15.
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
Exhibit
Number
|
|
Description
|
3.(i)1
|
|
Kilroy Realty Corporation Articles of Restatement (previously filed by Kilroy Realty Corporation as an exhibit on Form 10-Q for the quarter ended June 30, 2012)
|
3.(i)2
|
|
Certificate of Limited Partnership of Kilroy Realty, L.P. (previously filed by Kilroy Realty, L.P., as an exhibit to the General Form for Registration of Securities on Form 10 as filed with the Securities and Exchange Commission on August 18, 2010)
|
3.(i)3
|
|
Amendment to the Certificate of Limited Partnership of Kilroy Realty, L.P. (previously filed by Kilroy Realty, L.P., as an exhibit to the General Form for Registration of Securities on Form 10 as filed with the Securities and Exchange Commission on August 18, 2010)
|
3.(i)4
|
|
Articles Supplementary designating Kilroy Realty Corporation’s 6.875% Series G Cumulative Redeemable Preferred Stock (previously filed by Kilroy Realty Corporation on Form 8-A as filed with the Securities and Exchange Commission on March 22, 2012)
|
3.(i)5
|
|
Articles Supplementary designating Kilroy Realty Corporation’s 6.375% Series H Cumulative Redeemable Preferred Stock (previously filed by Kilroy Realty Corporation on Form 8-A as filed with the Securities and Exchange Commission on August 10, 2012)
|
3.(ii)1
|
|
Fifth Amended and Restated Bylaws of Kilroy Realty Corporation (previously filed by Kilroy Realty Corporation as an exhibit on Form 8-K as filed with the Securities and Exchange Commission on February 1, 2017)
|
Exhibit
Number
|
|
Description
|
3.(ii)2
|
|
Seventh Amended and Restated Agreement of Limited Partnership of Kilroy Realty, L.P. dated August 15, 2012, as amended (previously filed by Kilroy Realty Corporation on Form 10-Q for the quarter ended June 30, 2014)
|
4.1
|
|
Kilroy Realty Corporation Form of Certificate for Common Stock (previously filed by Kilroy Realty Corporation as an exhibit to the Registration Statement on Amendment No. 3 to Form S-11 (No. 333-15553))
|
4.2
|
|
Specimen Certificate for Kilroy Realty Corporation’s 6.875% Series G Cumulative Redeemable Preferred Stock (previously filed by Kilroy Realty Corporation on Form 8-A as filed with the Securities and Exchange Commission on March 22, 2012)
|
4.3
|
|
Specimen Certificate for Kilroy Realty Corporation’s 6.375% Series H Cumulative Redeemable Preferred Stock (previously filed by Kilroy Realty Corporation on Form 8-A as filed with the Securities and Exchange Commission on August 10, 2012)
|
4.4
|
|
Registration Rights Agreement, dated January 31, 1997 (previously filed by Kilroy Realty Corporation as an exhibit to the Registration Statement on Amendment No. 3 to Form S-11 (No. 333-15553))
|
4.5
|
|
Form of Certificate for Partnership Units of Kilroy Realty, L.P. (previously filed by Kilroy Realty, L.P., as an exhibit to the General Form for Registration of Securities on Form 10 as filed with the Securities and Exchange Commission on August 18, 2010)
|
4.6
|
|
Indenture, dated May 24, 2010, among Kilroy Realty, L.P., as issuer, Kilroy Realty Corporation, as guarantor, and U.S. Bank National Association, as trustee, including the form of 6.625% Senior Notes due 2020 and the form of the related guarantee (previously filed by Kilroy Realty Corporation as an exhibit on Form 8-K as filed with the Securities and Exchange Commission on May 25, 2010)
|
4.7
|
|
Officers’ Certificate pursuant to Sections 101, 201, 301 and 303 of the Indenture dated March 1, 2011, among Kilroy Realty, L.P., as issuer, Kilroy Realty Corporation, as guarantor, and U.S. Bank National Association, as trustee, establishing a series of securities entitled “4.800% Notes due 2018,” including the form of 4.800% Notes due 2018 and the form of related guarantee (previously filed by Kilroy Realty Corporation and Kilroy Realty, L.P. as an exhibit on Form 8-K as filed with the Securities and Exchange Commission on July 6, 2011)
|
4.8
|
|
Registration Rights Agreement, dated July 31, 2012 (previously filed by Kilroy Realty Corporation as an exhibit on Form 10-Q for the quarter ended June 30, 2012)
|
4.9
|
|
Officers’ Certificate pursuant to Sections 101, 201, 301 and 303 of the Indenture dated March 1, 2011, among Kilroy Realty, L.P., as issuer, Kilroy Realty Corporation, as guarantor, and U.S. Bank National Association, as trustee, establishing a series of securities entitled “3.800% Notes due 2023,” including the form of 3.800% Notes due 2023 and the form of related guarantee (previously filed by Kilroy Realty Corporation and Kilroy Realty, L.P. as an exhibit on Form 8-K as filed with the Securities and Exchange Commission on January 14, 2013)
|
4.10
|
|
Indenture, dated March 1, 2011, by and among Kilroy Realty, L.P., as issuer, Kilroy Realty Corporation, as guarantor, and U.S. Bank National Association, as trustee (previously filed by Kilroy Realty Corporation and Kilroy Realty, L.P. as an exhibit to the Registration Statement on Form S-3 as filed with the Securities and Exchange Commission on October 2, 2013)
|
4.11
|
|
Supplemental Indenture, dated July 5, 2011, among Kilroy Realty, L.P., as issuer, Kilroy Realty Corporation, as guarantor, and U.S. Bank National Association, as trustee (previously filed by Kilroy Realty Corporation and Kilroy Realty, L.P. as an exhibit to the Registration Statement on Form S-3 as filed with the Securities and Exchange Commission on October 2, 2013)
|
4.12
|
|
Officers’ Certificate pursuant to Sections 102, 201, 301 and 303 of the Indenture dated March 1, 2011, among Kilroy Realty, L.P., as issuer, Kilroy Realty Corporation, as guarantor, and U.S. Bank National Association, as trustee, establishing a series of securities entitled “4.25% Senior Notes due 2029,” including the form of 4.25% Senior Notes due 2029 and the form of related guarantee (previously filed by Kilroy Realty Corporation and Kilroy Realty, L.P. as an exhibit on Form 8-K as filed with the Securities and Exchange Commission on August 6, 2014)
|
Exhibit
Number
|
|
Description
|
4.13
|
|
Officers’ Certificate, dated September 16, 2015, pursuant to Sections 102, 201, 301 and 303 of the Indenture dated March 1, 2011, among Kilroy Realty, L.P., as issuer, Kilroy Realty Corporation, as guarantor, and U.S. Bank National Association, as trustee, establishing a series of securities entitled “4.375% Senior Notes due 2025,” including the form of 4.375% Senior Notes due 2025 and the form of related guarantee (previously filed by Kilroy Realty Corporation and Kilroy Realty, L.P. as an exhibit on Form 8-K as filed with the Securities and Exchange Commission on September 16, 2015)
|
4.14
|
|
The Company is party to agreements in connection with long-term debt obligations, none of which individually exceeds ten percent of the total assets of the Company on a consolidated basis. Pursuant to Item 601(b)(4)(iii)(A) of Regulation S-K, the Company agrees to furnish copies of these agreements to the Commission upon request
|
10.1
|
|
Pledge Agreement by and among Kilroy Realty, L.P., John B. Kilroy, Sr., John B. Kilroy, Jr. and Kilroy Industries (previously filed by Kilroy Realty Corporation as an exhibit to the Registration Statement on Amendment No. 3 to Form S-11 (No. 333-15553))
|
10.2†
|
|
1997 Stock Option and Incentive Plan of the Registrant and Kilroy Realty, L.P. (previously filed by Kilroy Realty Corporation as an exhibit to the Registration Statement on Amendment No. 3 to Form S-11 (No. 333-15553))
|
10.3
|
|
License Agreement by and among the Registrant and the other persons named therein (previously filed by Kilroy Realty Corporation as an exhibit to the Registration Statement on Amendment No. 4 to Form S-11 (No. 333-15553))
|
10.4†
|
|
Form of Restricted Stock Award Agreement (previously filed by Kilroy Realty Corporation as an exhibit on Form 8-K as filed with the Securities and Exchange Commission on February 8, 2007)
|
10.5†
|
|
Kilroy Realty Corporation Stock Award Deferral Program (previously filed by Kilroy Realty Corporation as an exhibit to Form 8-K as filed with the Securities and Exchange Commission on January 2, 2008)
|
10.6†
|
|
Form of Indemnification Agreement of Kilroy Realty Corporation with certain officers and directors (previously filed by Kilroy Realty Corporation as an exhibit on Form 10-K for the year ended December 31, 2009)
|
10.7
|
|
Deed of Trust, Security Agreement and Fixture Filing, dated January 12, 2011, executed by Kilroy Realty 303, LLC (previously filed by Kilroy Realty Corporation and Kilroy Realty, L.P. as an exhibit on Form 8-K as filed with the Securities and Exchange Commission on January 13, 2011)
|
10.8
|
|
Guaranty, dated January 12, 2011, executed by Kilroy Realty, L.P. (previously filed by Kilroy Realty Corporation and Kilroy Realty, L.P. as an exhibit on Form 8-K as filed with the Securities and Exchange Commission on January 13, 2011)
|
10.9
|
|
Unsecured Indemnity Agreement, dated January 12, 2011, executed by Kilroy Realty 303, LLC (previously filed by Kilroy Realty Corporation and Kilroy Realty, L.P. as an exhibit on Form 8−K as filed with the Securities and Exchange Commission on January 13, 2011)
|
10.10†
|
|
Kilroy Realty Corporation Form of Stock Option Grant Notice and Stock Option Agreement (previously filed by Kilroy Realty Corporation as an exhibit on Form 8-K as filed with the Securities and Exchange Commission on February 24, 2012)
|
10.11†
|
|
Amended and Restated Employment Agreement by and between Kilroy Realty Corporation, Kilroy Realty, L.P. and John B. Kilroy, Jr. (previously filed by Kilroy Realty Corporation on Form 8-K as filed with the Securities and Exchange Commission on April 4, 2012)
|
10.12†
|
|
Noncompetition Agreement by and between Kilroy Realty Corporation, Kilroy Realty, L.P. and John B. Kilroy, Jr. (previously filed by Kilroy Realty Corporation on Form 8-K as filed with the Securities and Exchange Commission on April 4, 2012)
|
10.13
|
|
Term Loan Agreement, dated March 29, 2012 (previously filed by Kilroy Realty Corporation on Form 8-K as filed with the Securities and Exchange Commission on April 2, 2012)
|
10.14
|
|
First Amendment to Term Loan Agreement, dated November 28, 2012 (previously filed by Kilroy Realty Corporation as an exhibit on Form 10-K for the year ended December 31, 2012)
|
10.15
|
|
Promissory Note, dated June 28, 2012 (previously filed by Kilroy Realty Corporation on Form 8-K as filed with the Securities and Exchange Commission on July 5, 2012)
|
10.16
|
|
Loan Agreement, dated June 28, 2012, by and between KR MML 12701, LLC and Massachusetts Mutual Life Insurance Company (previously filed by Kilroy Realty Corporation on Form 8-K as filed with the Securities and Exchange Commission on July 5, 2012)
|
Exhibit
Number
|
|
Description
|
10.17
|
|
Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing (Irvine) for 2211 Michelson Drive, Irvine, California, dated June 28, 2012 (previously filed by Kilroy Realty Corporation on Form 8-K as filed with the Securities and Exchange Commission on July 5, 2012)
|
10.18
|
|
Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing (Santa Monica) for 2100-2110 Colorado Avenue, Santa Monica, California, dated June 28, 2012 (previously filed by Kilroy Realty Corporation on Form 8-K as filed with the Securities and Exchange Commission on July 5, 2012)
|
10.19
|
|
Recourse Guaranty Agreement, dated June 28, 2012 (previously filed by Kilroy Realty Corporation on Form 8-K as filed with the Securities and Exchange Commission on July 5, 2012)
|
10.20
|
|
Environmental Indemnification Agreement, dated June 28, 2012 (previously filed by Kilroy Realty Corporation on Form 8-K as filed with the Securities and Exchange Commission on July 5, 2012)
|
10.21†
|
|
Kilroy Realty Corporation 2006 Incentive Award Plan Restricted Stock Unit Agreement by and between Kilroy Realty Corporation and Jeffrey C. Hawken, dated April 4, 2013 (previously filed by Kilroy Realty Corporation as an exhibit on Form 10-Q for the quarter ended June 30, 2013)
|
10.22†
|
|
Kilroy Realty Corporation 2006 Incentive Award Plan Restricted Stock Unit Agreement by and between Kilroy Realty Corporation and John Kilroy, Jr., dated March 30, 2012 (previously filed by Kilroy Realty Corporation as an exhibit on Form 10-Q for the quarter ended June 30, 2013)
|
10.23†
|
|
Form of Restricted Stock Unit Agreement (previously filed by Kilroy Realty Corporation as an exhibit on Form 10-Q for the quarter ended June 30, 2013)
|
10.24†
|
|
Form of Stock Award Deferral Program Restricted Stock Unit Agreement (previously filed by Kilroy Realty Corporation as an exhibit on Form 10-Q for the quarter ended June 30, 2013)
|
10.25†
|
|
Form of Performance-Vest Restricted Stock Unit Agreement (previously filed by Kilroy Realty Corporation as an exhibit on Form 10-Q for the quarter ended March 31, 2014)
|
10.26†
|
|
Form of Restricted Stock Unit Agreement (previously filed by Kilroy Realty Corporation as an exhibit on Form 10-Q for the quarter ended March 31, 2014)
|
10.27†
|
|
Form of Restricted Stock Unit Agreement for Non-Employee Members of the Board of Directors (previously filed by Kilroy Realty Corporation as an exhibit on Form 10-Q for the quarter ended March 31, 2014)
|
10.28†
|
|
Kilroy Realty 2006 Incentive Award Plan (previously filed by Kilroy Realty Corporation on Form 8-K as filed with the Securities and Exchange Commission on May 21, 2015)
|
10.29
|
|
Amended and Restated Revolving Credit Agreement, dated June 23, 2014 (previously filed by Kilroy Realty Corporation as an exhibit on Form 10-Q for the quarter ended June 30, 2014)
|
10.30
|
|
Amended and Restated Guaranty, dated June 23, 2014 (previously filed by Kilroy Realty Corporation as an exhibit on Form 10-Q for the quarter ended June 30, 2014)
|
10.31
|
|
Term Loan Agreement, dated July 31, 2014 (previously filed by Kilroy Realty Corporation as an exhibit on Form 10-Q for the quarter ended September 30, 2014)
|
10.32
|
|
Guaranty, dated July 31, 2014 (previously filed by Kilroy Realty Corporation as an exhibit on Form 10-Q for the quarter ended September 30, 2014)
|
10.33
|
|
Sales Agreement, dated December 12, 2014, between Kilroy Realty Corporation, Kilroy Realty, L.P. and RBC Capital Markets, LLC (previously filed by Kilroy Realty Corporation as an exhibit on Form 8-K as filed with the Securities and Exchange Commission on December 12, 2014)
|
10.34
|
|
Sales Agreement, dated December 12, 2014, between Kilroy Realty Corporation, Kilroy Realty, L.P. and Jefferies LLC (previously filed by Kilroy Realty Corporation as an exhibit on Form 8-K as filed with the Securities and Exchange Commission on December 12, 2014)
|
10.35
|
|
Sales Agreement, dated December 12, 2014, between Kilroy Realty Corporation, Kilroy Realty, L.P. and KeyBanc Capital Markets Inc. (previously filed by Kilroy Realty Corporation as an exhibit on Form 8-K as filed with the Securities and Exchange Commission on December 12, 2014)
|
10.36
|
|
Sales Agreement, dated December 12, 2014, between Kilroy Realty Corporation, Kilroy Realty, L.P. and BNP Paribas Securities Corp. (previously filed by Kilroy Realty Corporation as an exhibit on Form 8-K as filed with the Securities and Exchange Commission on December 12, 2014)
|
Exhibit
Number
|
|
Description
|
10.37
|
|
Sales Agreement, dated December 12, 2014, between Kilroy Realty Corporation, Kilroy Realty, L.P. and J.P. Morgan Securities LLC (previously filed by Kilroy Realty Corporation as an exhibit on Form 8-K as filed with the Securities and Exchange Commission on December 12, 2014)
|
10.38
|
|
Sales Agreement, dated December 12, 2014, between Kilroy Realty Corporation, Kilroy Realty, L.P. and Barclays Capital Inc. (previously filed by Kilroy Realty Corporation as an exhibit on Form 8-K as filed with the Securities and Exchange Commission on December 12, 2014)
|
10.39†
|
|
Form of Performance-Vest Restricted Stock Unit Agreement (previously filed by Kilroy Realty Corporation as an exhibit on Form 10-Q for the quarter ended March 31, 2015)
|
10.40†
|
|
Form of Restricted Stock Unit Agreement (previously filed by Kilroy Realty Corporation as an exhibit on Form 10-Q for the quarter ended March 31, 2015)
|
10.41†
|
|
Form of Restricted Stock Unit Agreement for Non-Employee Members of the Board of Directors (previously filed by Kilroy Realty Corporation as an exhibit on Form 10-Q for the quarter ended March 31, 2015)
|
10.42†
|
|
Amended and Restated Employment Agreement and Non-Competition Agreement by and between Kilroy Realty Corporation, Kilroy Realty, L.P. and Jeffrey C. Hawken effective as of December 31, 2015 (previously filed by Kilroy Realty Corporation as an exhibit on Form 10-K for the year ended December 31, 2015)
|
10.43†
|
|
Kilroy Realty Corporation Director Compensation Policy effective as of January 1, 2016 (previously filed by Kilroy Realty Corporation as an exhibit on Form 10-K for the year ended December 31, 2015)
|
10.44†
|
|
Kilroy Realty Corporation 2006 Incentive Award Plan Restricted Stock Unit Agreement by and between Kilroy Realty Corporation and Jeffrey C. Hawken, dated January 9, 2016 (previously filed by Kilroy Realty Corporation as an exhibit on Form 10-Q for the quarter ended March 31, 2016)
|
10.45†
|
|
Amended and Restated Employment Agreement and Non-Competition Agreement by and between Kilroy Realty Corporation, Kilroy Realty, L.P. and Tyler H. Rose effective as of January 28, 2016 (previously filed by Kilroy Realty Corporation as an exhibit on Form 10-Q for the quarter ended March 31, 2016)
|
10.46†
|
|
Amended and Restated Employment Agreement and Non-Competition Agreement by and between Kilroy Realty Corporation, Kilroy Realty, L.P. and Justin W. Smart effective as of January 28, 2016 (previously filed by Kilroy Realty Corporation as an exhibit on Form 10-Q for the quarter ended March 31, 2016)
|
10.47
|
|
Note Purchase Agreement dated September 14, 2016 (previously filed by Kilroy Realty Corporation as an exhibit on Form 8-K as filed with the Securities and Exchange Commission on September 14, 2016)
|
10.48*
|
|
Amendment to Sales Agreement, dated September 29, 2016, between Kilroy Realty Corporation, Kilroy Realty, L.P. and RBC Capital Markets, LLC
|
10.49*
|
|
Amendment to Sales Agreement, dated September 29, 2016, between Kilroy Realty Corporation, Kilroy Realty, L.P. and Jefferies LLC
|
10.50*
|
|
Amendment to Sales Agreement, dated September 29, 2016, between Kilroy Realty Corporation, Kilroy Realty, L.P. and KeyBanc Capital Markets Inc.
|
10.51*
|
|
Amendment to Sales Agreement, dated September 29, 2016, between Kilroy Realty Corporation, Kilroy Realty, L.P. and BNP Paribas Securities Corp.
|
10.52*
|
|
Amendment to Sales Agreement, dated September 29, 2016, between Kilroy Realty Corporation, Kilroy Realty, L.P. and J.P. Morgan Securities LLC
|
10.53*
|
|
Amendment to Sales Agreement, dated September 29, 2016, between Kilroy Realty Corporation, Kilroy Realty, L.P. and Barclays Capital Inc.
|
10.54
|
|
Form of Time Sharing Agreement of Kilroy Realty, L.P. (previously filed by Kilroy Realty Corporation as an exhibit on Form 10-Q for the quarter ended September 30, 2016)
|
10.55†*
|
|
Kilroy Realty Corporation 2007 Deferred Compensation Plan, as amended and restated effective January 1, 2017
|
12.1*
|
|
Statement of Computation of Consolidated Ratio of Earnings to Fixed Charges and Consolidated Ratio of Earnings to Combined Fixed Charges and Preferred Dividends of Kilroy Realty Corporation
|
Exhibit
Number
|
|
Description
|
12.2*
|
|
Statement of Computation of Consolidated Ratio of Earnings to Fixed Charges of Kilroy Realty, L.P.
|
21.1*
|
|
List of Subsidiaries of Kilroy Realty Corporation
|
21.2*
|
|
List of Subsidiaries of Kilroy Realty, L.P.
|
23.1*
|
|
Consent of Deloitte & Touche LLP for Kilroy Realty Corporation
|
23.2*
|
|
Consent of Deloitte & Touche LLP for Kilroy Realty, L.P.
|
24.1*
|
|
Power of Attorney (included on the signature page of this Form 10-K)
|
31.1*
|
|
Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer of Kilroy Realty Corporation
|
31.2*
|
|
Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer of Kilroy Realty Corporation
|
31.3*
|
|
Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer of Kilroy Realty, L.P.
|
31.4*
|
|
Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer of Kilroy Realty, L.P.
|
32.1*
|
|
Section 1350 Certification of Chief Executive Officer of Kilroy Realty Corporation
|
32.2*
|
|
Section 1350 Certification of Chief Financial Officer of Kilroy Realty Corporation
|
32.3*
|
|
Section 1350 Certification of Chief Executive Officer of Kilroy Realty, L.P.
|
32.4*
|
|
Section 1350 Certification of Chief Financial Officer of Kilroy Realty, L.P.
|
101.1
|
|
The following Kilroy Realty Corporation and Kilroy Realty, L.P. financial information for the year ended December 31, 2016, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Income, (iii) Consolidated Statements of Changes in Equity, (iv) Consolidated Statements of Capital, (v) Consolidated Statements of Cash Flows and (vi) Notes to the Consolidated Financial Statements.
(1)
|
*
|
Filed herewith
|
†
|
Management contract or compensatory plan or arrangement.
|
(1)
|
Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Exchange Act of 1934 and otherwise are not subject to liability under these sections.
|
|
KILROY REALTY CORPORATION
|
||
|
|
|
|
|
By
|
|
/s/ Heidi R. Roth
|
|
|
|
Heidi R. Roth
Executive Vice President, Chief Accounting Officer and Controller
|
Name
|
|
Title
|
Date
|
|
|
|
|
/s/ John Kilroy
|
|
Chairman of the Board, President and Chief Executive Officer (Principal Executive Officer)
|
February 14, 2017
|
John Kilroy
|
|
|
|
/s/ Tyler H. Rose
|
|
Executive Vice President and Chief Financial Officer (Principal Financial Officer)
|
February 14, 2017
|
Tyler H. Rose
|
|
|
|
/s/ Heidi R. Roth
|
|
Executive Vice President, Chief Accounting Officer and Controller (Principal Accounting Officer)
|
February 14, 2017
|
Heidi R. Roth
|
|
|
|
/s/ Edward F. Brennan, PhD
|
|
Director
|
February 13, 2017
|
Edward F. Brennan, PhD
|
|
|
|
/s/ Jolie Hunt
|
|
Director
|
February 13, 2017
|
Jolie Hunt
|
|
|
|
/s/ Scott S. Ingraham
|
|
Director
|
February 13, 2017
|
Scott S. Ingraham
|
|
|
|
/s/ Gary R. Stevenson
|
|
Director
|
February 13, 2017
|
Gary R. Stevenson
|
|
|
|
/s/ Peter B. Stoneberg
|
|
Director
|
February 13, 2017
|
Peter B. Stoneberg
|
|
|
|
|
KILROY REALTY, L.P.
|
||
|
|
|
|
|
By
|
|
/s/ Heidi R. Roth
|
|
|
|
Heidi R. Roth
Executive Vice President, Chief Accounting Officer and Controller
|
Name
|
|
Title
|
Date
|
|
|
|
|
/s/ John Kilroy
|
|
Chairman of the Board, President and Chief Executive Officer (Principal Executive Officer)
|
February 14, 2017
|
John Kilroy
|
|
|
|
/s/ Tyler H. Rose
|
|
Executive Vice President and Chief Financial Officer (Principal Financial Officer)
|
February 14, 2017
|
Tyler H. Rose
|
|
|
|
/s/ Heidi R. Roth
|
|
Executive Vice President, Chief Accounting Officer and Controller (Principal Accounting Officer)
|
February 14, 2017
|
Heidi R. Roth
|
|
|
|
/s/ Edward F. Brennan, PhD
|
|
Director
|
February 13, 2017
|
Edward F. Brennan, PhD
|
|
|
|
/s/ Jolie Hunt
|
|
Director
|
February 13, 2017
|
Jolie Hunt
|
|
|
|
/s/ Scott S. Ingraham
|
|
Director
|
February 13, 2017
|
Scott S. Ingraham
|
|
|
|
/s/ Gary R. Stevenson
|
|
Director
|
February 13, 2017
|
Gary R. Stevenson
|
|
|
|
/s/ Peter B. Stoneberg
|
|
Director
|
February 13, 2017
|
Peter B. Stoneberg
|
|
|
|
|
Page
|
FINANCIAL STATEMENTS OF KILROY REALTY CORPORATION:
|
|
F - 3
|
|
FINANCIAL STATEMENTS OF KILROY REALTY, L.P.:
|
|
|
|
|
December 31, 2016
|
|
December 31, 2015
|
||||
ASSETS
|
|
|
|
||||
REAL ESTATE ASSETS (Notes 2, 3 and 4):
|
|
|
|
||||
Land and improvements
|
$
|
1,108,971
|
|
|
$
|
875,794
|
|
Buildings and improvements
|
4,938,250
|
|
|
4,091,012
|
|
||
Undeveloped land and construction in progress
|
1,013,533
|
|
|
1,361,340
|
|
||
Total real estate assets held for investment
|
7,060,754
|
|
|
6,328,146
|
|
||
Accumulated depreciation and amortization
|
(1,139,853
|
)
|
|
(994,241
|
)
|
||
Total real estate assets held for investment, net
|
5,920,901
|
|
|
5,333,905
|
|
||
REAL ESTATE ASSETS AND OTHER ASSETS HELD FOR SALE, NET (Note 4)
|
9,417
|
|
|
117,666
|
|
||
CASH AND CASH EQUIVALENTS (Notes 4 and 11)
|
193,418
|
|
|
56,508
|
|
||
RESTRICTED CASH (Note 4)
|
56,711
|
|
|
696
|
|
||
MARKETABLE SECURITIES (Notes 16 and 19)
|
14,773
|
|
|
12,882
|
|
||
CURRENT RECEIVABLES, NET (Note 6)
|
13,460
|
|
|
11,153
|
|
||
DEFERRED RENT RECEIVABLES, NET (Note 6)
|
218,977
|
|
|
189,704
|
|
||
DEFERRED LEASING COSTS AND ACQUISITION-RELATED INTANGIBLE ASSETS, NET (Notes 3 and 5)
|
208,368
|
|
|
176,683
|
|
||
PREPAID EXPENSES AND OTHER ASSETS, NET (Note 7)
|
70,608
|
|
|
27,233
|
|
||
TOTAL ASSETS
|
$
|
6,706,633
|
|
|
$
|
5,926,430
|
|
LIABILITIES AND EQUITY
|
|
|
|
||||
LIABILITIES:
|
|
|
|
||||
Secured debt, net (Notes 8, 9 and 19)
|
$
|
472,772
|
|
|
$
|
380,835
|
|
Unsecured debt, net (Notes 8, 9 and 19)
|
1,847,351
|
|
|
1,844,634
|
|
||
Accounts payable, accrued expenses and other liabilities (Note 18)
|
202,391
|
|
|
246,323
|
|
||
Accrued dividends and distributions (Notes 13 and 29)
|
222,306
|
|
|
34,992
|
|
||
Deferred revenue and acquisition-related intangible liabilities, net (Notes 3, 5 and 10)
|
150,360
|
|
|
128,156
|
|
||
Rents received in advance and tenant security deposits
|
52,080
|
|
|
49,361
|
|
||
Liabilities and deferred revenue of real estate assets held for sale (Note 4)
|
56
|
|
|
7,543
|
|
||
Total liabilities
|
2,947,316
|
|
|
2,691,844
|
|
||
COMMITMENTS AND CONTINGENCIES (Note 18)
|
|
|
|
||||
EQUITY (Notes 11 and 13):
|
|
|
|
||||
Stockholders’ Equity:
|
|
|
|
||||
Preferred Stock, $.01 par value, 30,000,000 shares authorized,
|
|
|
|
||||
6.875% Series G Cumulative Redeemable Preferred stock, $.01 par value,
4,600,000 shares authorized, 4,000,000 shares issued and outstanding ($100,000
liquidation preference)
|
96,155
|
|
|
96,155
|
|
||
6.375% Series H Cumulative Redeemable Preferred stock, $.01 par value,
4,000,000 shares authorized, issued and outstanding ($100,000 liquidation preference)
|
96,256
|
|
|
96,256
|
|
||
Common stock, $.01 par value, 150,000,000 shares authorized,
93,219,439 and 92,258,690 shares issued and outstanding, respectively
|
932
|
|
|
923
|
|
||
Additional paid-in capital
|
3,457,649
|
|
|
3,047,894
|
|
||
Distributions in excess of earnings
|
(107,997
|
)
|
|
(70,262
|
)
|
||
Total stockholders’ equity
|
3,542,995
|
|
|
3,170,966
|
|
||
Noncontrolling Interests:
|
|
|
|
||||
Common units of the Operating Partnership (Note 11)
|
85,590
|
|
|
57,100
|
|
||
Noncontrolling interests in consolidated property partnerships (Notes 2 and 11)
|
130,732
|
|
|
6,520
|
|
||
Total noncontrolling interests
|
216,322
|
|
|
63,620
|
|
||
Total equity
|
3,759,317
|
|
|
3,234,586
|
|
||
TOTAL LIABILITIES AND EQUITY
|
$
|
6,706,633
|
|
|
$
|
5,926,430
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
REVENUES:
|
|
|
|
|
|
||||||
Rental income
|
$
|
574,413
|
|
|
$
|
525,355
|
|
|
$
|
466,328
|
|
Tenant reimbursements
|
61,079
|
|
|
53,774
|
|
|
46,717
|
|
|||
Other property income (Notes 18 and 20)
|
7,080
|
|
|
2,146
|
|
|
8,680
|
|
|||
Total revenues
|
642,572
|
|
|
581,275
|
|
|
521,725
|
|
|||
EXPENSES:
|
|
|
|
|
|
||||||
Property expenses
|
113,932
|
|
|
105,378
|
|
|
100,514
|
|
|||
Real estate taxes
|
55,206
|
|
|
50,223
|
|
|
45,197
|
|
|||
Provision for bad debts
|
—
|
|
|
545
|
|
|
58
|
|
|||
Ground leases (Notes 5 and 18)
|
3,439
|
|
|
3,096
|
|
|
3,075
|
|
|||
General and administrative expenses
|
57,029
|
|
|
48,265
|
|
|
46,152
|
|
|||
Acquisition-related expenses
|
1,902
|
|
|
497
|
|
|
1,479
|
|
|||
Depreciation and amortization (Notes 2 and 5)
|
217,234
|
|
|
204,294
|
|
|
202,417
|
|
|||
Total expenses
|
448,742
|
|
|
412,298
|
|
|
398,892
|
|
|||
OTHER (EXPENSES) INCOME:
|
|
|
|
|
|
||||||
Interest income and other net investment gains (losses) (Note 19)
|
1,764
|
|
|
243
|
|
|
561
|
|
|||
Interest expense (Note 9)
|
(55,803
|
)
|
|
(57,682
|
)
|
|
(67,571
|
)
|
|||
Total other (expenses) income
|
(54,039
|
)
|
|
(57,439
|
)
|
|
(67,010
|
)
|
|||
INCOME FROM CONTINUING OPERATIONS BEFORE GAINS ON SALES OF REAL ESTATE
|
139,791
|
|
|
111,538
|
|
|
55,823
|
|
|||
Net (loss) gain on sales of land (Note 4)
|
(295
|
)
|
|
17,116
|
|
|
3,490
|
|
|||
Gains on sales of depreciable operating properties (Note 4)
|
164,302
|
|
|
109,950
|
|
|
—
|
|
|||
INCOME FROM CONTINUING OPERATIONS
|
303,798
|
|
|
238,604
|
|
|
59,313
|
|
|||
DISCONTINUED OPERATIONS (Note 21)
|
|
|
|
|
|
||||||
Income from discontinued operations
|
—
|
|
|
—
|
|
|
2,573
|
|
|||
Net gain on dispositions of discontinued operations
|
—
|
|
|
—
|
|
|
121,922
|
|
|||
Total income from discontinued operations
|
—
|
|
|
—
|
|
|
124,495
|
|
|||
NET INCOME
|
303,798
|
|
|
238,604
|
|
|
183,808
|
|
|||
Net income attributable to noncontrolling common units of the Operating Partnership (Notes 2 and 11)
|
(6,635
|
)
|
|
(4,339
|
)
|
|
(3,589
|
)
|
|||
Net income attributable to noncontrolling interests in consolidated property partnerships (Notes 2 and 11)
|
(3,375
|
)
|
|
(184
|
)
|
|
—
|
|
|||
Total income attributable to noncontrolling interests
|
(10,010
|
)
|
|
(4,523
|
)
|
|
(3,589
|
)
|
|||
NET INCOME ATTRIBUTABLE TO KILROY REALTY CORPORATION
|
293,788
|
|
|
234,081
|
|
|
180,219
|
|
|||
PREFERRED DIVIDENDS (NOTE 13)
|
(13,250
|
)
|
|
(13,250
|
)
|
|
(13,250
|
)
|
|||
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS
|
$
|
280,538
|
|
|
$
|
220,831
|
|
|
$
|
166,969
|
|
Income from continuing operations available to common stockholders per share of
common stock – basic (Note 22)
|
$
|
3.00
|
|
|
$
|
2.44
|
|
|
$
|
0.52
|
|
Income from continuing operations available to common stockholders per share of
common stock – diluted (Note 22)
|
$
|
2.97
|
|
|
$
|
2.42
|
|
|
$
|
0.51
|
|
Net income available to common stockholders per share – basic (Note 22)
|
$
|
3.00
|
|
|
$
|
2.44
|
|
|
$
|
1.99
|
|
Net income available to common stockholders per share – diluted (Note 22)
|
$
|
2.97
|
|
|
$
|
2.42
|
|
|
$
|
1.95
|
|
Weighted average shares of common stock outstanding – basic (Note 22)
|
92,342,483
|
|
|
89,854,096
|
|
|
83,090,235
|
|
|||
Weighted average shares of common stock outstanding – diluted (Note 22)
|
93,023,034
|
|
|
90,395,775
|
|
|
84,967,720
|
|
|
Preferred
Stock
|
|
Common Stock
|
|
Total
Stock-
holders’
Equity
|
|
Noncontrolling
Interests
|
|
Total
Equity
|
|||||||||||||||||||||
Number
of
Shares
|
|
Common
Stock
|
|
Additional
Paid-in
Capital
|
|
Distributions
in Excess of
Earnings
|
|
|||||||||||||||||||||||
BALANCE AS OF DECEMBER 31, 2013
|
$
|
192,411
|
|
|
82,153,944
|
|
|
$
|
822
|
|
|
$
|
2,478,975
|
|
|
$
|
(210,896
|
)
|
|
$
|
2,461,312
|
|
|
$
|
54,848
|
|
|
$
|
2,516,160
|
|
Net income
|
|
|
|
|
|
|
|
|
180,219
|
|
|
180,219
|
|
|
3,589
|
|
|
183,808
|
|
|||||||||||
Issuance of common stock
|
|
|
1,950,599
|
|
|
20
|
|
|
123,840
|
|
|
|
|
123,860
|
|
|
|
|
123,860
|
|
||||||||||
Issuance of share-based compensation awards
|
|
|
—
|
|
|
|
|
|
1,692
|
|
|
|
|
1,692
|
|
|
|
|
1,692
|
|
||||||||||
Non-cash amortization of share-based compensation
|
|
|
|
|
|
|
14,471
|
|
|
|
|
14,471
|
|
|
|
|
14,471
|
|
||||||||||||
Exercise of stock options
|
|
|
495,000
|
|
|
5
|
|
|
21,087
|
|
|
|
|
21,092
|
|
|
|
|
21,092
|
|
||||||||||
Repurchase of common stock and restricted stock units
|
|
|
(58,045
|
)
|
|
|
|
(3,533
|
)
|
|
|
|
(3,533
|
)
|
|
|
|
(3,533
|
)
|
|||||||||||
Settlement of restricted stock units for shares of common stock
|
|
|
141,205
|
|
|
—
|
|
|
(1
|
)
|
|
|
|
(1
|
)
|
|
|
|
(1
|
)
|
||||||||||
Shares of common stock issued in connection with settlement of 4.25% Exchangeable Senior Notes
|
|
|
2,091,323
|
|
|
21
|
|
|
202
|
|
|
|
|
223
|
|
|
|
|
223
|
|
||||||||||
Shares of common stock received in connection with capped call option transactions
|
|
|
(515,342
|
)
|
|
(5
|
)
|
|
5
|
|
|
|
|
—
|
|
|
|
|
—
|
|
||||||||||
Exchange of common units of the Operating Partnership
|
|
|
1,000
|
|
|
|
|
28
|
|
|
|
|
28
|
|
|
(28
|
)
|
|
—
|
|
||||||||||
Adjustment for noncontrolling interest in the Operating Partnership
|
|
|
|
|
|
|
(866
|
)
|
|
|
|
(866
|
)
|
|
866
|
|
|
—
|
|
|||||||||||
Contribution by noncontrolling interest in consolidated property partnership
|
|
|
|
|
|
|
|
|
|
|
|
|
977
|
|
|
977
|
|
|||||||||||||
Preferred dividends and distributions
|
|
|
|
|
|
|
|
|
(13,250
|
)
|
|
(13,250
|
)
|
|
|
|
(13,250
|
)
|
||||||||||||
Dividends declared per share of common stock and common unit ($1.40 per share/unit)
|
|
|
|
|
|
|
|
|
(119,037
|
)
|
|
(119,037
|
)
|
|
(2,526
|
)
|
|
(121,563
|
)
|
|||||||||||
BALANCE AS OF DECEMBER 31, 2014
|
192,411
|
|
|
86,259,684
|
|
|
863
|
|
|
2,635,900
|
|
|
(162,964
|
)
|
|
2,666,210
|
|
|
57,726
|
|
|
2,723,936
|
|
|||||||
Net income
|
|
|
|
|
|
|
|
|
234,081
|
|
|
234,081
|
|
|
4,523
|
|
|
238,604
|
|
|||||||||||
Issuance of common stock
|
|
|
5,640,033
|
|
|
56
|
|
|
387,342
|
|
|
|
|
387,398
|
|
|
|
|
387,398
|
|
||||||||||
Issuance of share-based compensation awards
|
|
|
|
|
|
|
1,692
|
|
|
|
|
1,692
|
|
|
|
|
1,692
|
|
||||||||||||
Non-cash amortization of share-based compensation
|
|
|
|
|
|
|
18,869
|
|
|
|
|
18,869
|
|
|
|
|
18,869
|
|
||||||||||||
Exercise of stock options
|
|
|
342,000
|
|
|
4
|
|
|
14,569
|
|
|
|
|
14,573
|
|
|
|
|
14,573
|
|
||||||||||
Repurchase of common stock, stock options and restricted stock units
|
|
|
(101,389
|
)
|
|
|
|
(7,081
|
)
|
|
|
|
(7,081
|
)
|
|
|
|
(7,081
|
)
|
|||||||||||
Settlement of restricted stock units for shares of common stock
|
|
|
78,937
|
|
|
—
|
|
|
(1
|
)
|
|
|
|
(1
|
)
|
|
|
|
(1
|
)
|
||||||||||
Exchange of common units of the Operating Partnership
|
|
|
39,425
|
|
|
|
|
1,223
|
|
|
|
|
1,223
|
|
|
(1,223
|
)
|
|
—
|
|
||||||||||
Adjustment for noncontrolling interest in the Operating Partnership
|
|
|
|
|
|
|
(4,619
|
)
|
|
|
|
(4,619
|
)
|
|
4,619
|
|
|
—
|
|
|||||||||||
Contribution by noncontrolling interest in consolidated property partnership
|
|
|
|
|
|
|
|
|
|
|
|
|
474
|
|
|
474
|
|
|||||||||||||
Preferred dividends and distributions
|
|
|
|
|
|
|
|
|
(13,250
|
)
|
|
(13,250
|
)
|
|
|
|
(13,250
|
)
|
||||||||||||
Dividends declared per share of common stock and common unit ($1.40 per share/unit)
|
|
|
|
|
|
|
|
|
(128,129
|
)
|
|
(128,129
|
)
|
|
(2,499
|
)
|
|
(130,628
|
)
|
|||||||||||
BALANCE AS OF DECEMBER 31, 2015
|
192,411
|
|
|
92,258,690
|
|
|
923
|
|
|
3,047,894
|
|
|
(70,262
|
)
|
|
3,170,966
|
|
|
63,620
|
|
|
3,234,586
|
|
|||||||
Net income
|
|
|
|
|
|
|
|
|
293,788
|
|
|
293,788
|
|
|
10,010
|
|
|
303,798
|
|
|||||||||||
Issuance of common stock (Note 13)
|
|
|
451,398
|
|
|
4
|
|
|
31,113
|
|
|
|
|
31,117
|
|
|
|
|
31,117
|
|
||||||||||
Issuance of share-based compensation awards (Note 15)
|
|
|
|
|
|
|
1,827
|
|
|
|
|
1,827
|
|
|
|
|
1,827
|
|
||||||||||||
Non-cash amortization of share-based compensation (Note 15)
|
|
|
|
|
|
|
26,624
|
|
|
|
|
26,624
|
|
|
|
|
26,624
|
|
||||||||||||
Exercise of stock options (Note 15)
|
|
|
286,500
|
|
|
3
|
|
|
12,205
|
|
|
|
|
12,208
|
|
|
|
|
12,208
|
|
||||||||||
Repurchase of common stock, stock options and restricted stock units (Note 15)
|
|
|
(137,126
|
)
|
|
(1
|
)
|
|
(8,874
|
)
|
|
|
|
(8,875
|
)
|
|
|
|
(8,875
|
)
|
||||||||||
Settlement of restricted stock units for shares of common stock (Note 15)
|
|
|
109,044
|
|
|
1
|
|
|
(1
|
)
|
|
|
|
—
|
|
|
|
|
—
|
|
||||||||||
Issuance of common units in connection with acquisition (Note 3)
|
|
|
|
|
|
|
|
|
|
|
|
|
48,033
|
|
|
48,033
|
|
|||||||||||||
Exchange of common units of the Operating Partnership
|
|
|
250,933
|
|
|
2
|
|
|
8,891
|
|
|
|
|
8,893
|
|
|
(8,893
|
)
|
|
—
|
|
|||||||||
Initial contributions from noncontrolling interest in consolidated property partnership, net of transaction costs (Note 11)
|
|
|
|
|
|
|
328,997
|
|
|
|
|
328,997
|
|
|
124,452
|
|
|
453,449
|
|
|||||||||||
Distributions to noncontrolling interests in consolidated property partnerships
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
(3,615
|
)
|
|
(3,615
|
)
|
||||||||||||
Adjustment for noncontrolling interest in the Operating Partnership (Note 2)
|
|
|
|
|
|
|
8,973
|
|
|
|
|
8,973
|
|
|
(8,973
|
)
|
|
—
|
|
|||||||||||
Preferred dividends and distributions
|
|
|
|
|
|
|
|
|
(13,250
|
)
|
|
(13,250
|
)
|
|
|
|
(13,250
|
)
|
||||||||||||
Dividends declared per share of common stock and common unit ($3.375 per share/unit) (Notes 13 and 29)
|
|
|
|
|
|
|
|
|
(318,273
|
)
|
|
(318,273
|
)
|
|
(8,312
|
)
|
|
(326,585
|
)
|
|||||||||||
BALANCE AS OF DECEMBER 31, 2016
|
$
|
192,411
|
|
|
93,219,439
|
|
|
$
|
932
|
|
|
$
|
3,457,649
|
|
|
$
|
(107,997
|
)
|
|
$
|
3,542,995
|
|
|
$
|
216,322
|
|
|
$
|
3,759,317
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
||||||
Net income
|
$
|
303,798
|
|
|
$
|
238,604
|
|
|
$
|
183,808
|
|
Adjustments to reconcile net income to net cash provided by operating activities (including discontinued operations):
|
|
|
|
|
|
||||||
Depreciation and amortization of real estate assets and leasing costs
|
213,156
|
|
|
201,482
|
|
|
202,108
|
|
|||
Depreciation of non-real estate furniture, fixtures and equipment
|
4,078
|
|
|
2,812
|
|
|
2,370
|
|
|||
Increase in provision for bad debts
|
—
|
|
|
545
|
|
|
58
|
|
|||
Non-cash amortization of share-based compensation awards (Note 15)
|
21,064
|
|
|
15,537
|
|
|
12,095
|
|
|||
Non-cash amortization of deferred financing costs and debt discounts and premiums
|
2,720
|
|
|
1,853
|
|
|
4,315
|
|
|||
Non-cash amortization of net below market rents (Note 5)
|
(7,166
|
)
|
|
(8,449
|
)
|
|
(8,328
|
)
|
|||
Gains on sales of depreciable operating properties (Note 4)
|
(164,302
|
)
|
|
(109,950
|
)
|
|
—
|
|
|||
Gains on sales of discontinued operations (Note 21)
|
—
|
|
|
—
|
|
|
(121,922
|
)
|
|||
Loss (gain) on sales of land (Note 4)
|
295
|
|
|
(17,116
|
)
|
|
(3,490
|
)
|
|||
Non-cash amortization of deferred revenue related to tenant-funded tenant improvements (Note 10)
|
(13,244
|
)
|
|
(13,338
|
)
|
|
(10,979
|
)
|
|||
Straight-line rents
|
(29,629
|
)
|
|
(44,383
|
)
|
|
(31,782
|
)
|
|||
Net change in other operating assets
|
(5,214
|
)
|
|
(8,085
|
)
|
|
367
|
|
|||
Net change in other operating liabilities
|
19,498
|
|
|
12,496
|
|
|
16,633
|
|
|||
Net cash provided by operating activities
|
345,054
|
|
|
272,008
|
|
|
245,253
|
|
|||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
||||||
Expenditures for development properties and undeveloped land
|
(351,012
|
)
|
|
(407,969
|
)
|
|
(417,784
|
)
|
|||
Expenditures for acquisitions of development properties and undeveloped land (Note 3)
|
(33,513
|
)
|
|
(139,073
|
)
|
|
(147,182
|
)
|
|||
Expenditures for acquisitions of operating properties (Note 3)
|
(393,767
|
)
|
|
—
|
|
|
(204,546
|
)
|
|||
Expenditures for operating properties and other capital assets
|
(111,961
|
)
|
|
(99,557
|
)
|
|
(132,080
|
)
|
|||
Net proceeds received from dispositions (Notes 4 and 21)
|
325,031
|
|
|
319,639
|
|
|
427,544
|
|
|||
(Increase) decrease in restricted cash (Note 4)
|
(56,015
|
)
|
|
65,210
|
|
|
(25,405
|
)
|
|||
Issuance of notes receivable (Note 7)
|
(16,100
|
)
|
|
(3,000
|
)
|
|
—
|
|
|||
Decrease (increase) in acquisition-related deposits
|
1,902
|
|
|
1,998
|
|
|
(1,983
|
)
|
|||
Net cash used in investing activities
|
(635,435
|
)
|
|
(262,752
|
)
|
|
(501,436
|
)
|
|||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
||||||
Borrowings on unsecured revolving credit facility
|
305,000
|
|
|
250,000
|
|
|
505,000
|
|
|||
Repayments on unsecured revolving credit facility
|
(305,000
|
)
|
|
(390,000
|
)
|
|
(410,000
|
)
|
|||
Proceeds from the issuance of secured debt (Note 9)
|
170,000
|
|
|
—
|
|
|
—
|
|
|||
Principal payments and repayments of secured debt (Note 9)
|
(74,140
|
)
|
|
(159,766
|
)
|
|
(9,845
|
)
|
|||
Net proceeds from the issuance of unsecured debt (Note 9)
|
—
|
|
|
397,776
|
|
|
395,528
|
|
|||
Repayments of unsecured debt (Note 9)
|
—
|
|
|
(325,000
|
)
|
|
(83,000
|
)
|
|||
Repayments of exchangeable senior notes (Note 9)
|
—
|
|
|
—
|
|
|
(172,500
|
)
|
|||
Borrowings on unsecured debt (Note 9)
|
—
|
|
|
—
|
|
|
39,000
|
|
|||
Financing costs
|
(2,159
|
)
|
|
(4,814
|
)
|
|
(8,648
|
)
|
|||
Net proceeds from issuance of common stock (Note 13)
|
31,117
|
|
|
387,398
|
|
|
102,229
|
|
|||
Proceeds from exercise of stock options (Note 15)
|
12,208
|
|
|
14,573
|
|
|
21,092
|
|
|||
Repurchase of common stock and restricted stock units (Note 13)
|
(8,875
|
)
|
|
(7,081
|
)
|
|
(3,533
|
)
|
|||
Contributions from noncontrolling interests in consolidated property partnerships (Notes 2 and 11)
|
453,449
|
|
|
474
|
|
|
977
|
|
|||
Distributions to noncontrolling interests in consolidated property partnerships
|
(3,615
|
)
|
|
—
|
|
|
—
|
|
|||
Dividends and distributions paid to common stockholders and common unitholders
|
(137,444
|
)
|
|
(126,839
|
)
|
|
(118,463
|
)
|
|||
Dividends and distributions paid to preferred stockholders and preferred unitholders
|
(13,250
|
)
|
|
(13,250
|
)
|
|
(13,250
|
)
|
|||
Net cash provided by financing activities
|
427,291
|
|
|
23,471
|
|
|
244,587
|
|
|||
Net increase (decrease) in cash and cash equivalents
|
136,910
|
|
|
32,727
|
|
|
(11,596
|
)
|
|||
Cash and cash equivalents, beginning of year
|
56,508
|
|
|
23,781
|
|
|
35,377
|
|
|||
Cash and cash equivalents, end of year
|
$
|
193,418
|
|
|
$
|
56,508
|
|
|
$
|
23,781
|
|
|
December 31, 2016
|
|
December 31, 2015
|
||||
ASSETS
|
|
|
|
||||
REAL ESTATE ASSETS (Notes 2, 3 and 4):
|
|
|
|
||||
Land and improvements
|
$
|
1,108,971
|
|
|
$
|
875,794
|
|
Buildings and improvements
|
4,938,250
|
|
|
4,091,012
|
|
||
Undeveloped land and construction in progress
|
1,013,533
|
|
|
1,361,340
|
|
||
Total real estate assets held for investment
|
7,060,754
|
|
|
6,328,146
|
|
||
Accumulated depreciation and amortization
|
(1,139,853
|
)
|
|
(994,241
|
)
|
||
Total real estate assets held for investment, net
|
5,920,901
|
|
|
5,333,905
|
|
||
REAL ESTATE ASSETS AND OTHER ASSETS HELD FOR SALE, NET (Note 4)
|
9,417
|
|
|
117,666
|
|
||
CASH AND CASH EQUIVALENTS (Notes 4 and 12)
|
193,418
|
|
|
56,508
|
|
||
RESTRICTED CASH (Note 4)
|
56,711
|
|
|
696
|
|
||
MARKETABLE SECURITIES (Notes 16 and 19)
|
14,773
|
|
|
12,882
|
|
||
CURRENT RECEIVABLES, NET (Note 6)
|
13,460
|
|
|
11,153
|
|
||
DEFERRED RENT RECEIVABLES, NET (Note 6)
|
218,977
|
|
|
189,704
|
|
||
DEFERRED LEASING COSTS AND ACQUISITION-RELATED INTANGIBLE ASSETS, NET (Notes 3 and 5)
|
208,368
|
|
|
176,683
|
|
||
PREPAID EXPENSES AND OTHER ASSETS, NET (Note 7)
|
70,608
|
|
|
27,233
|
|
||
TOTAL ASSETS
|
$
|
6,706,633
|
|
|
$
|
5,926,430
|
|
LIABILITIES AND CAPITAL
|
|
|
|
||||
LIABILITIES:
|
|
|
|
||||
Secured debt, net (Notes 9 and 19)
|
$
|
472,772
|
|
|
$
|
380,835
|
|
Unsecured debt, net (Notes 9 and 19)
|
1,847,351
|
|
|
1,844,634
|
|
||
Accounts payable, accrued expenses and other liabilities (Note 18)
|
202,391
|
|
|
246,323
|
|
||
Accrued distributions (Notes 14 and 29)
|
222,306
|
|
|
34,992
|
|
||
Deferred revenue and acquisition-related intangible liabilities, net (Notes 3, 5 and 10)
|
150,360
|
|
|
128,156
|
|
||
Rents received in advance and tenant security deposits
|
52,080
|
|
|
49,361
|
|
||
Liabilities and deferred revenue of real estate assets held for sale (Note 4)
|
56
|
|
|
7,543
|
|
||
Total liabilities
|
2,947,316
|
|
|
2,691,844
|
|
||
COMMITMENTS AND CONTINGENCIES (Note 18)
|
|
|
|
||||
CAPITAL (Notes 12 and 14):
|
|
|
|
||||
Partners’ Capital:
|
|
|
|
||||
6.875% Series G Cumulative Redeemable Preferred units, 4,000,000 units issued and
outstanding ($100,000 liquidation preference)
|
96,155
|
|
|
96,155
|
|
||
6.375% Series H Cumulative Redeemable Preferred units, 4,000,000 units issued and
outstanding ($100,000 liquidation preference)
|
96,256
|
|
|
96,256
|
|
||
Common units, 93,219,439 and 92,258,690 held by the general partner and 2,381,543 and 1,764,775 held by common limited partners issued and outstanding,
respectively
|
3,431,768
|
|
|
3,031,609
|
|
||
Total Partners’ Capital
|
3,624,179
|
|
|
3,224,020
|
|
||
Noncontrolling interests in consolidated property partnerships and subsidiaries (Notes 2 and 12)
|
135,138
|
|
|
10,566
|
|
||
Total capital
|
3,759,317
|
|
|
3,234,586
|
|
||
TOTAL LIABILITIES AND CAPITAL
|
$
|
6,706,633
|
|
|
$
|
5,926,430
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
REVENUES:
|
|
|
|
|
|
||||||
Rental income
|
$
|
574,413
|
|
|
$
|
525,355
|
|
|
$
|
466,328
|
|
Tenant reimbursements
|
61,079
|
|
|
53,774
|
|
|
46,717
|
|
|||
Other property income (Notes 18 and 20)
|
7,080
|
|
|
2,146
|
|
|
8,680
|
|
|||
Total revenues
|
642,572
|
|
|
581,275
|
|
|
521,725
|
|
|||
EXPENSES:
|
|
|
|
|
|
|
|||||
Property expenses
|
113,932
|
|
|
105,378
|
|
|
100,514
|
|
|||
Real estate taxes
|
55,206
|
|
|
50,223
|
|
|
45,197
|
|
|||
Provision for bad debts
|
—
|
|
|
545
|
|
|
58
|
|
|||
Ground leases (Notes 5 and 18)
|
3,439
|
|
|
3,096
|
|
|
3,075
|
|
|||
General and administrative expenses
|
57,029
|
|
|
48,265
|
|
|
46,152
|
|
|||
Acquisition-related expenses
|
1,902
|
|
|
497
|
|
|
1,479
|
|
|||
Depreciation and amortization (Notes 2 and 5)
|
217,234
|
|
|
204,294
|
|
|
202,417
|
|
|||
Total expenses
|
448,742
|
|
|
412,298
|
|
|
398,892
|
|
|||
OTHER (EXPENSES) INCOME:
|
|
|
|
|
|
|
|||||
Interest income and other net investment gains (losses) (Note 19)
|
1,764
|
|
|
243
|
|
|
561
|
|
|||
Interest expense (Note 9)
|
(55,803
|
)
|
|
(57,682
|
)
|
|
(67,571
|
)
|
|||
Total other (expenses) income
|
(54,039
|
)
|
|
(57,439
|
)
|
|
(67,010
|
)
|
|||
INCOME FROM CONTINUING OPERATIONS BEFORE GAINS ON SALES OF REAL ESTATE
|
139,791
|
|
|
111,538
|
|
|
55,823
|
|
|||
Net (loss) gain on sales of land (Note 4)
|
(295
|
)
|
|
17,116
|
|
|
3,490
|
|
|||
Gains on sales of depreciable operating properties (Note 4)
|
164,302
|
|
|
109,950
|
|
|
—
|
|
|||
INCOME FROM CONTINUING OPERATIONS
|
303,798
|
|
|
238,604
|
|
|
59,313
|
|
|||
DISCONTINUED OPERATIONS (Note 21)
|
|
|
|
|
|
||||||
Income from discontinued operations
|
—
|
|
|
—
|
|
|
2,573
|
|
|||
Net gain on dispositions of discontinued operations
|
—
|
|
|
—
|
|
|
121,922
|
|
|||
Total income from discontinued operations
|
—
|
|
|
—
|
|
|
124,495
|
|
|||
NET INCOME
|
303,798
|
|
|
238,604
|
|
|
183,808
|
|
|||
Net income attributable to noncontrolling interests in consolidated property partnerships and subsidiaries (Notes 2 and 12)
|
(3,735
|
)
|
|
(467
|
)
|
|
(260
|
)
|
|||
NET INCOME ATTRIBUTABLE TO KILROY REALTY, L.P.
|
300,063
|
|
|
238,137
|
|
|
183,548
|
|
|||
PREFERRED DISTRIBUTIONS (NOTE 14)
|
(13,250
|
)
|
|
(13,250
|
)
|
|
(13,250
|
)
|
|||
NET INCOME AVAILABLE TO COMMON UNITHOLDERS
|
$
|
286,813
|
|
|
$
|
224,887
|
|
|
$
|
170,298
|
|
Income from continuing operations available to common unitholders per unit – basic
(Note 23)
|
$
|
2.99
|
|
|
$
|
2.44
|
|
|
$
|
0.52
|
|
Income from continuing operations available to common unitholders per unit – diluted
(Note 23)
|
$
|
2.96
|
|
|
$
|
2.42
|
|
|
$
|
0.51
|
|
Net income available to common unitholders per unit – basic (Note 23)
|
$
|
2.99
|
|
|
$
|
2.44
|
|
|
$
|
1.99
|
|
Net income available to common unitholders per unit – diluted (Note 23)
|
$
|
2.96
|
|
|
$
|
2.42
|
|
|
$
|
1.94
|
|
Weighted average common units outstanding – basic (Note 23)
|
94,771,688
|
|
|
91,645,578
|
|
|
84,894,498
|
|
|||
Weighted average common units outstanding – diluted (Note 23)
|
95,452,239
|
|
|
92,187,257
|
|
|
86,771,983
|
|
|
Partners’ Capital
|
|
Total Partners’ Capital
|
|
Noncontrolling Interests in Consolidated Property Partnerships and Subsidiaries
|
|
|
|||||||||||||||
|
Preferred Units
|
|
Number of Common Units
|
|
Common Units
|
|
|
|
Total Capital
|
|||||||||||||
BALANCE AS OF DECEMBER 31, 2013
|
$
|
192,411
|
|
|
83,959,144
|
|
|
$
|
2,315,361
|
|
|
$
|
2,507,772
|
|
|
$
|
8,388
|
|
|
$
|
2,516,160
|
|
Net income
|
|
|
|
|
183,548
|
|
|
183,548
|
|
|
260
|
|
|
183,808
|
|
|||||||
Issuance of common units
|
|
|
1,950,599
|
|
|
123,860
|
|
|
123,860
|
|
|
|
|
123,860
|
|
|||||||
Issuance of share-based compensation awards
|
|
|
|
|
1,692
|
|
|
1,692
|
|
|
|
|
1,692
|
|
||||||||
Non-cash amortization of share-based compensation
|
|
|
|
|
14,471
|
|
|
14,471
|
|
|
|
|
14,471
|
|
||||||||
Exercise of stock options
|
|
|
495,000
|
|
|
21,092
|
|
|
21,092
|
|
|
|
|
21,092
|
|
|||||||
Repurchase of common units and restricted stock units
|
|
|
(58,045
|
)
|
|
(3,533
|
)
|
|
(3,533
|
)
|
|
|
|
(3,533
|
)
|
|||||||
Settlement of restricted stock units
|
|
|
141,205
|
|
|
(1
|
)
|
|
(1
|
)
|
|
|
|
(1
|
)
|
|||||||
Shares of common stock issued in connection with settlement of 4.25% Exchangeable Senior Notes
|
|
|
2,091,323
|
|
|
223
|
|
|
223
|
|
|
|
|
223
|
|
|||||||
Shares of common stock received in connection with capped call option transactions
|
|
|
(515,342
|
)
|
|
|
|
—
|
|
|
|
|
—
|
|
||||||||
Contribution by noncontrolling interest in consolidated subsidiary
|
|
|
|
|
|
|
|
|
977
|
|
|
977
|
|
|||||||||
Preferred distributions
|
|
|
|
|
(13,250
|
)
|
|
(13,250
|
)
|
|
|
|
(13,250
|
)
|
||||||||
Distributions declared per common unit ($1.40 per unit)
|
|
|
|
|
(121,563
|
)
|
|
(121,563
|
)
|
|
|
|
(121,563
|
)
|
||||||||
BALANCE AS OF DECEMBER 31, 2014
|
192,411
|
|
|
88,063,884
|
|
|
2,521,900
|
|
|
2,714,311
|
|
|
9,625
|
|
|
2,723,936
|
|
|||||
Net income
|
|
|
|
|
238,137
|
|
|
238,137
|
|
|
467
|
|
|
238,604
|
|
|||||||
Issuance of common units
|
|
|
5,640,033
|
|
|
387,398
|
|
|
387,398
|
|
|
|
|
387,398
|
|
|||||||
Issuance of share-based compensation awards
|
|
|
|
|
1,692
|
|
|
1,692
|
|
|
|
|
1,692
|
|
||||||||
Non-cash amortization of share-based compensation
|
|
|
|
|
18,869
|
|
|
18,869
|
|
|
|
|
18,869
|
|
||||||||
Exercise of stock options
|
|
|
342,000
|
|
|
14,573
|
|
|
14,573
|
|
|
|
|
14,573
|
|
|||||||
Repurchase of common units and restricted stock units
|
|
|
(101,389
|
)
|
|
(7,081
|
)
|
|
(7,081
|
)
|
|
|
|
(7,081
|
)
|
|||||||
Settlement of restricted stock units
|
|
|
78,937
|
|
|
(1
|
)
|
|
(1
|
)
|
|
|
|
(1
|
)
|
|||||||
Contribution by noncontrolling interest in consolidated subsidiary
|
|
|
|
|
|
|
|
|
474
|
|
|
474
|
|
|||||||||
Preferred distributions
|
|
|
|
|
(13,250
|
)
|
|
(13,250
|
)
|
|
|
|
(13,250
|
)
|
||||||||
Distributions declared per common unit ($1.40 per unit)
|
|
|
|
|
(130,628
|
)
|
|
(130,628
|
)
|
|
|
|
(130,628
|
)
|
||||||||
BALANCE AS OF DECEMBER 31, 2015
|
192,411
|
|
|
94,023,465
|
|
|
3,031,609
|
|
|
3,224,020
|
|
|
10,566
|
|
|
3,234,586
|
|
|||||
Net income
|
|
|
|
|
300,063
|
|
|
300,063
|
|
|
3,735
|
|
|
303,798
|
|
|||||||
Issuance of common units (Note 14)
|
|
|
451,398
|
|
|
31,117
|
|
|
31,117
|
|
|
|
|
31,117
|
|
|||||||
Issuance of common units in connection with acquisition (Note 3)
|
|
|
867,701
|
|
|
48,033
|
|
|
48,033
|
|
|
|
|
48,033
|
|
|||||||
Issuance of share-based compensation awards (Note 15)
|
|
|
|
|
1,827
|
|
|
1,827
|
|
|
|
|
1,827
|
|
||||||||
Non-cash amortization of share-based compensation
(Note 15)
|
|
|
|
|
26,624
|
|
|
26,624
|
|
|
|
|
26,624
|
|
||||||||
Exercise of stock options (Note 15)
|
|
|
286,500
|
|
|
12,208
|
|
|
12,208
|
|
|
|
|
12,208
|
|
|||||||
Repurchase of common units and restricted stock units (Note 15)
|
|
|
(137,126
|
)
|
|
(8,875
|
)
|
|
(8,875
|
)
|
|
|
|
(8,875
|
)
|
|||||||
Settlement of restricted stock units (Note 15)
|
|
|
109,044
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|||||||
Initial contributions from noncontrolling interest in consolidated property partnership, net of transaction costs (Note 12)
|
|
|
|
|
328,997
|
|
|
328,997
|
|
|
124,452
|
|
|
453,449
|
|
|||||||
Distributions to noncontrolling interests in consolidated property partnerships
|
|
|
|
|
|
|
|
|
(3,615
|
)
|
|
(3,615
|
)
|
|||||||||
Preferred distributions
|
|
|
|
|
(13,250
|
)
|
|
(13,250
|
)
|
|
|
|
(13,250
|
)
|
||||||||
Distributions declared per common unit ($3.375 per unit)
|
|
|
|
|
(326,585
|
)
|
|
(326,585
|
)
|
|
|
|
(326,585
|
)
|
||||||||
BALANCE AS OF DECEMBER 31, 2016
|
$
|
192,411
|
|
|
95,600,982
|
|
|
$
|
3,431,768
|
|
|
$
|
3,624,179
|
|
|
$
|
135,138
|
|
|
$
|
3,759,317
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
||||||
Net income
|
$
|
303,798
|
|
|
$
|
238,604
|
|
|
$
|
183,808
|
|
Adjustments to reconcile net income to net cash provided by operating activities (including discontinued operations):
|
|
|
|
|
|
||||||
Depreciation and amortization of real estate assets and leasing costs
|
213,156
|
|
|
201,482
|
|
|
202,108
|
|
|||
Depreciation of non-real estate furniture, fixtures and equipment
|
4,078
|
|
|
2,812
|
|
|
2,370
|
|
|||
Increase in provision for bad debts
|
—
|
|
|
545
|
|
|
58
|
|
|||
Non-cash amortization of share-based compensation awards (Note 15)
|
21,064
|
|
|
15,537
|
|
|
12,095
|
|
|||
Non-cash amortization of deferred financing costs and debt discounts and premiums
|
2,720
|
|
|
1,853
|
|
|
4,315
|
|
|||
Non-cash amortization of net below market rents (Note 5)
|
(7,166
|
)
|
|
(8,449
|
)
|
|
(8,328
|
)
|
|||
Gains on sales of depreciable operating properties (Note 4)
|
(164,302
|
)
|
|
(109,950
|
)
|
|
—
|
|
|||
Gains on sales of discontinued operations (Note 21)
|
—
|
|
|
—
|
|
|
(121,922
|
)
|
|||
Loss (gain) on sales of land (Note 4)
|
295
|
|
|
(17,116
|
)
|
|
(3,490
|
)
|
|||
Non-cash amortization of deferred revenue related to tenant-funded tenant improvements (Note 10)
|
(13,244
|
)
|
|
(13,338
|
)
|
|
(10,979
|
)
|
|||
Straight-line rents
|
(29,629
|
)
|
|
(44,383
|
)
|
|
(31,782
|
)
|
|||
Net change in other operating assets
|
(5,214
|
)
|
|
(8,085
|
)
|
|
367
|
|
|||
Net change in other operating liabilities
|
19,498
|
|
|
12,496
|
|
|
16,633
|
|
|||
Net cash provided by operating activities
|
345,054
|
|
|
272,008
|
|
|
245,253
|
|
|||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
||||||
Expenditures for development properties and undeveloped land
|
(351,012
|
)
|
|
(407,969
|
)
|
|
(417,784
|
)
|
|||
Expenditures for acquisitions of development properties and undeveloped land (Note 3)
|
(33,513
|
)
|
|
(139,073
|
)
|
|
(147,182
|
)
|
|||
Expenditures for acquisitions of operating properties (Note 3)
|
(393,767
|
)
|
|
—
|
|
|
(204,546
|
)
|
|||
Expenditures for operating properties and other capital assets
|
(111,961
|
)
|
|
(99,557
|
)
|
|
(132,080
|
)
|
|||
Net proceeds received from dispositions (Notes 4 and 21)
|
325,031
|
|
|
319,639
|
|
|
427,544
|
|
|||
(Increase) decrease in restricted cash (Note 4)
|
(56,015
|
)
|
|
65,210
|
|
|
(25,405
|
)
|
|||
Issuance of notes receivable (Note 7)
|
(16,100
|
)
|
|
(3,000
|
)
|
|
—
|
|
|||
Decrease (increase) in acquisition-related deposits
|
1,902
|
|
|
1,998
|
|
|
(1,983
|
)
|
|||
Net cash used in investing activities
|
(635,435
|
)
|
|
(262,752
|
)
|
|
(501,436
|
)
|
|||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
||||||
Borrowings on unsecured revolving credit facility
|
305,000
|
|
|
250,000
|
|
|
505,000
|
|
|||
Repayments on unsecured revolving credit facilty
|
(305,000
|
)
|
|
(390,000
|
)
|
|
(410,000
|
)
|
|||
Proceeds from the issuance of secured debt (Note 9)
|
170,000
|
|
|
—
|
|
|
—
|
|
|||
Principal payments and repayments of secured debt (Note 9)
|
(74,140
|
)
|
|
(159,766
|
)
|
|
(9,845
|
)
|
|||
Net proceeds from the issuance of unsecured debt (Note 9)
|
—
|
|
|
397,776
|
|
|
395,528
|
|
|||
Repayments of unsecured debt (Note 9)
|
—
|
|
|
(325,000
|
)
|
|
(83,000
|
)
|
|||
Repayments of exchangeable senior notes (Note 9)
|
—
|
|
|
—
|
|
|
(172,500
|
)
|
|||
Borrowings on unsecured debt (Note 9)
|
—
|
|
|
—
|
|
|
39,000
|
|
|||
Financing costs
|
(2,159
|
)
|
|
(4,814
|
)
|
|
(8,648
|
)
|
|||
Net proceeds from issuance of common units (Note 14)
|
31,117
|
|
|
387,398
|
|
|
102,229
|
|
|||
Proceeds from exercise of stock options (Note 15)
|
12,208
|
|
|
14,573
|
|
|
21,092
|
|
|||
Repurchase of common units and restricted stock units (Note 14)
|
(8,875
|
)
|
|
(7,081
|
)
|
|
(3,533
|
)
|
|||
Contributions from noncontrolling interests in consolidated property partnerships (Notes 2 and 12)
|
453,449
|
|
|
474
|
|
|
977
|
|
|||
Distributions to noncontrolling interests in consolidated property partnerships
|
(3,615
|
)
|
|
—
|
|
|
—
|
|
|||
Distributions paid to common unitholders
|
(137,444
|
)
|
|
(126,839
|
)
|
|
(118,463
|
)
|
|||
Distributions paid to preferred unitholders
|
(13,250
|
)
|
|
(13,250
|
)
|
|
(13,250
|
)
|
|||
Net cash provided by financing activities
|
427,291
|
|
|
23,471
|
|
|
244,587
|
|
|||
Net increase (decrease) in cash and cash equivalents
|
136,910
|
|
|
32,727
|
|
|
(11,596
|
)
|
|||
Cash and cash equivalents, beginning of year
|
56,508
|
|
|
23,781
|
|
|
35,377
|
|
|||
Cash and cash equivalents, end of year
|
$
|
193,418
|
|
|
$
|
56,508
|
|
|
$
|
23,781
|
|
1.
|
Organization and Ownership
|
|
Number of
Buildings
|
|
Rentable
Square Feet (unaudited)
|
|
Number of
Tenants
|
|
Percentage
Occupied
(unaudited)
|
|
Percentage Leased
(unaudited)
|
|||||
Stabilized Office Properties
|
108
|
|
|
14,025,856
|
|
|
549
|
|
|
96.0
|
%
|
|
97.0
|
%
|
|
Number of
Buildings |
|
Number of Units
|
|
Percentage
Occupied
(unaudited)
|
|
Percentage Leased
(unaudited)
|
||||
Stabilized Residential Property
|
1
|
|
|
200
|
|
|
46.0
|
%
|
|
56.5
|
%
|
|
Number of
Properties/Projects
|
|
Estimated Office Rentable
Square Feet (unaudited)
|
|
Properties held for sale
(1)
|
1
|
|
67,995
|
|
Development project in
“
lease-up"
(2)
|
1
|
|
377,000
|
|
Development projects under construction
(2)(3)
|
3
|
|
1,100,000
|
|
(1)
|
See Note 4 “Dispositions and Real Estate Assets Held for Sale” for additional information.
|
(2)
|
Estimated rentable square feet upon completion.
|
(3)
|
Development projects under construction also include
96,000
square feet of retail space and
237
residential units in addition to the estimated office rentable square feet noted above.
|
2.
|
Basis of Presentation and Significant Accounting Policies
|
•
|
For office development and redevelopment properties that are pre-leased, we cease capitalization when revenue recognition commences, which is upon substantial completion of tenant improvements deemed to be the Company's asset for accounting purposes.
|
•
|
For office development and redevelopment properties that are not pre-leased, we may not immediately build out the tenant improvements. Therefore, we cease capitalization when revenue recognition commences upon substantial completion of the tenant improvements deemed to be the Company's asset for accounting purposes, but in any event, no later than one year after the cessation of major construction activities. We also cease capitalization on a development or redevelopment property when activities necessary to prepare the property for its intended use have been suspended.
|
•
|
For office development or redevelopment properties with multiple tenants and staged leasing, we cease capitalization and begin depreciation on the portion of the development or redevelopment property for which revenue recognition has commenced.
|
•
|
For residential development properties, we cease capitalization when the property is substantially complete and available for occupancy.
|
Asset Description
|
|
Depreciable Lives
|
Buildings and improvements
|
|
25 – 40 years
|
Tenant improvements
|
|
1 – 20 years
(1)
|
(1)
|
Tenant improvements are amortized over the shorter of the lease term or the estimated useful life.
|
•
|
Level 1 –
quoted prices for identical instruments in active markets;
|
•
|
Level 2 –
quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active and model-derived valuations in which significant inputs and significant value drivers are observable in active markets; and
|
•
|
Level 3 –
fair value measurements derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
|
3.
|
Acquisitions
|
Property
|
|
Date of Acquisition
|
|
Number of Buildings
|
|
Rentable Square Feet (unaudited)
|
|
Occupancy as of December 31, 2016 (unaudited)
|
|
Purchase Price (in millions)
(1)
|
|||
2016 Acquisitions
|
|
|
|
|
|
|
|
|
|
|
|||
1290-1300 Terra Bella Avenue, Mountain View, CA
(2)
|
|
June 8, 2016
|
|
1
|
|
114,175
|
|
|
100.0%
|
|
$
|
55.4
|
|
8560-8590 West Sunset Blvd., West Hollywood, CA
(3)
|
|
December 7, 2016
|
|
4
|
|
178,699
|
|
|
87.5%
|
|
209.2
|
|
|
1701 Page Mill Rd. and 3150 Porter Dr., Palo Alto, CA
(4)
|
|
December 19, 2016
|
|
2
|
|
165,585
|
|
|
100.0%
|
|
130.0
|
|
|
Total
(5)
|
|
|
|
7
|
|
458,459
|
|
|
|
|
$
|
394.6
|
|
(1)
|
Excludes acquisition-related costs and non-lease related accrued liabilities assumed. Includes assumed unpaid leasing commissions and tenant improvements.
|
(2)
|
In connection with this acquisition, the Company assumed
$0.2 million
in accrued liabilities that are not included in the purchase price above.
|
(3)
|
This acquisition encompasses a 10-story office tower, three retail buildings, a four-level subterranean parking structure and three billboards. As of
December 31, 2016
, this property was temporarily being held in a separate VIE to facilitate potential Section 1031 Exchanges. During January 2017, the Company closed out the Section 1031 Exchange related to this VIE. See Note 2 “Basis of Presentation and Significant Accounting Policies.” In connection with this acquisition, the Company assumed
$0.1 million
in accrued liabilities that are not included in the purchase price above.
|
(4)
|
In connection with this acquisition, the Company entered into a long-term ground lease expiring in December 2067.
|
(5)
|
The results of operations for the properties acquired during 2016 contributed
$5.2 million
and
$1.7 million
to revenue and net income from continuing operations, respectively, for the year ended
December 31, 2016
.
|
Acquisitions
|
Total 2016
Acquisitions
(1)
|
||
|
|
||
Assets
|
(in thousands)
|
||
Land and improvements
|
$
|
120,110
|
|
Buildings and improvements
(2)
|
259,301
|
|
|
Deferred leasing costs and acquisition-related intangible assets
(3)
|
33,529
|
|
|
Total assets acquired
|
412,940
|
|
|
Liabilities
|
|
||
Accounts payable, accrued expenses and other liabilities
|
1,122
|
|
|
Deferred revenue and acquisition-related intangible liabilities
(4)
|
18,050
|
|
|
Total liabilities assumed
|
19,172
|
|
|
Net assets and liabilities acquired
|
$
|
393,768
|
|
(1)
|
The purchase price of the three acquisitions completed during the year ended
December 31, 2016
were individually less than 5% and in aggregate less than 10% of the Company’s total assets as of
December 31, 2015
.
|
(2)
|
Represents buildings, building improvements and tenant improvements.
|
(3)
|
Represents in-place leases (approximately
$27.1 million
with a weighted average amortization period of
3.9
years), above-market leases (approximately
$0.6 million
with weighted average amortization period of
15.8
years) and leasing commissions (approximately
$5.8 million
with a weighted average amortization period of
5.1
years).
|
(4)
|
Represents below-market leases (approximately
$18.1 million
with a weighted average amortization period of
8.4
years)
|
Project
|
|
Date of
Acquisition
|
|
City/Submarket
|
|
Type
|
|
Purchase Price
(1)
(in millions)
|
||
2015 Acquisitions
|
|
|
|
|
|
|
|
|
||
333 Dexter
(2)
|
|
February 13, 2015
|
|
Seattle, WA
|
|
Land
|
|
$
|
49.5
|
|
100 Hooper
(3)
|
|
July 7, 2015
|
|
San Francisco, CA
|
|
Land
|
|
78.0
|
|
|
Total
|
|
|
|
|
|
|
|
$
|
127.5
|
|
(1)
|
See Note 18 “Commitments and Contingencies” for additional information on certain accrued liabilities for these acquisitions.
|
(2)
|
Acquisition comprised of four adjacent parcels in the South Lake Union submarket of Seattle, Washington located at 330 Dexter Avenue North, 333 Dexter Avenue North, 401 Dexter Avenue North, and 400 Aurora Avenue North. In connection with this acquisition, we also assumed
$2.4 million
in accrued liabilities and acquisition costs that are not included in the purchase price above.
|
(3)
|
Includes the land parcel located at 150 Hooper. In connection with this acquisition, we assumed
$4.1 million
in accrued liabilities and acquisition costs that are not included in the purchase price above.
|
Location
|
|
Month of Disposition
|
|
Number of Buildings
|
|
Rentable
Square Feet (unaudited)
|
|
Sales Price
(in millions)
(1)
|
|||
2016 Dispositions
|
|
|
|
|
|
|
|
|
|||
Torrey Santa Fe Properties
(2)
|
|
January
|
|
4
|
|
465,812
|
|
|
$
|
262.3
|
|
4930, 4939 & 4955 Directors Place, San Diego, CA
(3)
|
|
July
|
|
2
|
|
136,908
|
|
|
49.0
|
|
|
Total 2016 Dispositions
|
|
|
|
6
|
|
602,720
|
|
|
$
|
311.3
|
|
|
|
|
|
|
|
|
|
|
|||
2015 Dispositions
|
|
|
|
|
|
|
|
|
|||
15050 NE 36th Street, Redmond, WA
|
|
April
|
|
1
|
|
122,103
|
|
|
$
|
51.2
|
|
San Diego Properties - Tranches 1 and 2
(4)
|
|
April/July
|
|
9
|
|
924,291
|
|
|
258.0
|
|
|
Total 2015 Dispositions
|
|
|
|
10
|
|
1,046,394
|
|
|
$
|
309.2
|
|
|
|
|
|
|
|
|
|
|
|||
2014 Dispositions
(5)
|
|
|
|
|
|
|
|
|
|||
San Diego Properties, San Diego, CA
(6)
|
|
January
|
|
12
|
|
1,049,035
|
|
|
$
|
294.7
|
|
9785 & 9791 Towne Centre Drive, San Diego, CA
|
|
June
|
|
2
|
|
126,000
|
|
|
29.5
|
|
|
111 Pacifica, Irvine, CA
|
|
September
|
|
1
|
|
67,496
|
|
|
15.1
|
|
|
4040 Civic Center Drive, San Rafael, CA
|
|
October
|
|
1
|
|
130,237
|
|
|
34.9
|
|
|
999 Town & Country Road, Orange, CA
|
|
December
|
|
1
|
|
98,551
|
|
|
25.3
|
|
|
Total 2014 Dispositions
|
|
|
|
17
|
|
1,471,319
|
|
|
$
|
399.5
|
|
(1)
|
Represents gross sales price before the impact of broker commissions and closing costs.
|
(2)
|
The Torrey Santa Fe Properties include the following properties: 7525 Torrey Santa Fe, 7535 Torrey Santa Fe, 7545 Torrey Santa Fe and 7555 Torrey Santa Fe. These properties were classified as held for sale at
December 31, 2015
.
|
(3)
|
Includes two operating properties totaling
136,908
rentable square feet and a
7.0
acre undeveloped land parcel.
|
(4)
|
The San Diego Properties - Tranche 1 includes the following properties: 10770 Wateridge Circle, 6200 Greenwich Drive and 6220 Greenwich Drive. The San Diego Properties - Tranche 2 includes the following properties: 6260 Sequence Drive, 6290, Sequence Drive, 6310 Sequence Drive, 6340 Sequence Drive, 6350 Sequence Drive and 4921 Directors Place.
|
(5)
|
The Company adopted ASU 2014-08 effective January 1, 2015 (see Note 2 “Basis of Presentation and Significant Accounting Policies” for additional information). As a result, results of operations for properties disposed of subsequent of January 1, 2015 are presented in continuing operations because they did not represent strategic shifts. Properties disposed of prior to January 1, 2015 are presented in discontinued operations.
|
(6)
|
The San Diego Properties included the following properties: 10020 Pacific Mesa Boulevard, 6055 Lusk Avenue, 5010 and 5005 Wateridge Vista Drive, 15435 and 15445 Innovation Drive, and 15051, 15073, 15231, 15253, 15333 and 15378 Avenue of Science. These properties were held for sale as of December 31, 2013.
|
Properties
|
|
Submarket
|
|
Property Type
|
|
Number of Buildings
|
|
Rentable Square Feet (unaudited)
|
|
2016 Held for Sale
|
|
|
|
|
|
|
|
|
|
5717 Pacific Center Drive
(1)
|
|
Sorrento Mesa
|
|
Office
|
|
1
|
|
67,995
|
|
|
|
|
|
|
|
|
|
|
|
2015 Held for Sale
|
|
|
|
|
|
|
|
|
|
Torrey Santa Fe Properties
(2)(3)
|
|
Del Mar
|
|
Office
|
|
4
|
|
465,812
|
|
(1)
|
In January 2017, the Company completed the sale of this property for a total sales price of
$12.1 million
.
|
(2)
|
The Torrey Santa Fe Properties include the following properties: 7525 Torrey Santa Fe, 7535 Torrey Santa Fe, 7545 Torrey Santa Fe, and 7555 Torrey Santa Fe.
|
(3)
|
In January 2016, the Company completed the sale of these properties for a total sales price of
$262.3 million
.
|
|
December 31, 2016
|
|
December 31, 2015
|
||||
Real estate assets and other assets held for sale
|
(in thousands)
|
||||||
Land and improvements
|
$
|
2,693
|
|
|
$
|
10,534
|
|
Buildings and improvements
|
10,500
|
|
|
144,716
|
|
||
Undeveloped land and construction in progress
|
—
|
|
|
4,824
|
|
||
Total real estate held for sale
|
13,193
|
|
|
160,074
|
|
||
Accumulated depreciation and amortization
|
(3,900
|
)
|
|
(46,191
|
)
|
||
Total real estate held for sale, net
|
9,293
|
|
|
113,883
|
|
||
Deferred rent receivables, net
|
—
|
|
|
2,500
|
|
||
Deferred leasing costs and acquisition-related intangible assets, net
|
—
|
|
|
1,115
|
|
||
Prepaid expenses and other assets, net
|
124
|
|
|
168
|
|
||
Real estate and other assets held for sale, net
|
$
|
9,417
|
|
|
$
|
117,666
|
|
|
|
|
|
||||
Liabilities and deferred revenue of real estate assets held for sale
|
|
|
|
||||
Secured debt
|
$
|
—
|
|
|
$
|
561
|
|
Accounts payable, accrued expenses and other liabilities
|
56
|
|
|
2,497
|
|
||
Deferred revenue and acquisition-related intangible liabilities, net
|
—
|
|
|
2,899
|
|
||
Rents received in advance and tenant security deposits
|
—
|
|
|
1,586
|
|
||
Liabilities and deferred revenue of real estate assets held for sale
|
$
|
56
|
|
|
$
|
7,543
|
|
Properties
|
|
Submarket
|
|
Month of Disposition
|
|
Gross Site Acreage
(unaudited)
|
|
Sales Price
(1)
(in millions)
|
||
2016 Land Dispositions
|
|
|
|
|
|
|
|
|
||
Carlsbad Oaks - Lot 7
(2)
|
|
Carlsbad
|
|
January
|
|
7.6
|
|
$
|
4.5
|
|
Carlsbad Oaks - Lots 4 & 5
|
|
Carlsbad
|
|
June
|
|
11.2
|
|
6.0
|
|
|
Carlsbad Oaks - Lot 8
|
|
Carlsbad
|
|
June
|
|
13.2
|
|
8.9
|
|
|
Total 2016 Land Dispositions
(3)(4)
|
|
|
|
|
|
32.0
|
|
$
|
19.4
|
|
|
|
|
|
|
|
|
|
|
||
2015 Land Disposition
|
|
|
|
|
|
|
|
|
||
17150 Von Karman
(4)
|
|
Irvine
|
|
January
|
|
8.5
|
|
$
|
26.0
|
|
|
|
|
|
|
|
|
|
|
||
2014 Land Disposition
|
|
|
|
|
|
|
|
|
||
10850 Via Frontera
(4)
|
|
Rancho Bernardo
|
|
April
|
|
21.0
|
|
$
|
33.1
|
|
(1)
|
Represents gross sales price before the impact of commissions and closing costs.
|
(2)
|
This land parcel was classified as held for sale as of December 31, 2015.
|
(3)
|
In connection with these land dispositions,
$2.3 million
of secured debt was assumed by the buyers. See Note 9 “Secured and Unsecured Debt of the Operating Partnership” for additional information.
|
(4)
|
The 2016 land dispositions resulted in a net loss on sales of
$0.3 million
and the 2015 and 2014 land dispositions resulted in gain on sales of
$17.3 million
and
$3.5 million
, respectively.
|
Properties
|
|
Submarket
|
|
Gross Site Acreage
(unaudited)
|
|
Sales Price
(in millions) |
||
2015 Held for Sale
|
|
|
|
|
|
|
||
Carlsbad Oaks - Lot 7
(1)
|
|
Carlsbad
|
|
7.6
|
|
$
|
4.5
|
|
|
|
|
|
|
|
|
(1)
|
During the year ended December 31, 2015, the Company recognized a loss relating to selling costs of approximately
$0.2 million
.
|
5.
|
Deferred Leasing Costs and Acquisition-related Intangible Assets and Liabilities, net
|
|
December 31, 2016
|
|
December 31, 2015
|
||||
|
(in thousands)
|
||||||
Deferred Leasing Costs and Acquisition-related Intangible Assets, net:
(1)
|
|
|
|
||||
Deferred leasing costs
|
$
|
239,958
|
|
|
$
|
205,888
|
|
Accumulated amortization
|
(89,633
|
)
|
|
(72,745
|
)
|
||
Deferred leasing costs, net
|
150,325
|
|
|
133,143
|
|
||
Above-market operating leases
|
10,304
|
|
|
10,989
|
|
||
Accumulated amortization
|
(6,933
|
)
|
|
(6,739
|
)
|
||
Above-market operating leases, net
|
3,371
|
|
|
4,250
|
|
||
In-place leases
|
94,813
|
|
|
72,639
|
|
||
Accumulated amortization
|
(40,593
|
)
|
|
(33,810
|
)
|
||
In-place leases, net
|
54,220
|
|
|
38,829
|
|
||
Below-market ground lease obligation
|
490
|
|
|
490
|
|
||
Accumulated amortization
|
(38
|
)
|
|
(29
|
)
|
||
Below-market ground lease obligation, net
|
452
|
|
|
461
|
|
||
Total deferred leasing costs and acquisition-related intangible assets, net
|
$
|
208,368
|
|
|
$
|
176,683
|
|
Acquisition-related Intangible Liabilities, net:
(2)
|
|
|
|
||||
Below-market operating leases
|
$
|
69,472
|
|
|
$
|
53,502
|
|
Accumulated amortization
|
(33,689
|
)
|
|
(27,074
|
)
|
||
Below-market operating leases, net
|
35,783
|
|
|
26,428
|
|
||
Above-market ground lease obligation
|
6,320
|
|
|
6,320
|
|
||
Accumulated amortization
|
(525
|
)
|
|
(424
|
)
|
||
Above-market ground lease obligation, net
|
5,795
|
|
|
5,896
|
|
||
Total acquisition-related intangible liabilities, net
|
$
|
41,578
|
|
|
$
|
32,324
|
|
(1)
|
Excludes deferred leasing costs and acquisition-related intangible assets, net related to properties held for sale as of
December 31, 2015
.
|
(2)
|
Included in deferred revenue and acquisition-related intangible liabilities, net in the consolidated balance sheets.
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in thousands)
|
||||||||||
Deferred leasing costs
(1)
|
$
|
28,639
|
|
|
$
|
27,866
|
|
|
$
|
27,555
|
|
Above-market operating leases
(2)
|
1,509
|
|
|
2,532
|
|
|
5,303
|
|
|||
In-place leases
(1)
|
11,676
|
|
|
14,622
|
|
|
21,628
|
|
|||
Below-market ground lease obligation
(3)
|
8
|
|
|
8
|
|
|
8
|
|
|||
Below-market operating leases
(4)
|
(8,674
|
)
|
|
(10,980
|
)
|
|
(13,238
|
)
|
|||
Above-market ground lease obligation
(5)
|
(101
|
)
|
|
(101
|
)
|
|
(101
|
)
|
|||
Total
|
$
|
33,057
|
|
|
$
|
33,947
|
|
|
$
|
41,155
|
|
(1)
|
The amortization of deferred leasing costs and in-place leases is recorded to depreciation and amortization expense and the amortization of lease incentives is recorded as a reduction to rental income in the consolidated statements of operations for the periods presented.
|
(2)
|
The amortization of above-market operating leases is recorded as a decrease to rental income in the consolidated statements of operations for the periods presented.
|
(3)
|
The amortization of the below-market ground lease obligation is recorded as an increase to ground lease expense in the consolidated statements of operations for the periods presented.
|
(4)
|
The amortization of below-market operating leases is recorded as an increase to rental income in the consolidated statements of operations for the periods presented.
|
(5)
|
The amortization of the above-market ground lease obligation is recorded as a decrease to ground lease expense in the consolidated statements of operations for the periods presented.
|
Year
|
Deferred Leasing Costs
|
|
Above-Market Operating Leases
(1)
|
|
In-Place Leases
|
|
Below-Market Ground Lease Obligation
(2)
|
|
Below-Market Operating Leases
(3)
|
|
Above-Market Ground Lease Obligation
(4)
|
||||||||||||
|
(in thousands)
|
||||||||||||||||||||||
2017
|
$
|
29,190
|
|
|
$
|
1,298
|
|
|
$
|
18,366
|
|
|
$
|
8
|
|
|
$
|
(10,633
|
)
|
|
$
|
(101
|
)
|
2018
|
25,761
|
|
|
869
|
|
|
13,556
|
|
|
8
|
|
|
(9,116
|
)
|
|
(101
|
)
|
||||||
2019
|
21,397
|
|
|
681
|
|
|
8,856
|
|
|
8
|
|
|
(6,519
|
)
|
|
(101
|
)
|
||||||
2020
|
16,703
|
|
|
53
|
|
|
5,739
|
|
|
8
|
|
|
(3,676
|
)
|
|
(101
|
)
|
||||||
2021
|
12,590
|
|
|
53
|
|
|
2,505
|
|
|
8
|
|
|
(1,031
|
)
|
|
(101
|
)
|
||||||
Thereafter
|
44,684
|
|
|
417
|
|
|
5,198
|
|
|
412
|
|
|
(4,808
|
)
|
|
(5,290
|
)
|
||||||
Total
|
$
|
150,325
|
|
|
$
|
3,371
|
|
|
$
|
54,220
|
|
|
$
|
452
|
|
|
$
|
(35,783
|
)
|
|
$
|
(5,795
|
)
|
(1)
|
Represents estimated annual amortization related to above-market operating leases. Amounts will be recorded as a decrease to rental income in the consolidated statements of operations.
|
(2)
|
Represents estimated annual amortization related to below-market ground lease obligations. Amounts will be recorded as an increase to ground lease expense in the consolidated statements of operations.
|
(3)
|
Represents estimated annual amortization related to below-market operating leases. Amounts will be recorded as an increase to rental income in the consolidated statements of operations.
|
(4)
|
Represents estimated annual amortization related to above-market ground lease obligations. Amounts will be recorded as a decrease to ground lease expense in the consolidated statements of operations.
|
6.
|
Receivables
|
|
December 31, 2016
|
|
December 31, 2015
|
||||
|
(in thousands)
|
||||||
Current receivables
|
$
|
15,172
|
|
|
$
|
13,233
|
|
Allowance for uncollectible tenant receivables
|
(1,712
|
)
|
|
(2,080
|
)
|
||
Current receivables, net
|
$
|
13,460
|
|
|
$
|
11,153
|
|
|
December 31, 2016
|
|
December 31, 2015
|
||||
|
(in thousands)
|
||||||
Deferred rent receivables
|
$
|
220,501
|
|
|
$
|
191,586
|
|
Allowance for deferred rent receivables
|
(1,524
|
)
|
|
(1,882
|
)
|
||
Deferred rent receivables, net
(1)
|
$
|
218,977
|
|
|
$
|
189,704
|
|
(1)
|
Excludes deferred rent receivables, net related to real estate held for sale as of December 31, 2015.
|
7.
|
Prepaid Expenses and Other Assets, Net
|
|
December 31, 2016
|
|
December 31, 2015
|
||||
|
(in thousands)
|
||||||
Furniture, fixtures and other long-lived assets, net
|
$
|
40,395
|
|
|
$
|
11,324
|
|
Notes receivable
(1)
|
19,439
|
|
|
3,056
|
|
||
Prepaid expenses
|
10,774
|
|
|
12,853
|
|
||
Total Prepaid Expenses and Other Assets, Net
|
$
|
70,608
|
|
|
$
|
27,233
|
|
(1)
|
Approximately
$15.1 million
of our notes receivables are secured by real estate.
|
•
|
95%
of the Operating Partnership’s consolidated funds from operations (as defined in the agreements governing the unsecured revolving credit facility, unsecured term loan facility and unsecured term loan) for such year; and
|
•
|
an amount which results in distributions to us (excluding any preferred partnership distributions to the extent the same have been deducted from consolidated funds from operations (as so defined) for such year) in an amount sufficient to permit us to pay dividends to our stockholders that we reasonably believe are necessary to (a) maintain our qualification as a REIT for federal and state income tax purposes and (b) avoid the payment of federal or state income or excise tax.
|
|
Annual Stated Interest Rate
(1)
|
|
GAAP
Effective Rate
(1)(2)
|
|
Maturity Date
|
|
December 31,
|
||||||
Type of Debt
|
|
|
|
2016
|
|
2015
|
|||||||
|
|
|
|
|
|
|
(in thousands)
|
||||||
Mortgage note payable
(3)
|
3.57%
|
|
3.57%
|
|
December 2026
|
|
$
|
170,000
|
|
|
$
|
—
|
|
Mortgage note payable
(4)
|
4.27%
|
|
4.27%
|
|
February 2018
|
|
125,756
|
|
|
128,315
|
|
||
Mortgage note payable
(4)
|
4.48%
|
|
4.48%
|
|
July 2027
|
|
94,754
|
|
|
96,354
|
|
||
Mortgage note payable
(4)(5)
|
6.05%
|
|
3.50%
|
|
June 2019
|
|
82,443
|
|
|
85,890
|
|
||
Mortgage note payable
(6)
|
7.15%
|
|
7.15%
|
|
May 2017
|
|
1,215
|
|
|
3,987
|
|
||
Mortgage note payable
(7)
|
6.51%
|
|
6.51%
|
|
February 2017
|
|
—
|
|
|
65,563
|
|
||
Other
(8)
|
Various
|
|
Various
|
|
Various
|
|
—
|
|
|
1,809
|
|
||
Total secured debt
|
|
|
|
|
|
|
$
|
474,168
|
|
|
$
|
381,918
|
|
Unamortized Deferred Financing Costs
|
|
|
|
|
|
|
(1,396
|
)
|
|
(1,083
|
)
|
||
Total secured debt, net
|
|
|
|
|
|
|
$
|
472,772
|
|
|
$
|
380,835
|
|
(1)
|
All interest rates presented are fixed-rate interest rates.
|
(2)
|
Represents the effective interest rate including the amortization of initial issuance discounts/premiums excluding the amortization of deferred financing costs.
|
(3)
|
This mortgage note payable was entered into in November 2016.
|
(4)
|
The secured debt and the related properties that secure the debt are held in a special purpose entity and the properties are not available to satisfy the debts and other obligations of the Company or the Operating Partnership.
|
(5)
|
As of
December 31, 2016
and
2015
, the mortgage loan had unamortized debt premiums of
$4.4 million
and
$6.2 million
, respectively.
|
(6)
|
This mortgage note payable was repaid in February 2017 at par.
|
(7)
|
This mortgage note payable was repaid in December 2016 at par.
|
(8)
|
Balance of
$1.8 million
as of
December 31, 2015
included public facility bonds that were assumed by the buyers in connection with sales of land during the year ended
December 31, 2016
.
|
|
|
|
|
|
|
|
|
|
Net Carrying Amount
as of December 31, |
||||||
|
Issuance date
|
|
Maturity date
|
|
Stated
coupon rate
|
|
Effective interest rate
(1)
|
|
2016
|
|
2015
|
||||
|
|
|
|
|
|
|
|
|
(in thousands)
|
||||||
4.375% Unsecured Senior Notes
(2)
|
September 2015
|
|
October 2025
|
|
4.375%
|
|
4.440%
|
|
$
|
400,000
|
|
|
$
|
400,000
|
|
Unamortized discount and deferred financing costs
|
|
|
|
|
|
|
|
|
(4,846
|
)
|
|
(5,400
|
)
|
||
Net carrying amount
|
|
|
|
|
|
|
|
|
$
|
395,154
|
|
|
$
|
394,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
4.250% Unsecured Senior Notes
(3)
|
July 2014
|
|
August 2029
|
|
4.250%
|
|
4.350%
|
|
$
|
400,000
|
|
|
$
|
400,000
|
|
Unamortized discount and deferred financing costs
|
|
|
|
|
|
|
|
|
(6,696
|
)
|
|
(7,228
|
)
|
||
Net carrying amount
|
|
|
|
|
|
|
|
|
$
|
393,304
|
|
|
$
|
392,772
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
3.800% Unsecured Senior Notes
(4)
|
January 2013
|
|
January 2023
|
|
3.800%
|
|
3.804%
|
|
$
|
300,000
|
|
|
$
|
300,000
|
|
Unamortized discount and deferred financing costs
|
|
|
|
|
|
|
|
|
(1,656
|
)
|
|
(1,931
|
)
|
||
Net carrying amount
|
|
|
|
|
|
|
|
|
$
|
298,344
|
|
|
$
|
298,069
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
4.800% Unsecured Senior Notes
(4)(5)
|
July 2011
|
|
July 2018
|
|
4.800%
|
|
4.827%
|
|
$
|
325,000
|
|
|
$
|
325,000
|
|
Unamortized discount and deferred financing costs
|
|
|
|
|
|
|
|
|
(767
|
)
|
|
(1,251
|
)
|
||
Net carrying amount
|
|
|
|
|
|
|
|
|
$
|
324,233
|
|
|
$
|
323,749
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
6.625% Unsecured Senior Notes
(6)
|
May 2010
|
|
June 2020
|
|
6.625%
|
|
6.743%
|
|
$
|
250,000
|
|
|
$
|
250,000
|
|
Unamortized discount and deferred financing costs
|
|
|
|
|
|
|
|
|
(1,868
|
)
|
|
(2,414
|
)
|
||
Net carrying amount
|
|
|
|
|
|
|
|
|
$
|
248,132
|
|
|
$
|
247,586
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total Unsecured Senior Notes, Net
|
|
|
|
|
|
|
|
|
$
|
1,659,167
|
|
|
$
|
1,656,776
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Represents the effective interest rate including the amortization of initial issuance discounts, excluding the amortization of deferred financing costs.
|
(2)
|
Interest on these notes is payable semi-annually in arrears on April 1st and October 1st of each year.
|
(3)
|
Interest on these notes is payable semi-annually in arrears on February 15th and August 15th of each year.
|
(4)
|
Interest on these notes is payable semi-annually in arrears on January 15th and July 15th of each year.
|
(5)
|
In October 2015, certain common limited partners in the Operating Partnership that previously contributed their interests in the property at 6255 W. Sunset Blvd., Los Angeles, California to the Operating Partnership entered into an agreement with the Company. Pursuant to this agreement, such common limited partners will reimburse the Company for a portion of any amounts the Company may be required to pay pursuant to its guarantee of the Operating Partnership's
4.800%
Senior Notes due 2018 or that the Company may otherwise become required to pay under applicable law with respect to such notes.
|
(6)
|
Interest on these notes is payable semi-annually in arrears on June 1st and December 1st of each year.
|
|
December 31, 2016
|
|
December 31, 2015
|
||||
|
(in thousands)
|
||||||
Outstanding borrowings
|
$
|
—
|
|
|
$
|
—
|
|
Remaining borrowing capacity
|
600,000
|
|
|
600,000
|
|
||
Total borrowing capacity
(1)
|
$
|
600,000
|
|
|
$
|
600,000
|
|
Interest rate
(2)
|
1.82
|
%
|
|
1.48
|
%
|
||
Facility fee-annual rate
(3)
|
0.200%
|
||||||
Maturity date
|
July 2019
|
(1)
|
We may elect to borrow, subject to bank approval and obtaining commitments for any additional borrowing capacity, up to an additional
$311.0 million
under an accordion feature under the terms of the unsecured revolving credit facility and unsecured term loan facility.
|
(2)
|
The interest rate on our unsecured revolving credit facility is based on an annual rate of LIBOR plus
1.050%
.
|
(3)
|
Our facility fee is paid on a quarterly basis and is calculated based on the total borrowing capacity. In addition to the facility fee, we incurred debt origination and legal costs. As of
December 31, 2016
and
2015
,
$3.3 million
and
$4.6 million
of deferred financing costs remained to be amortized through the maturity date of our unsecured revolving credit facility, which are included in prepaid expenses and other assets, net on our consolidated balance sheets.
|
(1)
|
As of
December 31, 2016
and
December 31, 2015
,
$0.7 million
and
$0.9 million
of unamortized deferred financing costs, respectively, remained to be amortized through the maturity date of our unsecured term loan facility.
|
(2)
|
Our unsecured term loan facility interest rate was calculated based on an annual rate of LIBOR plus
1.150%
.
|
Year
|
(in thousands)
|
||
2017
|
$
|
7,286
|
|
2018
|
451,669
|
|
|
2019
|
265,309
|
|
|
2020
|
255,137
|
|
|
2021
|
5,342
|
|
|
Thereafter
|
1,349,023
|
|
|
Total aggregate principal value
(1)(2)
|
$
|
2,333,766
|
|
(1)
|
Includes gross principal balance of outstanding debt before the effect of the following at
December 31, 2016
:
$11.5 million
of unamortized deferred financing costs,
$6.6 million
of unamortized discounts for the unsecured senior notes and
$4.4 million
of unamortized premiums for the secured debt.
|
(2)
|
Excludes the Series A and B Notes issuable pursuant to the Note Purchase Agreement entered into in September 2016 as no Series A or B Notes were issued and outstanding under these notes as of
December 31, 2016
.
|
|
Year Ended
December 31, 2014
|
||
|
|
||
Contractual interest payments
|
$
|
5,608
|
|
Amortization of discount
|
3,769
|
|
|
Interest expense attributable to the 4.25% Exchangeable Notes
|
$
|
9,377
|
|
|
Period Ended November 15, 2014
(1)
|
||
Per share average trading price of the Company's common stock
|
$
|
60.04
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in thousands)
|
||||||||||
Gross interest expense
|
$
|
105,263
|
|
|
$
|
109,647
|
|
|
$
|
114,661
|
|
Capitalized interest
|
(49,460
|
)
|
|
(51,965
|
)
|
|
(47,090
|
)
|
|||
Interest expense
|
$
|
55,803
|
|
|
$
|
57,682
|
|
|
$
|
67,571
|
|
10.
|
Deferred Revenue and Acquisition Related Liabilities, net
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(in thousands)
|
||||||
Deferred revenue related to tenant-funded tenant improvements
(1)
|
$
|
99,489
|
|
|
$
|
90,825
|
|
Other deferred revenue
|
9,293
|
|
|
5,007
|
|
||
Acquisition-related intangible liabilities, net
(2)
|
41,578
|
|
|
32,324
|
|
||
Total
|
$
|
150,360
|
|
|
$
|
128,156
|
|
(1)
|
Excludes deferred revenue related to tenant-funded tenant improvements related to properties held for sale at
December 31, 2015
.
|
(2)
|
See Note 2 “Basis of Presentation and Significant Accounting Policies” and Note 5 “Deferred Leasing Costs and Acquisition-related Intangible Assets and Liabilities, net” for additional information.
|
Year Ending
|
(in thousands)
|
||
2017
|
$
|
14,453
|
|
2018
|
13,891
|
|
|
2019
|
12,349
|
|
|
2020
|
11,767
|
|
|
2021
|
10,524
|
|
|
Thereafter
|
36,505
|
|
|
Total
|
$
|
99,489
|
|
13.
|
Stockholders’ Equity of the Company
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in millions, except share data)
|
||||||||||
Shares of common stock sold during the period
|
451,398
|
|
|
1,866,267
|
|
|
1,599,123
|
|
|||
Aggregate gross proceeds
|
$
|
32.3
|
|
|
$
|
140.1
|
|
|
$
|
104.7
|
|
Aggregate net proceeds after selling commissions
|
$
|
31.9
|
|
|
$
|
138.2
|
|
|
$
|
103.1
|
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(in thousands)
|
||||||
Dividends and Distributions payable to:
|
|
|
|
||||
Common stockholders
|
$
|
212,074
|
|
|
$
|
32,291
|
|
Noncontrolling common unitholders of the Operating Partnership
|
5,418
|
|
|
618
|
|
||
RSU holders
(1)
|
3,158
|
|
|
427
|
|
||
Total accrued dividends and distribution to common stockholders and noncontrolling unitholders
|
220,650
|
|
|
33,336
|
|
||
Preferred stockholders
|
1,656
|
|
|
1,656
|
|
||
Total accrued dividends and distributions
|
$
|
222,306
|
|
|
$
|
34,992
|
|
(1)
|
The amount includes the value of the dividend equivalents that will be paid with additional RSUs (see Note 15 “Share-Based Compensation” for additional information).
|
|
December 31,
|
||||
|
2016
|
|
2015
|
||
Outstanding Shares and Units:
|
|
||||
Common stock
(1)
|
93,219,439
|
|
|
92,258,690
|
|
Noncontrolling common units
|
2,381,543
|
|
|
1,764,775
|
|
RSUs
(2)
|
1,395,189
|
|
|
1,269,809
|
|
Series G Preferred stock
|
4,000,000
|
|
|
4,000,000
|
|
Series H Preferred stock
|
4,000,000
|
|
|
4,000,000
|
|
(1)
|
The amount includes nonvested shares.
|
(2)
|
The amount includes nonvested RSUs. Does not include the
659,051
and
425,452
market measure-based RSUs because not all the necessary performance conditions have been met as of
December 31, 2016
and
2015
, respectively.
|
14.
|
Partners' Capital of the Operating Partnership
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in millions, except share and per share data)
|
||||||||||
Shares of common stock contributed by the Company
|
451,398
|
|
|
1,866,267
|
|
|
1,599,123
|
|
|||
Common units exchanged for shares of common stock by the Company
|
451,398
|
|
|
1,866,267
|
|
|
1,599,123
|
|
|||
Aggregate gross proceeds
|
$
|
32.3
|
|
|
$
|
140.1
|
|
|
$
|
104.7
|
|
Aggregate net proceeds after selling commissions
|
$
|
31.9
|
|
|
$
|
138.2
|
|
|
$
|
103.1
|
|
|
December 31, 2016
|
|
December 31, 2015
|
||
Company owned common units in the Operating Partnership
|
93,219,439
|
|
|
92,258,690
|
|
Company owned general partnership interest
|
97.5
|
%
|
|
98.1
|
%
|
Noncontrolling common units of the Operating Partnership
|
2,381,543
|
|
|
1,764,775
|
|
Ownership interest of noncontrolling interest
|
2.5
|
%
|
|
1.9
|
%
|
|
December 31, 2016
|
|
December 31, 2015
|
||||
|
(in thousands)
|
||||||
Distributions payable to:
|
|
|
|
||||
General partner
|
$
|
212,074
|
|
|
$
|
32,291
|
|
Common limited partners
|
5,418
|
|
|
618
|
|
||
RSU holders
(1)
|
3,158
|
|
|
427
|
|
||
Total accrued distributions to common unitholders
|
220,650
|
|
|
33,336
|
|
||
Preferred unitholders
|
1,656
|
|
|
1,656
|
|
||
Total accrued distributions
|
$
|
222,306
|
|
|
$
|
34,992
|
|
(1)
|
The amount includes the value of the dividend equivalents that will be paid with additional RSUs (see Note 15 “Share-Based Compensation” for additional information).
|
|
December 31, 2016
|
|
December 31, 2015
|
||
Outstanding Units:
|
|
||||
Common units held by the general partner
|
93,219,439
|
|
|
92,258,690
|
|
Common units held by the limited partners
|
2,381,543
|
|
|
1,764,775
|
|
RSUs
(1)
|
1,395,189
|
|
|
1,269,809
|
|
Series G Preferred units
|
4,000,000
|
|
|
4,000,000
|
|
Series H Preferred units
|
4,000,000
|
|
|
4,000,000
|
|
(1)
|
Does not include the
659,051
and
425,452
market measure-based RSUs because not all the necessary performance conditions have been met as of
December 31, 2016
and
2015
, respectively.
|
|
2016 Performance-Based RSU Grant
|
|
2015 Performance-Based RSU Grant
|
||
Service vesting period
|
January 28, 2016 - January 5, 2019
|
|
|
January 27, 2015 - January 5, 2018
|
|
Target RSUs granted
|
168,077
|
|
|
127,657
|
|
Estimated RSUs earned based on FFO per share performance condition
|
241,438
|
|
|
185,510
|
|
Date of fair valuation
|
January 28, 2016
|
|
|
January 27, 2015
|
|
|
2016 Award Fair Value Assumptions
|
2015 Award Fair Value Assumptions
|
Valuation date
|
January 28, 2016
|
January 27, 2015
|
Fair value per share on valuation date
|
$57.08
|
$78.55
|
Expected share price volatility
|
26.00%
|
20.00%
|
Risk-free interest rate
|
1.13%
|
0.92%
|
Remaining expected life
|
2.9 years
|
2.9 years
|
|
2016 Time-Based RSU Grant
|
|
2015 Time-Based RSU Grant
|
||||
Service vesting period
|
January 28, 2016 - January 5, 2019
|
|
|
January 27, 2015 - January 5, 2018
|
|
||
Fair value on valuation date (in millions)
|
$
|
7.1
|
|
|
$
|
6.4
|
|
Fair value per share
|
$
|
56.23
|
|
|
$
|
75.34
|
|
Date of fair valuation
|
January 28, 2016
|
|
|
January 27, 2015
|
|
|
Nonvested RSUs
|
|
Vested RSUs
|
|
Total RSUs
|
|||||||
|
Amount
|
|
Weighted-Average
Fair Value Per Share (1) |
|
||||||||
Outstanding at January 1, 2016
|
425,452
|
|
|
$
|
67.68
|
|
|
—
|
|
|
425,452
|
|
Granted
|
258,393
|
|
|
57.36
|
|
|
—
|
|
|
258,393
|
|
|
Vested
|
(36,914
|
)
|
|
43.53
|
|
|
36,914
|
|
|
—
|
|
|
Settled
(2)
|
|
|
|
|
(36,914
|
)
|
|
(36,914
|
)
|
|||
Issuance of dividend equivalents
(3)
|
12,120
|
|
|
65.50
|
|
|
—
|
|
|
12,120
|
|
|
Outstanding as of December 31, 2016
(4)
|
659,051
|
|
|
$
|
64.95
|
|
|
—
|
|
|
659,051
|
|
(1)
|
Represents the grant-date fair value for all awards, excluding the 2014 Performance-Based RSU Grant, which was re-measured upon stockholder approval of the amended 2006 Plan on May 22, 2014, as an insufficient number of shares were available to settle these RSUs upon initial grant on January 29, 2014.
|
(2)
|
Represents vested RSUs that were settled in shares of the Company’s common stock. Total shares settled include
19,264
shares that were tendered in accordance with the terms of the 2006 Plan to satisfy minimum statutory tax withholding requirements related to the RSUs settled. We accept the return of RSUs at the current quoted closing share price of the Company’s common stock to satisfy tax obligations.
|
(3)
|
Represents the issuance of dividend equivalents earned on the underlying RSUs. The dividend equivalents vest based on terms specified under the related RSU award agreement.
|
(4)
|
Outstanding RSUs as of December 31, 2016 represent the achievement of the maximum performance conditions and assumed target levels for the market conditions. The number of restricted stock units ultimately earned is subject to change based upon actual performance over the three-year vesting period. Dividend equivalents earned will vest along with the underlying award and are also subject to changes based on the number of RSUs ultimately earned for each underlying award.
|
|
RSUs Granted
|
|
RSUs Vested
|
||||||||||
Years ended December 31,
|
Non-Vested
RSUs Granted
|
|
Weighted-Average
Fair Value
Per Share
(1)
|
|
Vested RSUs
|
|
Total Vest-Date Fair Value
(in thousands)
|
||||||
2016
|
258,393
|
|
|
$
|
57.36
|
|
|
(36,914
|
)
|
|
$
|
2,788
|
|
2015
|
191,483
|
|
|
79.25
|
|
|
—
|
|
|
—
|
|
||
2014
|
183,365
|
|
|
64.86
|
|
|
(16,338
|
)
|
|
1,092
|
|
(1)
|
Represents the grant-date fair value for all awards, excluding the 2014 Performance-Based RSU Grant, which was re-measured upon stockholder approval of the amended 2006 Plan on May 22, 2014, as an insufficient number of shares were available to settle these RSUs upon initial grant on January 29, 2014.
|
|
Nonvested RSUs
|
|
Vested RSUs
|
|
Total RSUs
|
|||||||
|
Amount
|
|
Weighted Average Fair Value
Per Share (1) |
|
||||||||
Outstanding at January 1, 2016
|
318,449
|
|
|
$
|
58.91
|
|
|
951,360
|
|
|
1,269,809
|
|
Granted
|
173,747
|
|
|
58.29
|
|
|
—
|
|
|
173,747
|
|
|
Vested
|
(130,784
|
)
|
|
57.91
|
|
|
130,784
|
|
|
—
|
|
|
Settled
(2)
|
|
|
|
|
(72,148
|
)
|
|
(72,148
|
)
|
|||
Issuance of dividend equivalents
(3)
|
5,027
|
|
|
65.78
|
|
|
23,243
|
|
|
28,270
|
|
|
Canceled
(4)
|
|
|
|
|
(4,489
|
)
|
|
(4,489
|
)
|
|||
Outstanding as of December 31, 2016
|
366,439
|
|
|
$
|
59.07
|
|
|
1,028,750
|
|
|
1,395,189
|
|
(1)
|
Represents the grant-date fair value for all awards, excluding the 2014 Performance-Based RSU Grant, which was re-measured upon stockholder approval of the amended 2006 Plan on May 22, 2014, as an insufficient number of shares were available to settle these RSUs upon initial grant on January 29, 2014.
|
(2)
|
Represents vested RSUs that were settled in shares of the Company’s common stock. Total shares settled include
23,087
shares that were tendered in accordance with the terms of the 2006 Plan to satisfy minimum statutory tax withholding requirements related to the RSUs settled. We accept the return of RSUs at the current quoted closing share price of the Company’s common stock to satisfy tax obligations.
|
(3)
|
Represents the issuance of dividend equivalents earned on the underlying RSUs. The dividend equivalents vest based on terms specified under the related RSU award agreement.
|
(4)
|
For shares vested but not yet settled, we accept the return of RSUs at the current quoted closing share price of the Company’s common stock to satisfy minimum statutory tax-withholding requirements related to either the settlement or vesting of RSUs in accordance with the terms of the 2006 Plan.
|
|
RSUs Granted
|
|
RSUs Vested
|
||||||||||
Year ended December 31,
|
Non-Vested
RSUs Issued
|
|
Weighted-Average Grant Date
Fair Value
Per Share
|
|
Vested RSUs
|
|
Total Vest-Date Fair Value
(1)
(in thousands)
|
||||||
2016
|
173,747
|
|
|
$
|
58.29
|
|
|
(130,784
|
)
|
|
$
|
8,438
|
|
2015
|
98,802
|
|
|
74.49
|
|
|
(107,541
|
)
|
|
7,528
|
|
||
2014
|
155,016
|
|
|
59.89
|
|
|
(116,447
|
)
|
|
6,675
|
|
(1)
|
Total fair value of RSUs vested was calculated based on the quoted closing share price of the Company’s common stock on the NYSE on the day of vesting. Excludes the issuance of dividend equivalents earned on the underlying RSUs. The dividend equivalents vest based on terms specified under the related RSU award agreement.
|
|
Nonvested
Restricted Stock |
|
Weighted-Average
Grant Date Fair Value Per Share |
|||
Outstanding at January 1, 2016
|
60,797
|
|
|
$
|
47.32
|
|
Vested
(1)
|
(24,262
|
)
|
|
46.39
|
|
|
Outstanding as of December 31, 2016
|
36,535
|
|
|
$
|
47.93
|
|
(1)
|
The total shares vested includes
12,661
shares that were tendered in accordance with the terms of the 2006 Plan to satisfy minimum statutory tax withholding requirements related to the restricted shares that have vested. We accept the return of shares at the current quoted closing share price of the Company’s common stock to satisfy tax withholding obligations.
|
|
Shares Granted
|
|
Shares Vested
|
||||||||||
Years ended December 31,
|
Nonvested
Shares Issued
|
|
Weighted-Average Grant Date
Fair Value
Per Share
|
|
Vested Shares
|
|
Total Fair Value at Vest Date
(1)
(in thousands)
|
||||||
2016
|
—
|
|
|
$
|
—
|
|
|
(24,262
|
)
|
|
$
|
1,527
|
|
2015
|
—
|
|
|
—
|
|
|
(24,264
|
)
|
|
1,725
|
|
||
2014
|
213
|
|
|
51.35
|
|
|
(25,899
|
)
|
|
1,323
|
|
(1)
|
Total fair value of shares vested was calculated based on the quoted closing share price of the Company’s common stock on the NYSE on the date of vesting.
|
|
February 2012 Option Grant
|
Fair value of options granted per share
|
$9.20
|
Expected stock price volatility
|
33.00%
|
Risk-free interest rate
|
1.35%
|
Dividend yield
|
3.80%
|
Expected life of option
|
6.5 years
|
|
Number of Options
|
|
Exercise Price
|
|
Intrinsic Value
(in millions)
(1)
|
|||||
Outstanding at December 31, 2015
|
610,000
|
|
|
$
|
42.61
|
|
|
$
|
12.6
|
|
Exercised
|
(286,500
|
)
|
|
42.61
|
|
|
8.4
|
|
||
Forfeited
|
(9,000
|
)
|
|
42.61
|
|
|
0.1
|
|
||
Outstanding at December 31, 2016
(2)
|
314,500
|
|
|
$
|
42.61
|
|
|
$
|
9.6
|
|
|
|
|
|
|
|
|||||
Options exercisable at December 31, 2016
(3)
|
50,500
|
|
|
$
|
42.61
|
|
|
$
|
1.5
|
|
(1)
|
The intrinsic value of a stock option is the amount by which the fair value of the underlying stock exceeds the exercise price of an option. The fair value of the underlying stock was determined by using the closing share price on the NYSE on the date of exercise, forfeiture or respective period end.
|
(2)
|
As of
December 31, 2016
, the average remaining life of stock options outstanding was
5.1
years
|
(3)
|
As of
December 31, 2016
, the average remaining life of stock options exercisable was approximately
5.1
years.
|
16.
|
Employee Benefit Plans
|
17.
|
Future Minimum Rent
|
Year Ending
|
(in thousands)
|
||
2017
|
$
|
538,269
|
|
2018
|
537,891
|
|
|
2019
|
493,998
|
|
|
2020
|
424,791
|
|
|
2021
|
370,941
|
|
|
Thereafter
|
1,901,303
|
|
|
Total
(1)
|
$
|
4,267,193
|
|
(1)
|
Excludes residential leases and leases with a term of
one
year or less.
|
18.
|
Commitments and Contingencies
|
Property
|
Contractual Expiration Date
(1)
|
601 108th Ave NE, Bellevue, WA
|
November 2093
|
701, 801 and 837 N. 34th Street, Seattle, WA
(2)
|
December 2041
|
1701 Page Mill Road and 3150 Porter Drive, Palo Alto, CA
|
December 2067
|
Kilroy Airport Center Phases I, II, and III, Long Beach, CA
|
July 2084
|
(1)
|
Reflects the contractual expiration date prior to the impact of any extension or purchase options held by the Company.
|
(2)
|
The Company has
three
10
year and
one
45
year extension options for this ground lease, which if exercised would extend the expiration date to December 2116.
|
Year Ending
|
(in thousands)
|
||
2017
|
$
|
4,934
|
|
2018
|
4,934
|
|
|
2019
|
4,934
|
|
|
2020
|
4,934
|
|
|
2021
|
4,934
|
|
|
Thereafter
|
231,402
|
|
|
Total
(1)(2)(3)(4)(5)
|
$
|
256,072
|
|
(2)
|
One of our ground lease obligations is subject to a fair market value adjustment every
five years
; however, the lease includes ground rent subprotection and infrastructure rent credits which currently limit our annual rental obligations to
$1.0 million
. The contractual obligations for that ground lease included above assumes the lesser of
$1.0 million
or annual lease rental obligation in effect as of
December 31, 2016
.
|
(3)
|
One of our ground lease obligations includes a component which is based on the percentage of gross income that exceeds the minimum ground rent. The minimum rent is subject to increases every
five years
based on
50%
of the average annual percentage rent for the previous five years.
|
(4)
|
One of our ground lease obligations is subject to a fair market value adjustment every five years based on a combination of CPI adjustments and third-party appraisals limited to maximum increases annually. The contractual obligations included above assume the annual lease rental obligation in effect as of
December 31, 2016
.
|
(5)
|
One of our ground lease obligations includes a component which is based on the percentage of adjusted gross income that exceeds the minimum ground rent. The minimum rent is subject to increases every
10 years
by an amount equal to
60%
of the average annual percentage rent for the previous three years.
|
|
Fair Value (Level 1)
(1)
|
||||||
|
2016
|
|
2015
|
||||
Description
|
(in thousands)
|
||||||
Marketable securities
(2)
|
$
|
14,773
|
|
|
$
|
12,882
|
|
(1)
|
Based on quoted prices in active markets for identical securities.
|
(2)
|
The marketable securities are held in a limited rabbi trust
.
|
|
December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Description
|
(in thousands)
|
||||||||||
Net gain (loss) on marketable securities
|
$
|
1,130
|
|
|
$
|
(269
|
)
|
|
$
|
397
|
|
|
December 31,
|
||||||||||||||
|
2016
|
|
2015
|
||||||||||||
|
Carrying Value
|
|
Fair Value
(1)
|
|
Carrying Value
|
|
Fair Value
(1)
|
||||||||
|
(in thousands)
|
||||||||||||||
Liabilities
|
|
|
|
|
|
|
|
||||||||
Secured debt, net
|
$
|
472,772
|
|
|
$
|
469,234
|
|
|
$
|
380,835
|
|
|
$
|
391,611
|
|
Unsecured debt, net
|
1,847,351
|
|
|
1,900,487
|
|
|
1,844,634
|
|
|
1,898,863
|
|
(1)
|
Fair value calculated using Level II inputs, which are based on model-derived valuations in which significant inputs and significant value drivers are observable in active markets.
|
21.
|
Discontinued Operations
|
|
2014
|
||
|
(in thousands)
|
||
Revenues:
|
|
||
Rental income
|
$
|
7,206
|
|
Tenant reimbursements
|
278
|
|
|
Other property income
|
13
|
|
|
Total revenues
|
7,497
|
|
|
Expenses:
|
|
||
Property expenses
|
2,171
|
|
|
Real estate taxes
|
692
|
|
|
Depreciation and amortization
|
2,061
|
|
|
Total expenses
|
4,924
|
|
|
Income from discontinued operations before net gain on dispositions of discontinued operations
|
2,573
|
|
|
Net gain on dispositions of discontinued operations
|
121,922
|
|
|
Total income from discontinued operations
|
$
|
124,495
|
|
22.
|
Net Income Available to Common Stockholders Per Share of the Company
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in thousands, except unit and per unit amounts)
|
||||||||||
Numerator:
|
|
|
|
|
|
||||||
Income from continuing operations
|
$
|
303,798
|
|
|
$
|
238,604
|
|
|
$
|
59,313
|
|
Income from continuing operations attributable to noncontrolling interests
|
(10,010
|
)
|
|
(4,523
|
)
|
|
(966
|
)
|
|||
Preferred dividends and distributions
|
(13,250
|
)
|
|
(13,250
|
)
|
|
(13,250
|
)
|
|||
Allocation to participating securities
(1)
|
(3,839
|
)
|
|
(1,634
|
)
|
|
(1,699
|
)
|
|||
Numerator for basic and diluted income from continuing operations available to common stockholders
|
276,699
|
|
|
219,197
|
|
|
43,398
|
|
|||
Income from discontinued operations
(2)
|
—
|
|
|
—
|
|
|
124,495
|
|
|||
Income from discontinued operations attributable to noncontrolling common units of the Operating Partnership
(2)
|
—
|
|
|
—
|
|
|
(2,623
|
)
|
|||
Numerator for basic and diluted net income available to common stockholders
|
$
|
276,699
|
|
|
$
|
219,197
|
|
|
$
|
165,270
|
|
Denominator:
|
|
|
|
|
|
||||||
Basic weighted average vested shares outstanding
|
92,342,483
|
|
|
89,854,096
|
|
|
83,090,235
|
|
|||
Effect of dilutive securities – contingently issuable shares and stock options
|
680,551
|
|
|
541,679
|
|
|
1,877,485
|
|
|||
Diluted weighted average vested shares and common stock equivalents outstanding
|
93,023,034
|
|
|
90,395,775
|
|
|
84,967,720
|
|
|||
Basic earnings per share:
|
|
|
|
|
|
||||||
Income from continuing operations available to common stockholders per share
|
$
|
3.00
|
|
|
$
|
2.44
|
|
|
$
|
0.52
|
|
Income from discontinued operations per share of common stock
(2)
|
—
|
|
|
—
|
|
|
1.47
|
|
|||
Net income available to common stockholders per share
|
$
|
3.00
|
|
|
$
|
2.44
|
|
|
$
|
1.99
|
|
Diluted earnings per share:
|
|
|
|
|
|
||||||
Income from continuing operations available to common stockholders per share
|
$
|
2.97
|
|
|
$
|
2.42
|
|
|
$
|
0.51
|
|
Income from discontinued operations per share of common stock
(2)
|
—
|
|
|
—
|
|
|
1.44
|
|
|||
Net income available to common stockholders per share
|
$
|
2.97
|
|
|
$
|
2.42
|
|
|
$
|
1.95
|
|
(1)
|
Participating securities include nonvested shares, certain time-based RSUs and vested market measure-based RSUs.
|
(2)
|
The Company adopted ASU 2014-08 effective January 1, 2015 (see Note 2 “Basis of Presentation and Significant Accounting Policies” for additional information). As a result, properties classified as held for sale and/or disposed of subsequent to January 1, 2015 that do not represent a strategic shift are no longer presented as discontinued operations.
|
23.
|
Net Income Available to Common Unitholders Per Unit of the Operating Partnership
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in thousands, except unit and per unit amounts)
|
||||||||||
Numerator:
|
|
|
|
|
|
||||||
Income from continuing operations
|
$
|
303,798
|
|
|
$
|
238,604
|
|
|
$
|
59,313
|
|
Income from continuing operations attributable to noncontrolling interests in consolidated subsidiaries
|
(3,735
|
)
|
|
(467
|
)
|
|
(247
|
)
|
|||
Preferred distributions
|
(13,250
|
)
|
|
(13,250
|
)
|
|
(13,250
|
)
|
|||
Allocation to participating securities
(1)
|
(3,839
|
)
|
|
(1,634
|
)
|
|
(1,699
|
)
|
|||
Numerator for basic and diluted income from continuing operations available to common unitholders
|
282,974
|
|
|
223,253
|
|
|
44,117
|
|
|||
Income from discontinued operations
(2)
|
—
|
|
|
—
|
|
|
124,495
|
|
|||
(Income) loss from discontinued operations attributable to noncontrolling interests in consolidated subsidiaries
(2)
|
—
|
|
|
—
|
|
|
(13
|
)
|
|||
Numerator for basic and diluted net income available to common unitholders
|
$
|
282,974
|
|
|
$
|
223,253
|
|
|
$
|
168,599
|
|
Denominator:
|
|
|
|
|
|
||||||
Basic weighted average vested units outstanding
|
94,771,688
|
|
|
91,645,578
|
|
|
84,894,498
|
|
|||
Effect of dilutive securities - contingently issuable shares and stock options
|
680,551
|
|
|
541,679
|
|
|
1,877,485
|
|
|||
Diluted weighted average vested units and common unit equivalents outstanding
|
95,452,239
|
|
|
92,187,257
|
|
|
86,771,983
|
|
|||
Basic earnings per unit:
|
|
|
|
|
|
||||||
Income from continuing operations available to common unitholders per unit
|
$
|
2.99
|
|
|
$
|
2.44
|
|
|
$
|
0.52
|
|
Income from discontinued operations per common unit
(2)
|
—
|
|
|
—
|
|
|
1.47
|
|
|||
Net income available to common unitholders per unit
|
$
|
2.99
|
|
|
$
|
2.44
|
|
|
$
|
1.99
|
|
Diluted earnings per unit:
|
|
|
|
|
|
||||||
Income from continuing operations available to common unitholders per unit
|
$
|
2.96
|
|
|
$
|
2.42
|
|
|
$
|
0.51
|
|
Income from discontinued operations per common unit
(2)
|
—
|
|
|
—
|
|
|
1.43
|
|
|||
Net income available to common unitholders per unit
|
$
|
2.96
|
|
|
$
|
2.42
|
|
|
$
|
1.94
|
|
(1)
|
Participating securities include nonvested shares, certain time-based RSUs and vested market measure-based RSUs.
|
(2)
|
The Operating Partnership adopted ASU 2014-08 effective January 1, 2015 (see Note 2 “Basis of Presentation and Significant Accounting Policies” for additional information). As a result, properties classified as held for sale and/or disposed of subsequent to January 1, 2015 that do not represent a strategic shift are no longer presented as discontinued operations.
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
SUPPLEMENTAL CASH FLOWS INFORMATION:
|
|
|
|
|
|
||||||
Cash paid for interest, net of capitalized interest of $47,675, $50,923, and $44,385 as of
December 31, 2016, 2015 and 2014, respectively
|
$
|
54,295
|
|
|
$
|
54,747
|
|
|
$
|
58,944
|
|
NON-CASH INVESTING TRANSACTIONS:
|
|
|
|
|
|
||||||
Accrual for expenditures for operating properties and development and redevelopment
properties
|
$
|
62,589
|
|
|
$
|
109,715
|
|
|
$
|
77,091
|
|
Tenant improvements funded directly by tenants
|
$
|
18,050
|
|
|
$
|
13,387
|
|
|
$
|
42,906
|
|
Assumption of other assets and liabilities in connection with operating and development
property acquisitions, net (Note 3)
|
$
|
5,863
|
|
|
$
|
6,254
|
|
|
$
|
14,917
|
|
Accrual for receivable related to development properties
|
$
|
1,350
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Release of holdback funds to third party
|
$
|
—
|
|
|
$
|
9,279
|
|
|
$
|
—
|
|
NON-CASH FINANCING TRANSACTIONS:
|
|
|
|
|
|
||||||
Accrual of dividends and distributions payable to common stockholders and common
unitholders (Notes 13 and 29)
|
$
|
220,650
|
|
|
$
|
33,336
|
|
|
$
|
31,243
|
|
Accrual of dividends and distributions payable to preferred stockholders and preferred
unitholders (Notes 13 and 29)
|
$
|
1,656
|
|
|
$
|
1,656
|
|
|
$
|
1,656
|
|
Issuance of common units of the Operating Partnership in connection with an acquisition
(Note 3) |
$
|
48,033
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Secured debt assumed by buyers in connection with land disposition (Note 4)
|
$
|
2,322
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Issuance of shares of common stock in connection with a development property
acquisition |
$
|
—
|
|
|
$
|
—
|
|
|
$
|
21,631
|
|
Exchange of common units of the Operating Partnership into shares of the Company’s
common stock
|
$
|
8,893
|
|
|
$
|
1,223
|
|
|
$
|
28
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
SUPPLEMENTAL CASH FLOWS INFORMATION:
|
|
|
|
|
|
||||||
Cash paid for interest, net of capitalized interest of $47,675, $50,923, and $44,385 as of
December 31, 2016, 2015 and 2014, respectively
|
$
|
54,295
|
|
|
$
|
54,747
|
|
|
$
|
58,944
|
|
NON-CASH INVESTING TRANSACTIONS:
|
|
|
|
|
|
||||||
Accrual for expenditures for operating properties and development and redevelopment properties
|
$
|
62,589
|
|
|
$
|
109,715
|
|
|
$
|
77,091
|
|
Tenant improvements funded directly by tenants
|
$
|
18,050
|
|
|
$
|
13,387
|
|
|
$
|
42,906
|
|
Assumption of other assets and liabilities in connection with operating and development property acquisitions, net (Note 3)
|
$
|
5,863
|
|
|
$
|
6,254
|
|
|
$
|
14,917
|
|
Accrual for receivable related to development properties
|
$
|
1,350
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Release of holdback funds to third party
|
$
|
—
|
|
|
$
|
9,279
|
|
|
$
|
—
|
|
NON-CASH FINANCING TRANSACTIONS:
|
|
|
|
|
|
||||||
Accrual of dividends and distributions payable to common stockholders and common
unitholders (Notes 14 and 29) |
$
|
220,650
|
|
|
$
|
33,336
|
|
|
$
|
31,243
|
|
Accrual of dividends and distributions payable to preferred stockholders and preferred unitholders (Notes 14 and 29)
|
$
|
1,656
|
|
|
$
|
1,656
|
|
|
$
|
1,656
|
|
Issuance of common units in connection with a development property acquisition (Note 3)
|
$
|
48,033
|
|
|
$
|
—
|
|
|
$
|
21,631
|
|
Secured debt assumed by buyers in connection with land disposition (Note 4)
|
$
|
2,322
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Year Ended December 31,
|
||||||||||
Dividends
|
2016
|
|
2015
|
|
2014
|
||||||
Dividends declared per share of common stock
|
$
|
3.375
|
|
|
$
|
1.400
|
|
|
$
|
1.400
|
|
Less: Dividends declared in the current year and paid in the following year
(1)
|
(2.275
|
)
|
|
(0.350
|
)
|
|
(0.350
|
)
|
|||
Add: Dividends declared in the prior year and paid in the current year
|
0.350
|
|
|
0.350
|
|
|
0.350
|
|
|||
Dividends paid per share of common stock
|
$
|
1.450
|
|
|
$
|
1.400
|
|
|
$
|
1.400
|
|
(1)
|
The fourth quarter 2016 dividend of
$2.275
per share of common stock consists of a special cash dividend of
$1.90
per share of common stock and a regular quarterly cash dividend of
$0.375
per share of common stock. The
$1.90
per share special distribution is treated as paid in two tax years for income tax purposes:
$1.587
is treated as paid on December 31, 2016 and
$0.313
is treated as paid on January 13, 2017. The
$0.375
per share regular quarterly distribution is considered a 2017 dividend distribution for income tax purposes.
|
|
Year Ended December 31,
|
|||||||||||||||||||
Shares of Common Stock
|
2016
|
|
2015
|
|
2014
|
|||||||||||||||
Ordinary income
|
$
|
1.500
|
|
|
49.40
|
%
|
|
$
|
0.992
|
|
|
70.86
|
%
|
|
$
|
0.998
|
|
|
71.29
|
%
|
Qualified dividend
|
0.002
|
|
|
0.06
|
|
|
0.002
|
|
|
0.13
|
|
|
0.002
|
|
|
0.14
|
|
|||
Return of capital
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.398
|
|
|
28.43
|
|
|||
Capital gains
(1)
|
1.212
|
|
|
39.89
|
|
|
0.051
|
|
|
3.65
|
|
|
0.002
|
|
|
0.14
|
|
|||
Unrecaptured section 1250 gains
|
0.323
|
|
|
10.65
|
|
|
0.355
|
|
|
25.36
|
|
|
—
|
|
|
—
|
|
|||
|
$
|
3.037
|
|
|
100.00
|
%
|
|
$
|
1.400
|
|
|
100.00
|
%
|
|
$
|
1.400
|
|
|
100.00
|
%
|
(1)
|
Capital gains are comprised entirely of
20%
rate gains.
|
|
Year Ended December 31,
|
|||||||||||||||||||
Preferred Shares
|
2016
|
|
2015
|
|
2014
|
|||||||||||||||
Ordinary income
|
$
|
0.848
|
|
|
49.31
|
%
|
|
$
|
1.218
|
|
|
70.86
|
%
|
|
$
|
1.711
|
|
|
99.54
|
%
|
Qualified dividend
|
0.001
|
|
|
0.06
|
|
|
0.002
|
|
|
0.13
|
|
|
0.003
|
|
|
0.17
|
|
|||
Capital gains
(1)
|
0.687
|
|
|
39.97
|
|
|
0.063
|
|
|
3.65
|
|
|
0.005
|
|
|
0.29
|
|
|||
Unrecaptured section 1250 gains
|
0.183
|
|
|
10.66
|
|
|
0.436
|
|
|
25.36
|
|
|
—
|
|
|
—
|
|
|||
|
$
|
1.719
|
|
|
100.00
|
%
|
|
$
|
1.719
|
|
|
100.00
|
%
|
|
$
|
1.719
|
|
|
100.00
|
%
|
(1)
|
Capital gains are comprised entirely of
20%
rate gains.
|
|
Year Ended December 31,
|
|||||||||||||||||||
Preferred Shares
|
2016
|
|
2015
|
|
2014
|
|||||||||||||||
Ordinary income
|
$
|
0.786
|
|
|
49.31
|
%
|
|
$
|
1.129
|
|
|
70.86
|
%
|
|
$
|
1.587
|
|
|
99.56
|
%
|
Qualified dividend
|
0.001
|
|
|
0.06
|
|
|
0.002
|
|
|
0.13
|
|
|
0.003
|
|
|
0.19
|
|
|||
Capital gains
(1)
|
0.637
|
|
|
39.97
|
|
|
0.059
|
|
|
3.65
|
|
|
0.004
|
|
|
0.25
|
|
|||
Unrecaptured section 1250 gains
|
0.17
|
|
|
10.66
|
|
|
0.404
|
|
|
25.36
|
|
|
—
|
|
|
—
|
|
|||
|
$
|
1.594
|
|
|
100.00
|
%
|
|
$
|
1.594
|
|
|
100.00
|
%
|
|
$
|
1.594
|
|
|
100.00
|
%
|
(1)
|
Capital gains are comprised entirely of
20%
rate gains.
|
27.
|
Quarterly Financial Information of the Company (Unaudited)
|
|
2016 Quarter Ended
(1)
|
||||||||||||||
|
March 31,
|
|
June 30,
|
|
September 30,
|
|
December 31,
|
||||||||
|
(in thousands, except per share amounts)
|
||||||||||||||
Revenues
|
$
|
145,446
|
|
|
$
|
160,133
|
|
|
$
|
168,348
|
|
|
$
|
168,645
|
|
Net income
|
178,113
|
|
|
33,892
|
|
|
56,375
|
|
|
35,418
|
|
||||
Net income attributable to Kilroy Realty Corporation
|
174,308
|
|
|
32,847
|
|
|
53,895
|
|
|
32,738
|
|
||||
Preferred dividends and distributions
|
(3,313
|
)
|
|
(3,312
|
)
|
|
(3,313
|
)
|
|
(3,312
|
)
|
||||
Net income available to common stockholders
|
170,995
|
|
|
29,535
|
|
|
50,582
|
|
|
29,426
|
|
||||
Net income available to common stockholders per share – basic
|
1.85
|
|
|
0.32
|
|
|
0.54
|
|
|
0.29
|
|
||||
Net income available to common stockholders per share – diluted
|
1.84
|
|
|
0.31
|
|
|
0.54
|
|
|
0.29
|
|
||||
|
|
|
|
|
|
|
|
||||||||
|
2015 Quarter Ended
(1)
|
||||||||||||||
|
March 31,
|
|
June 30,
|
|
September 30,
|
|
December 31,
|
||||||||
|
(in thousands, except per share amounts)
|
||||||||||||||
Revenues
|
$
|
146,082
|
|
|
$
|
146,227
|
|
|
$
|
141,553
|
|
|
$
|
147,413
|
|
Net income
|
44,002
|
|
|
58,590
|
|
|
106,704
|
|
|
29,308
|
|
||||
Net income attributable to Kilroy Realty Corporation
|
43,187
|
|
|
57,500
|
|
|
104,759
|
|
|
28,635
|
|
||||
Preferred dividends and distributions
|
(3,313
|
)
|
|
(3,312
|
)
|
|
(3,313
|
)
|
|
(3,312
|
)
|
||||
Net income available to common stockholders
|
39,874
|
|
|
54,188
|
|
|
101,446
|
|
|
25,323
|
|
||||
Net income available to common stockholders per share – basic
|
0.45
|
|
|
0.61
|
|
|
1.10
|
|
|
0.27
|
|
||||
Net income available to common stockholders per share – diluted
|
0.45
|
|
|
0.61
|
|
|
1.09
|
|
|
0.27
|
|
(1)
|
The summation of the quarterly financial data may not equal the annual number reported on the consolidated statements of operations due to rounding. For the year ended
December 31, 2016
, the summation of the quarterly net income available to common stockholders per share does not equal the annual number reported on the consolidated statements of operations due to the Company's repurchase of common stock and its at-the-market stock offering programs that occurred during the year. For the year ended
December 31, 2015
, the summation of the quarterly net income available to common stockholders per share does not equal the annual number reported on the consolidated statements of operations due to public offerings of common stock and its at-the-market stock offering programs that occurred during the year.
|
28.
|
Quarterly Financial Information of the Operating Partnership (Unaudited)
|
|
2016 Quarter Ended
(1)
|
||||||||||||||
|
March 31,
|
|
June 30,
|
|
September 30,
|
|
December 31,
|
||||||||
|
(in thousands, except per unit amounts)
|
||||||||||||||
Revenues
|
$
|
145,446
|
|
|
$
|
160,133
|
|
|
$
|
168,348
|
|
|
$
|
168,645
|
|
Net income
|
178,113
|
|
|
33,892
|
|
|
56,375
|
|
|
35,418
|
|
||||
Net income attributable to the Operating Partnership
|
177,833
|
|
|
33,590
|
|
|
55,254
|
|
|
33,386
|
|
||||
Preferred distributions
|
(3,313
|
)
|
|
(3,312
|
)
|
|
(3,313
|
)
|
|
(3,312
|
)
|
||||
Net income available to common unitholders
|
174,520
|
|
|
30,278
|
|
|
51,941
|
|
|
30,074
|
|
||||
Net income available to common unitholders per unit – basic
|
1.85
|
|
|
0.31
|
|
|
0.54
|
|
|
0.29
|
|
||||
Net income available to common unitholders per unit – diluted
|
1.84
|
|
|
0.31
|
|
|
0.54
|
|
|
0.29
|
|
||||
|
|
|
|
|
|
|
|
||||||||
|
2015 Quarter Ended
(1)
|
||||||||||||||
|
March 31,
|
|
June 30,
|
|
September 30,
|
|
December 31,
|
||||||||
|
(in thousands, except per unit amounts)
|
||||||||||||||
Revenues
|
$
|
146,082
|
|
|
$
|
146,227
|
|
|
$
|
141,553
|
|
|
$
|
147,413
|
|
Net income
|
44,002
|
|
|
58,590
|
|
|
106,704
|
|
|
29,308
|
|
||||
Net income attributable to the Operating Partnership
|
43,927
|
|
|
58,518
|
|
|
106,640
|
|
|
29,052
|
|
||||
Preferred distributions
|
(3,313
|
)
|
|
(3,312
|
)
|
|
(3,313
|
)
|
|
(3,312
|
)
|
||||
Net income available to common unitholders
|
40,614
|
|
|
55,206
|
|
|
103,327
|
|
|
25,740
|
|
||||
Net income available to common unitholders per unit – basic
|
0.45
|
|
|
0.61
|
|
|
1.10
|
|
|
0.27
|
|
||||
Net income available to common unitholders per unit – diluted
|
0.45
|
|
|
0.61
|
|
|
1.09
|
|
|
0.27
|
|
(1)
|
The summation of the quarterly financial data may not equal the annual number reported on the consolidated statements of operations due to rounding. For the year ended
December 31, 2016
, the summation of the quarterly net income available to common stockholders per share does not equal the annual number reported on the consolidated statements of operations due to the issuance of common units in connection with an acquisition, the Company’s repurchase of common stock and the its at-the-market stock offering programs that occurred during the year. For the year ended
December 31, 2015
, the summation of the quarterly net income available to common stockholders per share does not equal the annual number reported on the consolidated statements of operations due to public offerings of common stock and the Company’s at-the-market stock offering programs that occurred during the year.
|
29.
|
Subsequent Events
|
|
Balance at
Beginning
of Period
|
|
Charged to
Costs and
Expenses
|
|
Recoveries
(Deductions)
|
|
Balance
at End
of Period
(1)
|
||||||||
Allowance for Uncollectible Tenant Receivables for the year ended
December 31,
|
|
|
|
|
|
|
|
||||||||
2016 – Allowance for uncollectible tenant receivables
|
$
|
2,080
|
|
|
$
|
—
|
|
|
$
|
(368
|
)
|
|
$
|
1,712
|
|
2015 – Allowance for uncollectible tenant receivables
|
1,999
|
|
|
303
|
|
|
(222
|
)
|
|
2,080
|
|
||||
2014 – Allowance for uncollectible tenant receivables
|
2,134
|
|
|
58
|
|
|
(193
|
)
|
|
1,999
|
|
||||
Allowance for Deferred Rent Receivables for the year ended
December 31,
|
|
|
|
|
|
|
|
||||||||
2016 – Allowance for deferred rent
|
$
|
1,882
|
|
|
$
|
—
|
|
|
$
|
(358
|
)
|
|
$
|
1,524
|
|
2015 – Allowance for deferred rent
|
1,989
|
|
|
242
|
|
|
(349
|
)
|
|
1,882
|
|
||||
2014 – Allowance for deferred rent
|
2,075
|
|
|
—
|
|
|
(86
|
)
|
|
1,989
|
|
|
|
Initial Cost
|
|
|
|
Gross Amounts at Which
Carried at Close of Period
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Property Location
|
|
Encumb-
rances
|
|
Land and improve-
ments
|
|
Buildings
and
Improve-
ments
|
|
Costs
Capitalized
Subsequent to
Acquisition/
Improvement
|
|
Land and improve-
ments
|
|
Buildings
and
Improve-
ments
|
|
Total
|
|
Accumulated
Depreciation
|
|
Deprecia-
tion
Life
(1)
|
|
Date of
Acquisition
(A)/
Construction
(C)
(2)
|
|
Rentable
Square
Feet
(3)
(unaudited)
|
|||||||||||||||||
|
|
($ in thousands)
|
|||||||||||||||||||||||||||||||||||||
Office Properties:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
23925 Park Sorrento, Calabasas, CA
|
|
$
|
1,215
|
|
(4)
|
$
|
50
|
|
|
$
|
2,346
|
|
|
$
|
495
|
|
|
$
|
50
|
|
|
$
|
2,841
|
|
|
$
|
2,891
|
|
|
$
|
1,703
|
|
|
35
|
|
2001
|
( C )
|
11,789
|
|
23975 Park Sorrento, Calabasas, CA
|
|
|
|
(4)
|
765
|
|
|
17,720
|
|
|
7,579
|
|
|
765
|
|
|
25,299
|
|
|
26,064
|
|
|
14,562
|
|
|
35
|
|
2002
|
( C )
|
104,797
|
|
||||||||
24025 Park Sorrento, Calabasas, CA
|
|
|
|
(4)
|
845
|
|
|
15,896
|
|
|
8,099
|
|
|
845
|
|
|
23,995
|
|
|
24,840
|
|
|
13,559
|
|
|
35
|
|
2000
|
( C )
|
108,670
|
|
||||||||
2829 Townsgate Rd., Thousand Oaks, CA
|
|
|
|
5,248
|
|
|
8,001
|
|
|
7,461
|
|
|
5,248
|
|
|
15,462
|
|
|
20,710
|
|
|
10,476
|
|
|
35
|
|
1997
|
( A )
|
84,098
|
|
|||||||||
2240 E. Imperial Highway, El Segundo, CA
|
|
|
|
1,044
|
|
|
11,763
|
|
|
29,475
|
|
|
1,048
|
|
|
41,234
|
|
|
42,282
|
|
|
23,131
|
|
|
35
|
|
1983
|
( C )
|
122,870
|
|
|||||||||
2250 E. Imperial Highway, El Segundo, CA
|
|
|
|
2,579
|
|
|
29,062
|
|
|
34,978
|
|
|
2,547
|
|
|
64,072
|
|
|
66,619
|
|
|
48,914
|
|
|
35
|
|
1983
|
( C )
|
298,728
|
|
|||||||||
2260 E. Imperial Highway, El Segundo, CA
|
|
|
|
2,518
|
|
|
28,370
|
|
|
36,781
|
|
|
2,547
|
|
|
65,122
|
|
|
67,669
|
|
|
9,560
|
|
|
35
|
|
1983
|
( C )
|
298,728
|
|
|||||||||
909 N. Sepulveda Blvd., El Segundo, CA
|
|
|
|
|
3,577
|
|
|
34,042
|
|
|
46,328
|
|
|
3,577
|
|
|
80,370
|
|
|
83,947
|
|
|
32,004
|
|
|
35
|
|
2005
|
( C )
|
244,136
|
|
||||||||
999 N. Sepulveda Blvd., El Segundo, CA
|
|
|
|
|
1,407
|
|
|
34,326
|
|
|
12,392
|
|
|
1,407
|
|
|
46,718
|
|
|
48,125
|
|
|
19,766
|
|
|
35
|
|
2003
|
( C )
|
128,588
|
|
||||||||
6115 W. Sunset Blvd., Los Angeles, CA
(5)
|
|
|
|
|
1,313
|
|
|
3
|
|
|
24,922
|
|
|
2,455
|
|
|
23,783
|
|
|
26,238
|
|
|
901
|
|
|
35
|
|
2015
|
( C )
|
26,105
|
|
||||||||
6121 W. Sunset Blvd., Los Angeles, CA
(5)
|
|
|
|
|
11,120
|
|
|
4,256
|
|
|
71,644
|
|
|
8,703
|
|
|
78,317
|
|
|
87,020
|
|
|
3,299
|
|
|
35
|
|
2015
|
( C )
|
91,173
|
|
||||||||
1525 N. Gower Street Los Angeles, CA
|
|
|
|
|
1,318
|
|
|
3
|
|
|
8,867
|
|
|
1,318
|
|
|
8,870
|
|
|
10,188
|
|
|
135
|
|
|
35
|
|
2016
|
( C )
|
(6)
|
|||||||||
1575 N. Gower Street Los Angeles, CA
|
|
|
|
|
22,153
|
|
|
51
|
|
|
97,669
|
|
|
22,153
|
|
|
97,720
|
|
|
119,873
|
|
|
607
|
|
|
35
|
|
2016
|
( C )
|
(6)
|
|||||||||
1500 N. El Centro Avenue Los Angeles, CA
|
|
|
|
|
9,235
|
|
|
21
|
|
|
36,477
|
|
|
9,235
|
|
|
36,498
|
|
|
45,733
|
|
|
36
|
|
|
35
|
|
2016
|
( C )
|
(6)
|
|||||||||
1550 N. El Centro Avenue Los Angeles, CA
(5)
|
|
|
|
|
16,970
|
|
|
39
|
|
|
123,646
|
|
|
16,970
|
|
|
123,685
|
|
|
140,655
|
|
|
2,101
|
|
|
35
|
|
2016
|
( C )
|
(7)
|
|||||||||
6255 W. Sunset Blvd., Los Angeles, CA
|
|
|
|
|
18,111
|
|
|
60,320
|
|
|
37,000
|
|
|
18,111
|
|
|
97,320
|
|
|
115,431
|
|
|
17,653
|
|
|
35
|
|
2012
|
( A )
|
323,922
|
|
||||||||
3750 Kilroy Airport Way, Long Beach, CA
|
|
|
|
—
|
|
|
1,941
|
|
|
11,051
|
|
|
—
|
|
|
12,992
|
|
|
12,992
|
|
|
9,628
|
|
|
35
|
|
1989
|
( C )
|
10,457
|
|
|||||||||
3760 Kilroy Airport Way, Long Beach, CA
|
|
|
|
—
|
|
|
17,467
|
|
|
11,652
|
|
|
—
|
|
|
29,119
|
|
|
29,119
|
|
|
23,203
|
|
|
35
|
|
1989
|
( C )
|
165,278
|
|
|||||||||
3780 Kilroy Airport Way, Long Beach, CA
|
|
|
|
—
|
|
|
22,319
|
|
|
18,983
|
|
|
—
|
|
|
41,302
|
|
|
41,302
|
|
|
34,274
|
|
|
35
|
|
1989
|
( C )
|
219,745
|
|
|||||||||
3800 Kilroy Airport Way, Long Beach, CA
|
|
|
|
—
|
|
|
19,408
|
|
|
18,504
|
|
|
—
|
|
|
37,912
|
|
|
37,912
|
|
|
21,532
|
|
|
35
|
|
2000
|
( C )
|
192,476
|
|
|||||||||
3840 Kilroy Airport Way, Long Beach, CA
|
|
|
|
—
|
|
|
13,586
|
|
|
9,429
|
|
|
—
|
|
|
23,015
|
|
|
23,015
|
|
|
13,922
|
|
|
35
|
|
1999
|
( C )
|
136,026
|
|
|||||||||
3880 Kilroy Airport Way, Long Beach, CA
|
|
|
|
—
|
|
|
9,704
|
|
|
11,134
|
|
|
—
|
|
|
20,838
|
|
|
20,838
|
|
|
2,416
|
|
|
35
|
|
1997
|
( A )
|
96,035
|
|
|||||||||
3900 Kilroy Airport Way, Long Beach, CA
|
|
|
|
—
|
|
|
12,615
|
|
|
11,009
|
|
|
—
|
|
|
23,624
|
|
|
23,624
|
|
|
14,967
|
|
|
35
|
|
1997
|
( A )
|
129,893
|
|
|||||||||
Kilroy Airport Center, Phase IV, Long Beach, CA
(8)
|
|
|
|
—
|
|
|
|
|
4,997
|
|
|
—
|
|
|
4,997
|
|
|
4,997
|
|
|
4,989
|
|
|
35
|
|
|
|
—
|
|
||||||||||
8560 W. Sunset Blvd West Hollywood, CA
|
|
|
|
9,720
|
|
|
50,956
|
|
|
—
|
|
|
9,720
|
|
|
50,956
|
|
|
60,676
|
|
|
170
|
|
|
35
|
|
2016
|
( A )
|
71,875
|
|
|||||||||
8570 W. Sunset Blvd West Hollywood, CA
|
|
|
|
31,693
|
|
|
27,974
|
|
|
—
|
|
|
31,693
|
|
|
27,974
|
|
|
59,667
|
|
|
82
|
|
|
35
|
|
2016
|
( A )
|
43,603
|
|
|||||||||
8580 W. Sunset Blvd West Hollywood, CA
|
|
|
|
10,013
|
|
|
3,695
|
|
|
—
|
|
|
10,013
|
|
|
3,695
|
|
|
13,708
|
|
|
11
|
|
|
35
|
|
2016
|
( A )
|
7,126
|
|
|||||||||
8590 W. Sunset Blvd West Hollywood, CA
|
|
|
|
39,954
|
|
|
27,884
|
|
|
—
|
|
|
39,954
|
|
|
27,884
|
|
|
67,838
|
|
|
92
|
|
|
35
|
|
2016
|
( A )
|
56,095
|
|
|||||||||
12100 W. Olympic Blvd., Los Angeles, CA
|
|
170,000
|
|
(9)
|
352
|
|
|
45,611
|
|
|
17,548
|
|
|
9,633
|
|
|
53,878
|
|
|
63,511
|
|
|
23,595
|
|
|
35
|
|
2003
|
( C )
|
152,048
|
|
||||||||
12200 W. Olympic Blvd., Los Angeles, CA
|
|
|
(9)
|
4,329
|
|
|
35,488
|
|
|
17,825
|
|
|
3,977
|
|
|
53,665
|
|
|
57,642
|
|
|
33,159
|
|
|
35
|
|
2000
|
( C )
|
150,832
|
|
|||||||||
12233 W. Olympic Blvd., Los Angeles, CA
|
|
|
|
22,100
|
|
|
53,170
|
|
|
3,712
|
|
|
22,100
|
|
|
56,882
|
|
|
78,982
|
|
|
7,382
|
|
|
35
|
|
2012
|
( A )
|
151,029
|
|
|||||||||
12312 W. Olympic Blvd., Los Angeles, CA
|
|
|
(9)
|
3,325
|
|
|
12,202
|
|
|
11,326
|
|
|
3,399
|
|
|
23,454
|
|
|
26,853
|
|
|
9,129
|
|
|
35
|
|
1997
|
( A )
|
76,644
|
|
|||||||||
1633 26th St., Santa Monica, CA
|
|
|
|
2,080
|
|
|
6,672
|
|
|
2,966
|
|
|
2,040
|
|
|
9,678
|
|
|
11,718
|
|
|
6,364
|
|
|
35
|
|
1997
|
( A )
|
44,915
|
|
|||||||||
2100/2110 Colorado Ave., Santa Monica, CA
|
|
94,754
|
|
(10)
|
5,474
|
|
|
26,087
|
|
|
14,411
|
|
|
5,476
|
|
|
40,496
|
|
|
45,972
|
|
|
20,616
|
|
|
35
|
|
1997
|
( A )
|
102,864
|
|
|
|
Initial Cost
|
|
|
|
Gross Amounts at Which
Carried at Close of Period
|
|
|
|
|
|
|
|
|
||||||||||||||||
Property Location
|
|
Encumb-
rances
|
|
Land and improve-
ments
|
|
Buildings
and
Improve-
ments
|
|
Costs
Capitalized
Subsequent to
Acquisition/
Improvement
|
|
Land and improve-
ments
|
|
Buildings
and
Improve-
ments
|
|
Total
|
|
Accumulated
Depreciation
|
|
Deprecia-
tion
Life
(1)
|
|
Date of
Acquisition
(A)/
Construction
(C)
(2)
|
|
Rentable
Square
Feet
(3)
(unaudited)
|
||||||||
|
|
($ in thousands)
|
||||||||||||||||||||||||||||
3130 Wilshire Blvd., Santa Monica, CA
|
|
|
|
8,921
|
|
|
6,579
|
|
|
12,137
|
|
|
9,188
|
|
|
18,449
|
|
|
27,637
|
|
|
12,835
|
|
|
35
|
|
1997
|
( A )
|
88,340
|
|
501 Santa Monica Blvd., Santa Monica, CA
|
|
|
(11)
|
4,547
|
|
|
12,044
|
|
|
10,986
|
|
|
4,551
|
|
|
23,026
|
|
|
27,577
|
|
|
12,803
|
|
|
35
|
|
1998
|
( A )
|
73,212
|
|
2211 Michelson, Irvine, CA
|
|
|
(10)
|
9,319
|
|
|
82,836
|
|
|
5,310
|
|
|
9,319
|
|
|
88,146
|
|
|
97,465
|
|
|
20,843
|
|
|
35
|
|
2010
|
( A )
|
271,556
|
|
12225 El Camino Real, Del Mar, CA
|
|
|
|
1,700
|
|
|
9,633
|
|
|
2,982
|
|
|
1,673
|
|
|
12,642
|
|
|
14,315
|
|
|
7,644
|
|
|
35
|
|
1998
|
( A )
|
58,401
|
|
12235 El Camino Real, Del Mar, CA
|
|
|
|
1,507
|
|
|
8,543
|
|
|
5,584
|
|
|
1,540
|
|
|
14,094
|
|
|
15,634
|
|
|
8,544
|
|
|
35
|
|
1998
|
( A )
|
53,751
|
|
12340 El Camino Real, Del Mar, CA
|
|
|
|
4,201
|
|
|
13,896
|
|
|
8,013
|
|
|
4,201
|
|
|
21,909
|
|
|
26,110
|
|
|
9,611
|
|
|
35
|
|
2002
|
( C )
|
87,774
|
|
12390 El Camino Real, Del Mar, CA
|
|
|
|
3,453
|
|
|
11,981
|
|
|
1,377
|
|
|
3,453
|
|
|
13,358
|
|
|
16,811
|
|
|
8,283
|
|
|
35
|
|
2000
|
( C )
|
72,332
|
|
12348 High Bluff Dr., Del Mar, CA
|
|
|
|
1,629
|
|
|
3,096
|
|
|
4,829
|
|
|
1,629
|
|
|
7,925
|
|
|
9,554
|
|
|
5,457
|
|
|
35
|
|
1999
|
( C )
|
38,806
|
|
12400 High Bluff Dr., Del Mar, CA
|
|
|
(11)
|
15,167
|
|
|
40,497
|
|
|
13,109
|
|
|
15,167
|
|
|
53,606
|
|
|
68,773
|
|
|
23,583
|
|
|
35
|
|
2004
|
( C )
|
209,220
|
|
3579 Valley Centre Dr., Del Mar, CA
|
|
|
|
2,167
|
|
|
6,897
|
|
|
7,419
|
|
|
2,858
|
|
|
13,625
|
|
|
16,483
|
|
|
8,426
|
|
|
35
|
|
1999
|
( C )
|
52,418
|
|
3611 Valley Centre Dr., Del Mar, CA
|
|
|
|
4,184
|
|
|
19,352
|
|
|
18,501
|
|
|
5,259
|
|
|
36,778
|
|
|
42,037
|
|
|
20,980
|
|
|
35
|
|
2000
|
( C )
|
130,047
|
|
3661 Valley Centre Dr., Del Mar, CA
|
|
|
|
4,038
|
|
|
21,144
|
|
|
13,100
|
|
|
4,725
|
|
|
33,557
|
|
|
38,282
|
|
|
17,605
|
|
|
35
|
|
2001
|
( C )
|
128,330
|
|
3721 Valley Centre Dr., Del Mar, CA
|
|
|
|
4,297
|
|
|
18,967
|
|
|
14,468
|
|
|
4,254
|
|
|
33,478
|
|
|
37,732
|
|
|
12,666
|
|
|
35
|
|
2003
|
( C )
|
115,193
|
|
3811 Valley Centre Dr., Del Mar, CA
|
|
|
|
3,452
|
|
|
16,152
|
|
|
20,092
|
|
|
4,457
|
|
|
35,239
|
|
|
39,696
|
|
|
18,943
|
|
|
35
|
|
2000
|
( C )
|
112,067
|
|
12770 El Camino Real, Del Mar, CA
|
|
|
|
9,360
|
|
|
—
|
|
|
26,880
|
|
|
9,360
|
|
|
26,880
|
|
|
36,240
|
|
|
—
|
|
|
35
|
|
2015
|
( C )
|
73,032
|
|
12780 El Camino Real, Del Mar, CA
|
|
|
|
18,398
|
|
|
54,954
|
|
|
1,626
|
|
|
18,398
|
|
|
56,580
|
|
|
74,978
|
|
|
7,289
|
|
|
35
|
|
2013
|
( A )
|
140,591
|
|
12790 El Camino Real, Del Mar, CA
|
|
|
|
10,252
|
|
|
21,236
|
|
|
1,342
|
|
|
10,252
|
|
|
22,578
|
|
|
32,830
|
|
|
2,816
|
|
|
35
|
|
2013
|
( A )
|
78,836
|
|
13280 Evening Creek Dr. South, I-15 Corridor, CA
|
|
|
|
3,701
|
|
|
8,398
|
|
|
4,589
|
|
|
3,701
|
|
|
12,987
|
|
|
16,688
|
|
|
3,945
|
|
|
35
|
|
2008
|
( C )
|
41,196
|
|
13290 Evening Creek Dr. South, I-15 Corridor, CA
|
|
|
|
5,229
|
|
|
11,871
|
|
|
5,919
|
|
|
5,229
|
|
|
17,790
|
|
|
23,019
|
|
|
4,261
|
|
|
35
|
|
2008
|
( C )
|
61,180
|
|
13480 Evening Creek Dr. North, I-15 Corridor, CA
|
|
|
|
7,997
|
|
|
—
|
|
|
48,100
|
|
|
7,997
|
|
|
48,100
|
|
|
56,097
|
|
|
15,057
|
|
|
35
|
|
2008
|
( C )
|
149,817
|
|
13500 Evening Creek Dr. North, I-15 Corridor, CA
|
|
|
|
7,581
|
|
|
35,903
|
|
|
8,678
|
|
|
7,580
|
|
|
44,582
|
|
|
52,162
|
|
|
17,324
|
|
|
35
|
|
2004
|
( A )
|
147,533
|
|
13520 Evening Creek Dr. North, I-15 Corridor, CA
|
|
|
|
7,581
|
|
|
35,903
|
|
|
11,687
|
|
|
7,580
|
|
|
47,591
|
|
|
55,171
|
|
|
19,088
|
|
|
35
|
|
2004
|
( A )
|
141,128
|
|
2355 Northside Dr., Mission Valley, CA
|
|
|
|
4,066
|
|
|
8,332
|
|
|
2,297
|
|
|
3,344
|
|
|
11,351
|
|
|
14,695
|
|
|
3,392
|
|
|
35
|
|
2010
|
( A )
|
53,610
|
|
2365 Northside Dr., Mission Valley, CA
|
|
|
|
7,359
|
|
|
15,257
|
|
|
7,332
|
|
|
6,015
|
|
|
23,933
|
|
|
29,948
|
|
|
6,206
|
|
|
35
|
|
2010
|
( A )
|
96,437
|
|
2375 Northside Dr., Mission Valley, CA
|
|
|
|
3,947
|
|
|
8,146
|
|
|
2,659
|
|
|
3,213
|
|
|
11,539
|
|
|
14,752
|
|
|
3,278
|
|
|
35
|
|
2010
|
( A )
|
51,516
|
|
2385 Northside Dr., Mission Valley, CA
|
|
|
|
2,752
|
|
|
14,513
|
|
|
5,299
|
|
|
5,552
|
|
|
17,012
|
|
|
22,564
|
|
|
5,212
|
|
|
35
|
|
2010
|
( A )
|
89,023
|
|
2305 Historic Decatur Rd., Point Loma, CA
|
|
|
|
5,240
|
|
|
22,220
|
|
|
7,390
|
|
|
5,240
|
|
|
29,610
|
|
|
34,850
|
|
|
6,143
|
|
|
35
|
|
2010
|
( A )
|
103,900
|
|
10390 Pacific Center Ct., Sorrento Mesa, CA
|
|
|
|
3,267
|
|
|
5,779
|
|
|
7,501
|
|
|
3,267
|
|
|
13,280
|
|
|
16,547
|
|
|
6,222
|
|
|
35
|
|
2002
|
( C )
|
68,400
|
|
10394 Pacific Center Ct., Sorrento Mesa, CA
|
|
|
|
2,696
|
|
|
7,134
|
|
|
661
|
|
|
1,671
|
|
|
8,820
|
|
|
10,491
|
|
|
4,312
|
|
|
35
|
|
1998
|
( A )
|
59,327
|
|
10398 Pacific Center Ct., Sorrento Mesa, CA
|
|
|
|
1,947
|
|
|
5,152
|
|
|
1,317
|
|
|
1,222
|
|
|
7,194
|
|
|
8,416
|
|
|
4,224
|
|
|
35
|
|
1998
|
( A )
|
43,645
|
|
10421 Pacific Center Ct., Sorrento Mesa, CA
|
|
|
|
2,926
|
|
|
7,979
|
|
|
22,097
|
|
|
2,926
|
|
|
30,076
|
|
|
33,002
|
|
|
18,321
|
|
|
35
|
|
1998
|
( A )
|
75,899
|
|
10445 Pacific Center Ct., Sorrento Mesa, CA
|
|
|
|
2,247
|
|
|
5,945
|
|
|
1,832
|
|
|
1,809
|
|
|
8,215
|
|
|
10,024
|
|
|
4,941
|
|
|
35
|
|
1998
|
( A )
|
48,709
|
|
10455 Pacific Center Ct., Sorrento Mesa, CA
|
|
|
|
4,044
|
|
|
10,701
|
|
|
82
|
|
|
3,780
|
|
|
11,047
|
|
|
14,827
|
|
|
4,796
|
|
|
35
|
|
1998
|
( A )
|
88,577
|
|
4690 Executive Dr., University Towne Centre, CA
|
|
|
|
1,623
|
|
|
7,926
|
|
|
3,504
|
|
|
1,623
|
|
|
11,430
|
|
|
13,053
|
|
|
6,322
|
|
|
35
|
|
1999
|
( A )
|
47,846
|
|
|
|
Initial Cost
|
|
|
|
Gross Amounts at Which
Carried at Close of Period
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Property Location
|
|
Encumb-
rances
|
|
Land and improve-
ments
|
|
Buildings
and
Improve-
ments
|
|
Costs
Capitalized
Subsequent to
Acquisition/
Improvement
|
|
Land and improve-
ments
|
|
Buildings
and
Improve-
ments
|
|
Total
|
|
Accumulated
Depreciation
|
|
Deprecia-
tion
Life
(1)
|
|
Date of
Acquisition
(A)/
Construction
(C)
(2)
|
|
Rentable
Square
Feet
(3)
(unaudited)
|
|||||||||
|
|
($ in thousands)
|
|||||||||||||||||||||||||||||
4100 Bohannon Dr., Menlo Park, CA
|
|
|
(11)
|
4,835
|
|
|
15,526
|
|
|
505
|
|
|
4,860
|
|
|
16,006
|
|
|
20,866
|
|
|
2,752
|
|
|
35
|
|
2012
|
( A )
|
47,379
|
|
|
4200 Bohannon Dr., Menlo Park, CA
|
|
|
(11)
|
4,798
|
|
|
15,406
|
|
|
2,026
|
|
|
4,662
|
|
|
17,568
|
|
|
22,230
|
|
|
3,312
|
|
|
35
|
|
2012
|
( A )
|
45,451
|
|
|
4300 Bohannon Dr., Menlo Park, CA
|
|
|
(11)
|
6,527
|
|
|
20,958
|
|
|
2,749
|
|
|
6,470
|
|
|
23,764
|
|
|
30,234
|
|
|
5,031
|
|
|
35
|
|
2012
|
( A )
|
63,079
|
|
|
4400 Bohannon Dr., Menlo Park, CA
|
|
|
(11)
|
4,798
|
|
|
15,406
|
|
|
2,469
|
|
|
4,939
|
|
|
17,734
|
|
|
22,673
|
|
|
3,501
|
|
|
35
|
|
2012
|
(A)
|
48,146
|
|
|
4500 Bohannon Dr., Menlo Park, CA
|
|
|
(11)
|
6,527
|
|
|
20,957
|
|
|
1,729
|
|
|
6,470
|
|
|
22,743
|
|
|
29,213
|
|
|
3,939
|
|
|
35
|
|
2012
|
( A )
|
63,078
|
|
|
4600 Bohannon Dr., Menlo Park, CA
|
|
|
(11)
|
4,798
|
|
|
15,406
|
|
|
2,362
|
|
|
4,939
|
|
|
17,627
|
|
|
22,566
|
|
|
3,423
|
|
|
35
|
|
2012
|
( A )
|
48,147
|
|
|
4700 Bohannon Dr., Menlo Park, CA
|
|
|
(11)
|
6,527
|
|
|
20,958
|
|
|
1,397
|
|
|
6,470
|
|
|
22,412
|
|
|
28,882
|
|
|
3,825
|
|
|
35
|
|
2012
|
( A )
|
63,078
|
|
|
1290 - 1300 Terra Bella Avenue, Mountain View, CA
|
|
|
|
28,730
|
|
|
27,555
|
|
|
—
|
|
|
28,730
|
|
|
27,555
|
|
|
56,285
|
|
|
810
|
|
|
35
|
|
2016
|
( A )
|
114,175
|
|
|
331 Fairchild Dr. Mountain View, CA
|
|
|
(11)
|
18,396
|
|
|
17,712
|
|
|
7,955
|
|
|
18,396
|
|
|
25,667
|
|
|
44,063
|
|
|
2,871
|
|
|
35
|
|
2013
|
( C )
|
87,147
|
|
|
680 E. Middlefield Rd., Mountain View, CA
|
|
|
|
34,605
|
|
|
—
|
|
|
56,464
|
|
|
34,605
|
|
|
56,464
|
|
|
91,069
|
|
|
4,099
|
|
|
35
|
|
2014
|
( C )
|
170,090
|
|
|
690 E. Middlefield Rd., Mountain View, CA
|
|
|
|
34,755
|
|
|
—
|
|
|
56,707
|
|
|
34,755
|
|
|
56,707
|
|
|
91,462
|
|
|
4,116
|
|
|
35
|
|
2014
|
( C )
|
170,823
|
|
|
1701 Page Mill Rd Palo Alto, CA
|
|
|
|
—
|
|
|
99,522
|
|
|
—
|
|
|
—
|
|
|
99,522
|
|
|
99,522
|
|
|
—
|
|
|
35
|
|
2016
|
( A )
|
128,688
|
|
|
3150 Porter Drive Palo Alto, CA
|
|
|
|
—
|
|
|
21,715
|
|
|
—
|
|
|
—
|
|
|
21,715
|
|
|
21,715
|
|
|
—
|
|
|
35
|
|
2016
|
( A )
|
36,897
|
|
|
900 Jefferson Ave., Redwood City, CA
(12)
|
|
|
|
16,668
|
|
|
—
|
|
|
109,526
|
|
|
18,063
|
|
|
108,131
|
|
|
126,194
|
|
|
4,270
|
|
|
35
|
|
2015
|
( C )
|
228,505
|
|
|
900 Middlefield Rd., Redwood City, CA
(12)
|
|
|
|
7,959
|
|
|
—
|
|
|
49,592
|
|
|
8,626
|
|
|
48,925
|
|
|
57,551
|
|
|
1,801
|
|
|
35
|
|
2015
|
( C )
|
118,764
|
|
|
303 Second St., San Francisco, CA
(13)
|
|
125,756
|
|
(14)
|
63,550
|
|
|
154,153
|
|
|
46,607
|
|
|
63,550
|
|
|
200,760
|
|
|
264,310
|
|
|
50,705
|
|
|
35
|
|
2010
|
( A )
|
740,047
|
|
100 First St., San Francisco, CA
(15)
|
|
|
|
49,150
|
|
|
131,238
|
|
|
32,041
|
|
|
49,150
|
|
|
163,279
|
|
|
212,429
|
|
|
38,668
|
|
|
35
|
|
2010
|
( A )
|
467,095
|
|
|
250 Brannan St., San Francisco, CA
|
|
|
|
7,630
|
|
|
22,770
|
|
|
4,416
|
|
|
7,630
|
|
|
27,186
|
|
|
34,816
|
|
|
7,256
|
|
|
35
|
|
2011
|
( A )
|
95,008
|
|
|
201 Third St., San Francisco, CA
|
|
|
|
19,260
|
|
|
84,018
|
|
|
43,206
|
|
|
19,260
|
|
|
127,224
|
|
|
146,484
|
|
|
29,948
|
|
|
35
|
|
2011
|
( A )
|
346,538
|
|
|
301 Brannan St., San Francisco, CA
|
|
|
|
5,910
|
|
|
22,450
|
|
|
2,221
|
|
|
5,910
|
|
|
24,671
|
|
|
30,581
|
|
|
5,115
|
|
|
35
|
|
2011
|
( A )
|
74,430
|
|
|
360 Third St., San Francisco, CA
|
|
|
|
—
|
|
|
88,235
|
|
|
112,193
|
|
|
28,504
|
|
|
171,924
|
|
|
200,428
|
|
|
25,219
|
|
|
35
|
|
2011
|
( A )
|
429,796
|
|
|
333 Brannan San Francisco, CA
|
|
|
|
18,645
|
|
|
—
|
|
|
77,623
|
|
|
18,645
|
|
|
77,623
|
|
|
96,268
|
|
|
1,838
|
|
|
35
|
|
2016
|
( C )
|
185,602
|
|
|
350 Mission Street San Francisco, CA
|
|
|
|
52,815
|
|
|
—
|
|
|
210,133
|
|
|
52,815
|
|
|
210,133
|
|
|
262,948
|
|
|
4,590
|
|
|
35
|
|
2016
|
( C )
|
455,340
|
|
|
1310 Chesapeake Terrace, Sunnyvale, CA
|
|
|
(11)
|
16,700
|
|
|
11,020
|
|
|
490
|
|
|
16,700
|
|
|
11,510
|
|
|
28,210
|
|
|
1,064
|
|
|
35
|
|
2014
|
( A )
|
76,244
|
|
|
1315 Chesapeake Terrace, Sunnyvale, CA
|
|
|
(11)
|
12,260
|
|
|
7,930
|
|
|
464
|
|
|
12,260
|
|
|
8,394
|
|
|
20,654
|
|
|
1,002
|
|
|
35
|
|
2014
|
( A )
|
55,635
|
|
|
1320-1324 Chesapeake Terrace, Sunnyvale, CA
|
|
|
(11)
|
17,360
|
|
|
10,720
|
|
|
544
|
|
|
17,360
|
|
|
11,264
|
|
|
28,624
|
|
|
1,385
|
|
|
35
|
|
2014
|
( A )
|
79,720
|
|
|
1325-1327 Chesapeake Terrace, Sunnyvale, CA
|
|
|
(11)
|
12,610
|
|
|
8,160
|
|
|
352
|
|
|
12,610
|
|
|
8,512
|
|
|
21,122
|
|
|
1,024
|
|
|
35
|
|
2014
|
( A )
|
55,383
|
|
|
505 Mathilda Ave., Sunnyvale, CA
|
|
|
|
37,843
|
|
|
1,163
|
|
|
50,554
|
|
|
37,943
|
|
|
51,617
|
|
|
89,560
|
|
|
3,442
|
|
|
35
|
|
2014
|
( C )
|
212,322
|
|
|
555 Mathilda Ave., Sunnyvale, CA
|
|
|
|
37,843
|
|
|
1,163
|
|
|
50,551
|
|
|
37,943
|
|
|
51,614
|
|
|
89,557
|
|
|
3,442
|
|
|
35
|
|
2014
|
( C )
|
212,322
|
|
|
605 Mathilda Ave., Sunnyvale, CA
|
|
|
|
29,014
|
|
|
891
|
|
|
77,359
|
|
|
29,090
|
|
|
78,174
|
|
|
107,264
|
|
|
7,479
|
|
|
35
|
|
2014
|
( C )
|
162,785
|
|
|
599 N. Mathilda Ave., Sunnyvale, CA
|
|
|
|
13,538
|
|
|
12,559
|
|
|
58
|
|
|
13,538
|
|
|
12,617
|
|
|
26,155
|
|
|
2,374
|
|
|
35
|
|
2012
|
( A )
|
75,810
|
|
|
601 108th Ave., Bellevue, WA
|
|
|
|
—
|
|
|
214,095
|
|
|
32,394
|
|
|
—
|
|
|
246,489
|
|
|
246,489
|
|
|
51,328
|
|
|
35
|
|
2011
|
( A )
|
488,470
|
|
|
10900 NE 4th St., Bellevue, WA
|
|
|
|
25,080
|
|
|
150,877
|
|
|
21,120
|
|
|
25,080
|
|
|
171,997
|
|
|
197,077
|
|
|
31,254
|
|
|
35
|
|
2012
|
( A )
|
416,755
|
|
|
10210 NE Points Dr., Kirkland, WA
|
|
|
|
4,336
|
|
|
24,187
|
|
|
2,933
|
|
|
4,336
|
|
|
27,120
|
|
|
31,456
|
|
|
6,151
|
|
|
35
|
|
2011
|
( A )
|
84,641
|
|
|
10220 NE Points Dr., Kirkland, WA
|
|
|
|
2,554
|
|
|
12,080
|
|
|
1,099
|
|
|
2,554
|
|
|
13,179
|
|
|
15,733
|
|
|
2,956
|
|
|
35
|
|
2011
|
( A )
|
49,851
|
|
|
10230 NE Points Dr., Kirkland, WA
|
|
|
|
5,071
|
|
|
24,694
|
|
|
4,281
|
|
|
5,071
|
|
|
28,975
|
|
|
34,046
|
|
|
6,430
|
|
|
35
|
|
2011
|
( A )
|
98,982
|
|
|
|
Initial Cost
|
|
|
|
Gross Amounts at Which
Carried at Close of Period
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Property Location
|
|
Encumb-
rances
|
|
Land and improve-
ments
|
|
Buildings
and
Improve-
ments
|
|
Costs
Capitalized
Subsequent to
Acquisition/
Improvement
|
|
Land and improve-
ments
|
|
Buildings
and
Improve-
ments
|
|
Total
|
|
Accumulated
Depreciation
|
|
Deprecia-
tion
Life
(1)
|
|
Date of
Acquisition
(A)/
Construction
(C)
(2)
|
|
Rentable
Square
Feet
(3)
(unaudited)
|
|||||||||||||||||
|
|
($ in thousands)
|
|||||||||||||||||||||||||||||||||||||
3933 Lake WA Blvd. NE, Kirkland, WA
|
|
|
|
2,380
|
|
|
15,114
|
|
|
4,965
|
|
|
2,380
|
|
|
20,079
|
|
|
22,459
|
|
|
4,331
|
|
|
35
|
|
2011
|
( A )
|
46,450
|
|
|||||||||
837 N. 34th St., Lake Union, WA
|
|
|
|
—
|
|
|
37,404
|
|
|
2,547
|
|
|
—
|
|
|
39,951
|
|
|
39,951
|
|
|
6,914
|
|
|
35
|
|
2012
|
( A )
|
111,580
|
|
|||||||||
701 N. 34th St., Lake Union, WA
|
|
|
|
—
|
|
|
48,027
|
|
|
4,186
|
|
|
—
|
|
|
52,213
|
|
|
52,213
|
|
|
9,942
|
|
|
35
|
|
2012
|
( A )
|
138,994
|
|
|||||||||
801 N. 34th St., Lake Union, WA
|
|
|
|
—
|
|
|
58,537
|
|
|
183
|
|
|
—
|
|
|
58,720
|
|
|
58,720
|
|
|
9,835
|
|
|
35
|
|
2012
|
( A )
|
169,412
|
|
|||||||||
320 Westlake Avenue North, WA
|
|
78,041
|
|
(16)
|
14,710
|
|
|
82,018
|
|
|
1,080
|
|
|
14,710
|
|
|
83,098
|
|
|
97,808
|
|
|
11,082
|
|
|
35
|
|
2013
|
( A )
|
184,643
|
|
||||||||
321 Terry Avenue North, Lake Union, WA
|
|
|
(16)
|
10,430
|
|
|
60,003
|
|
|
244
|
|
|
10,430
|
|
|
60,247
|
|
|
70,677
|
|
|
8,463
|
|
|
35
|
|
2013
|
( A )
|
135,755
|
|
|||||||||
401 Terry Avenue North, Lake Union, WA
|
|
|
|
22,500
|
|
|
77,046
|
|
|
—
|
|
|
22,500
|
|
|
77,046
|
|
|
99,546
|
|
|
7,556
|
|
|
35
|
|
2014
|
( A )
|
140,605
|
|
|||||||||
TOTAL OPERATING PROPERTIES
|
|
469,766
|
|
|
1,069,200
|
|
|
2,843,637
|
|
|
2,134,384
|
|
|
1,108,971
|
|
|
4,938,250
|
|
|
6,047,221
|
|
|
1,139,853
|
|
|
|
|
|
|
14,025,856
|
|
||||||||
Undeveloped land and construction in progress
|
|
—
|
|
|
671,113
|
|
|
—
|
|
|
342,420
|
|
|
671,113
|
|
|
342,420
|
|
|
1,013,533
|
|
|
—
|
|
|
|
|
|
|
—
|
|
||||||||
TOTAL ALL PROPERTIES
|
|
$
|
469,766
|
|
(17)
|
$
|
1,740,313
|
|
|
$
|
2,843,637
|
|
|
$
|
2,476,804
|
|
|
$
|
1,780,084
|
|
|
$
|
5,280,670
|
|
|
$
|
7,060,754
|
|
|
$
|
1,139,853
|
|
|
|
|
|
|
14,025,856
|
|
(1)
|
The initial costs of buildings and improvements are depreciated over
35 years
using a straight-line method of accounting; improvements capitalized subsequent to acquisition are depreciated over the shorter of the lease term or useful life, generally ranging from
one
to
20
years.
|
(2)
|
Represents our date of construction or acquisition, or our predecessor, the Kilroy Group.
|
(3)
|
Includes square footage from our stabilized portfolio.
|
(4)
|
These properties secure a
$1.2 million
mortgage note.
|
(5)
|
These properties include the costs of a shared parking structure for a complex that will be comprised of five office buildings and one residential tower upon completion. Once completed, the costs of the parking structure will be reallocated amongst the six buildings.
|
(6)
|
These properties, comprised of
377,000
rentable square feet, are excluded from our stabilized portfolio as of
December 31, 2016
, as they are in the “lease-up” phase.
|
(7)
|
This property represents the 200-unit Columbia Square - Residential tower that stabilized in 2016.
|
(8)
|
These costs represent infrastructure costs incurred in 1989. During the third quarter of 2009, we exercised our option to terminate the ground lease at Kilroy Airport Center, Phase IV in Long Beach, California. We had previously leased this land, which is adjacent to our Office Properties at Kilroy Airport Center, Long Beach, for potential future development opportunities.
|
(9)
|
These properties secure a
$170.0 million
mortgage note.
|
(10)
|
These properties secure a
$94.8 million
mortgage note.
|
(11)
|
These properties secure intercompany promissory notes between KRLP and consolidated property partnerships.
|
(12)
|
These properties are owned by Redwood City Partners LLC, a consolidated property partnership.
|
(13)
|
This property is owned by 303 Second Street Member LLC, a consolidated property partnership.
|
(14)
|
This property secures a
$125.8 million
mortgage note.
|
(15)
|
This property is owned by 100 First Street Member LLC, a consolidated property partnership.
|
(16)
|
These properties secure a
$78.0 million
mortgage note.
|
(17)
|
Represents gross aggregate principal amount before the effect of the unamortized premium of approximately
$4.4 million
and unamortized deferred financing cost of approximately
$1.4 million
as of
December 31, 2016
.
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in thousands)
|
||||||||||
Total real estate held for investment, beginning of year
|
$
|
6,328,146
|
|
|
$
|
6,057,932
|
|
|
$
|
5,264,947
|
|
Additions during period:
|
|
|
|
|
|
||||||
Acquisitions
|
460,957
|
|
|
139,123
|
|
|
340,296
|
|
|||
Improvements, etc.
|
386,836
|
|
|
536,411
|
|
|
588,166
|
|
|||
Total additions during period
|
847,793
|
|
|
675,534
|
|
|
928,462
|
|
|||
Deductions during period:
|
|
|
|
|
|
||||||
Cost of real estate sold
|
(68,200
|
)
|
|
(231,984
|
)
|
|
(113,416
|
)
|
|||
Properties held for sale
|
(13,193
|
)
|
|
(160,074
|
)
|
|
(14,700
|
)
|
|||
Other
|
(33,792
|
)
|
|
(13,262
|
)
|
|
(7,361
|
)
|
|||
Total deductions during period
|
(115,185
|
)
|
|
(405,320
|
)
|
|
(135,477
|
)
|
|||
Total real estate held for investment, end of year
|
$
|
7,060,754
|
|
|
$
|
6,328,146
|
|
|
$
|
6,057,932
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(in thousands)
|
||||||||||
Accumulated depreciation, beginning of year
|
$
|
994,241
|
|
|
$
|
947,664
|
|
|
$
|
818,957
|
|
Additions during period:
|
|
|
|
|
|
||||||
Depreciation of real estate
|
171,983
|
|
|
159,524
|
|
|
153,841
|
|
|||
Total additions during period
|
171,983
|
|
|
159,524
|
|
|
153,841
|
|
|||
Deductions during period:
|
|
|
|
|
|
||||||
Write-offs due to sale
|
(22,471
|
)
|
|
(66,603
|
)
|
|
(18,111
|
)
|
|||
Properties held for sale
|
(3,900
|
)
|
|
(46,191
|
)
|
|
(7,007
|
)
|
|||
Other
|
—
|
|
|
(153
|
)
|
|
(16
|
)
|
|||
Total deductions during period
|
(26,371
|
)
|
|
(112,947
|
)
|
|
(25,134
|
)
|
|||
Accumulated depreciation, end of year
|
$
|
1,139,853
|
|
|
$
|
994,241
|
|
|
$
|
947,664
|
|
Exhibit
Number
|
|
Description
|
3.(i)1
|
|
Kilroy Realty Corporation Articles of Restatement (previously filed by Kilroy Realty Corporation as an exhibit on Form 10-Q for the quarter ended June 30, 2012)
|
3.(i)2
|
|
Certificate of Limited Partnership of Kilroy Realty, L.P. (previously filed by Kilroy Realty, L.P., as an exhibit to the General Form for Registration of Securities on Form 10 as filed with the Securities and Exchange Commission on August 18, 2010)
|
3.(i)3
|
|
Amendment to the Certificate of Limited Partnership of Kilroy Realty, L.P. (previously filed by Kilroy Realty, L.P., as an exhibit to the General Form for Registration of Securities on Form 10 as filed with the Securities and Exchange Commission on August 18, 2010)
|
3.(i)4
|
|
Articles Supplementary designating Kilroy Realty Corporation’s 6.875% Series G Cumulative Redeemable Preferred Stock (previously filed by Kilroy Realty Corporation on Form 8-A as filed with the Securities and Exchange Commission on March 22, 2012)
|
3.(i)5
|
|
Articles Supplementary designating Kilroy Realty Corporation’s 6.375% Series H Cumulative Redeemable Preferred Stock (previously filed by Kilroy Realty Corporation on Form 8-A as filed with the Securities and Exchange Commission on August 10, 2012)
|
3.(ii)1
|
|
Fifth Amended and Restated Bylaws of Kilroy Realty Corporation (previously filed by Kilroy Realty Corporation as an exhibit on Form 8-K as filed with the Securities and Exchange Commission on February 1, 2017)
|
3.(ii)2
|
|
Seventh Amended and Restated Agreement of Limited Partnership of Kilroy Realty, L.P. dated August 15, 2012, as amended (previously filed by Kilroy Realty Corporation on Form 10-Q for the quarter ended June 30, 2014)
|
4.1
|
|
Kilroy Realty Corporation Form of Certificate for Common Stock (previously filed by Kilroy Realty Corporation as an exhibit to the Registration Statement on Amendment No. 3 to Form S-11 (No. 333-15553))
|
4.2
|
|
Specimen Certificate for Kilroy Realty Corporation’s 6.875% Series G Cumulative Redeemable Preferred Stock (previously filed by Kilroy Realty Corporation on Form 8-A as filed with the Securities and Exchange Commission on March 22, 2012)
|
4.3
|
|
Specimen Certificate for Kilroy Realty Corporation’s 6.375% Series H Cumulative Redeemable Preferred Stock (previously filed by Kilroy Realty Corporation on Form 8-A as filed with the Securities and Exchange Commission on August 10, 2012)
|
4.4
|
|
Registration Rights Agreement, dated January 31, 1997 (previously filed by Kilroy Realty Corporation as an exhibit to the Registration Statement on Amendment No. 3 to Form S-11 (No. 333-15553))
|
4.5
|
|
Form of Certificate for Partnership Units of Kilroy Realty, L.P. (previously filed by Kilroy Realty, L.P., as an exhibit to the General Form for Registration of Securities on Form 10 as filed with the Securities and Exchange Commission on August 18, 2010)
|
4.6
|
|
Indenture, dated May 24, 2010, among Kilroy Realty, L.P., as issuer, Kilroy Realty Corporation, as guarantor, and U.S. Bank National Association, as trustee, including the form of 6.625% Senior Notes due 2020 and the form of the related guarantee (previously filed by Kilroy Realty Corporation as an exhibit on Form 8-K as filed with the Securities and Exchange Commission on May 25, 2010)
|
4.7
|
|
Officers’ Certificate pursuant to Sections 101, 201, 301 and 303 of the Indenture dated March 1, 2011, among Kilroy Realty, L.P., as issuer, Kilroy Realty Corporation, as guarantor, and U.S. Bank National Association, as trustee, establishing a series of securities entitled “4.800% Notes due 2018,” including the form of 4.800% Notes due 2018 and the form of related guarantee (previously filed by Kilroy Realty Corporation and Kilroy Realty, L.P. as an exhibit on Form 8-K as filed with the Securities and Exchange Commission on July 6, 2011)
|
4.8
|
|
Registration Rights Agreement, dated July 31, 2012 (previously filed by Kilroy Realty Corporation as an exhibit on Form 10-Q for the quarter ended June 30, 2012)
|
Exhibit
Number
|
|
Description
|
4.9
|
|
Officers’ Certificate pursuant to Sections 101, 201, 301 and 303 of the Indenture dated March 1, 2011, among Kilroy Realty, L.P., as issuer, Kilroy Realty Corporation, as guarantor, and U.S. Bank National Association, as trustee, establishing a series of securities entitled “3.800% Notes due 2023,” including the form of 3.800% Notes due 2023 and the form of related guarantee (previously filed by Kilroy Realty Corporation and Kilroy Realty, L.P. as an exhibit on Form 8-K as filed with the Securities and Exchange Commission on January 14, 2013)
|
4.10
|
|
Indenture, dated March 1, 2011, by and among Kilroy Realty, L.P., as issuer, Kilroy Realty Corporation, as guarantor, and U.S. Bank National Association, as trustee (previously filed by Kilroy Realty Corporation and Kilroy Realty, L.P. as an exhibit to the Registration Statement on Form S-3 as filed with the Securities and Exchange Commission on October 2, 2013)
|
4.11
|
|
Supplemental Indenture, dated July 5, 2011, among Kilroy Realty, L.P., as issuer, Kilroy Realty Corporation, as guarantor, and U.S. Bank National Association, as trustee (previously filed by Kilroy Realty Corporation and Kilroy Realty, L.P. as an exhibit to the Registration Statement on Form S-3 as filed with the Securities and Exchange Commission on October 2, 2013)
|
4.12
|
|
Officers’ Certificate pursuant to Sections 102, 201, 301 and 303 of the Indenture dated March 1, 2011, among Kilroy Realty, L.P., as issuer, Kilroy Realty Corporation, as guarantor, and U.S. Bank National Association, as trustee, establishing a series of securities entitled “4.25% Senior Notes due 2029,” including the form of 4.25% Senior Notes due 2029 and the form of related guarantee (previously filed by Kilroy Realty Corporation and Kilroy Realty, L.P. as an exhibit on Form 8-K as filed with the Securities and Exchange Commission on August 6, 2014)
|
4.13
|
|
Officers’ Certificate, dated September 16, 2015, pursuant to Sections 102, 201, 301 and 303 of the Indenture dated March 1, 2011, among Kilroy Realty, L.P., as issuer, Kilroy Realty Corporation, as guarantor, and U.S. Bank National Association, as trustee, establishing a series of securities entitled “4.375% Senior Notes due 2025,” including the form of 4.375% Senior Notes due 2025 and the form of related guarantee (previously filed by Kilroy Realty Corporation and Kilroy Realty, L.P. as an exhibit on Form 8-K as filed with the Securities and Exchange Commission on September 16, 2015)
|
4.14
|
|
The Company is party to agreements in connection with long-term debt obligations, none of which individually exceeds ten percent of the total assets of the Company on a consolidated basis. Pursuant to Item 601(b)(4)(iii)(A) of Regulation S-K, the Company agrees to furnish copies of these agreements to the Commission upon request
|
10.1
|
|
Pledge Agreement by and among Kilroy Realty, L.P., John B. Kilroy, Sr., John B. Kilroy, Jr. and Kilroy Industries (previously filed by Kilroy Realty Corporation as an exhibit to the Registration Statement on Amendment No. 3 to Form S-11 (No. 333-15553))
|
10.2†
|
|
1997 Stock Option and Incentive Plan of the Registrant and Kilroy Realty, L.P. (previously filed by Kilroy Realty Corporation as an exhibit to the Registration Statement on Amendment No. 3 to Form S-11 (No. 333-15553))
|
10.3
|
|
License Agreement by and among the Registrant and the other persons named therein (previously filed by Kilroy Realty Corporation as an exhibit to the Registration Statement on Amendment No. 4 to Form S-11 (No. 333-15553))
|
10.4†
|
|
Form of Restricted Stock Award Agreement (previously filed by Kilroy Realty Corporation as an exhibit on Form 8-K as filed with the Securities and Exchange Commission on February 8, 2007)
|
10.5†
|
|
Kilroy Realty Corporation Stock Award Deferral Program (previously filed by Kilroy Realty Corporation as an exhibit to Form 8-K as filed with the Securities and Exchange Commission on January 2, 2008)
|
10.6†
|
|
Form of Indemnification Agreement of Kilroy Realty Corporation with certain officers and directors (previously filed by Kilroy Realty Corporation as an exhibit on Form 10-K for the year ended December 31, 2009)
|
10.7
|
|
Deed of Trust, Security Agreement and Fixture Filing, dated January 12, 2011, executed by Kilroy Realty 303, LLC (previously filed by Kilroy Realty Corporation and Kilroy Realty, L.P. as an exhibit on Form 8-K as filed with the Securities and Exchange Commission on January 13, 2011)
|
10.8
|
|
Guaranty, dated January 12, 2011, executed by Kilroy Realty, L.P. (previously filed by Kilroy Realty Corporation and Kilroy Realty, L.P. as an exhibit on Form 8-K as filed with the Securities and Exchange Commission on January 13, 2011)
|
Exhibit
Number
|
|
Description
|
10.9
|
|
Unsecured Indemnity Agreement, dated January 12, 2011, executed by Kilroy Realty 303, LLC (previously filed by Kilroy Realty Corporation and Kilroy Realty, L.P. as an exhibit on Form 8−K as filed with the Securities and Exchange Commission on January 13, 2011)
|
10.10†
|
|
Kilroy Realty Corporation Form of Stock Option Grant Notice and Stock Option Agreement (previously filed by Kilroy Realty Corporation as an exhibit on Form 8-K as filed with the Securities and Exchange Commission on February 24, 2012)
|
10.11†
|
|
Amended and Restated Employment Agreement by and between Kilroy Realty Corporation, Kilroy Realty, L.P. and John B. Kilroy, Jr. (previously filed by Kilroy Realty Corporation on Form 8-K as filed with the Securities and Exchange Commission on April 4, 2012)
|
10.12†
|
|
Noncompetition Agreement by and between Kilroy Realty Corporation, Kilroy Realty, L.P. and John B. Kilroy, Jr. (previously filed by Kilroy Realty Corporation on Form 8-K as filed with the Securities and Exchange Commission on April 4, 2012)
|
10.13
|
|
Term Loan Agreement, dated March 29, 2012 (previously filed by Kilroy Realty Corporation on Form 8-K as filed with the Securities and Exchange Commission on April 2, 2012)
|
10.14
|
|
First Amendment to Term Loan Agreement, dated November 28, 2012 (previously filed by Kilroy Realty Corporation as an exhibit on Form 10-K for the year ended December 31, 2012)
|
10.15
|
|
Promissory Note, dated June 28, 2012 (previously filed by Kilroy Realty Corporation on Form 8-K as filed with the Securities and Exchange Commission on July 5, 2012)
|
10.16
|
|
Loan Agreement, dated June 28, 2012, by and between KR MML 12701, LLC and Massachusetts Mutual Life Insurance Company (previously filed by Kilroy Realty Corporation on Form 8-K as filed with the Securities and Exchange Commission on July 5, 2012)
|
10.17
|
|
Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing (Irvine) for 2211 Michelson Drive, Irvine, California, dated June 28, 2012 (previously filed by Kilroy Realty Corporation on Form 8-K as filed with the Securities and Exchange Commission on July 5, 2012)
|
10.18
|
|
Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing (Santa Monica) for 2100-2110 Colorado Avenue, Santa Monica, California, dated June 28, 2012 (previously filed by Kilroy Realty Corporation on Form 8-K as filed with the Securities and Exchange Commission on July 5, 2012)
|
10.19
|
|
Recourse Guaranty Agreement, dated June 28, 2012 (previously filed by Kilroy Realty Corporation on Form 8-K as filed with the Securities and Exchange Commission on July 5, 2012)
|
10.20
|
|
Environmental Indemnification Agreement, dated June 28, 2012 (previously filed by Kilroy Realty Corporation on Form 8-K as filed with the Securities and Exchange Commission on July 5, 2012)
|
10.21†
|
|
Kilroy Realty Corporation 2006 Incentive Award Plan Restricted Stock Unit Agreement by and between Kilroy Realty Corporation and Jeffrey C. Hawken, dated April 4, 2013 (previously filed by Kilroy Realty Corporation as an exhibit on Form 10-Q for the quarter ended June 30, 2013)
|
10.22†
|
|
Kilroy Realty Corporation 2006 Incentive Award Plan Restricted Stock Unit Agreement by and between Kilroy Realty Corporation and John Kilroy, Jr., dated March 30, 2012 (previously filed by Kilroy Realty Corporation as an exhibit on Form 10-Q for the quarter ended June 30, 2013)
|
10.23†
|
|
Form of Restricted Stock Unit Agreement (previously filed by Kilroy Realty Corporation as an exhibit on Form 10-Q for the quarter ended June 30, 2013)
|
10.24†
|
|
Form of Stock Award Deferral Program Restricted Stock Unit Agreement (previously filed by Kilroy Realty Corporation as an exhibit on Form 10-Q for the quarter ended June 30, 2013)
|
10.25†
|
|
Form of Performance-Vest Restricted Stock Unit Agreement (previously filed by Kilroy Realty Corporation as an exhibit on Form 10-Q for the quarter ended March 31, 2014)
|
10.26†
|
|
Form of Restricted Stock Unit Agreement (previously filed by Kilroy Realty Corporation as an exhibit on Form 10-Q for the quarter ended March 31, 2014)
|
10.27†
|
|
Form of Restricted Stock Unit Agreement for Non-Employee Members of the Board of Directors (previously filed by Kilroy Realty Corporation as an exhibit on Form 10-Q for the quarter ended March 31, 2014)
|
10.28†
|
|
Kilroy Realty 2006 Incentive Award Plan (previously filed by Kilroy Realty Corporation on Form 8-K as filed with the Securities and Exchange Commission on May 21, 2015)
|
Exhibit
Number
|
|
Description
|
10.29
|
|
Amended and Restated Revolving Credit Agreement, dated June 23, 2014 (previously filed by Kilroy Realty Corporation as an exhibit on Form 10-Q for the quarter ended June 30, 2014)
|
10.30
|
|
Amended and Restated Guaranty, dated June 23, 2014 (previously filed by Kilroy Realty Corporation as an exhibit on Form 10-Q for the quarter ended June 30, 2014)
|
10.31
|
|
Term Loan Agreement, dated July 31, 2014 (previously filed by Kilroy Realty Corporation as an exhibit on Form 10-Q for the quarter ended September 30, 2014)
|
10.32
|
|
Guaranty, dated July 31, 2014 (previously filed by Kilroy Realty Corporation as an exhibit on Form 10-Q for the quarter ended September 30, 2014)
|
10.33
|
|
Sales Agreement, dated December 12, 2014, between Kilroy Realty Corporation, Kilroy Realty, L.P. and RBC Capital Markets, LLC (previously filed by Kilroy Realty Corporation as an exhibit on Form 8-K as filed with the Securities and Exchange Commission on December 12, 2014)
|
10.34
|
|
Sales Agreement, dated December 12, 2014, between Kilroy Realty Corporation, Kilroy Realty, L.P. and Jefferies LLC (previously filed by Kilroy Realty Corporation as an exhibit on Form 8-K as filed with the Securities and Exchange Commission on December 12, 2014)
|
10.35
|
|
Sales Agreement, dated December 12, 2014, between Kilroy Realty Corporation, Kilroy Realty, L.P. and KeyBanc Capital Markets Inc. (previously filed by Kilroy Realty Corporation as an exhibit on Form 8-K as filed with the Securities and Exchange Commission on December 12, 2014)
|
10.36
|
|
Sales Agreement, dated December 12, 2014, between Kilroy Realty Corporation, Kilroy Realty, L.P. and BNP Paribas Securities Corp. (previously filed by Kilroy Realty Corporation as an exhibit on Form 8-K as filed with the Securities and Exchange Commission on December 12, 2014)
|
10.37
|
|
Sales Agreement, dated December 12, 2014, between Kilroy Realty Corporation, Kilroy Realty, L.P. and J.P. Morgan Securities LLC (previously filed by Kilroy Realty Corporation as an exhibit on Form 8-K as filed with the Securities and Exchange Commission on December 12, 2014)
|
10.38
|
|
Sales Agreement, dated December 12, 2014, between Kilroy Realty Corporation, Kilroy Realty, L.P. and Barclays Capital Inc. (previously filed by Kilroy Realty Corporation as an exhibit on Form 8-K as filed with the Securities and Exchange Commission on December 12, 2014)
|
10.39†
|
|
Form of Performance-Vest Restricted Stock Unit Agreement (previously filed by Kilroy Realty Corporation as an exhibit on Form 10-Q for the quarter ended March 31, 2015)
|
10.40†
|
|
Form of Restricted Stock Unit Agreement (previously filed by Kilroy Realty Corporation as an exhibit on Form 10-Q for the quarter ended March 31, 2015)
|
10.41†
|
|
Form of Restricted Stock Unit Agreement for Non-Employee Members of the Board of Directors (previously filed by Kilroy Realty Corporation as an exhibit on Form 10-Q for the quarter ended March 31, 2015)
|
10.42†
|
|
Amended and Restated Employment Agreement and Non-Competition Agreement by and between Kilroy Realty Corporation, Kilroy Realty, L.P. and Jeffrey C. Hawken effective as of December 31, 2015 (previously filed by Kilroy Realty Corporation as an exhibit on Form 10-K for the year ended December 31, 2015)
|
10.43†
|
|
Kilroy Realty Corporation Director Compensation Policy effective as of January 1, 2016 (previously filed by Kilroy Realty Corporation as an exhibit on Form 10-K for the year ended December 31, 2015)
|
10.44†
|
|
Kilroy Realty Corporation 2006 Incentive Award Plan Restricted Stock Unit Agreement by and between Kilroy Realty Corporation and Jeffrey C. Hawken, dated January 9, 2016 (previously filed by Kilroy Realty Corporation as an exhibit on Form 10-Q for the quarter ended March 31, 2016)
|
10.45†
|
|
Amended and Restated Employment Agreement and Non-Competition Agreement by and between Kilroy Realty Corporation, Kilroy Realty, L.P. and Tyler H. Rose effective as of January 28, 2016 (previously filed by Kilroy Realty Corporation as an exhibit on Form 10-Q for the quarter ended March 31, 2016)
|
10.46†
|
|
Amended and Restated Employment Agreement and Non-Competition Agreement by and between Kilroy Realty Corporation, Kilroy Realty, L.P. and Justin W. Smart effective as of January 28, 2016 (previously filed by Kilroy Realty Corporation as an exhibit on Form 10-Q for the quarter ended March 31, 2016)
|
Exhibit
Number
|
|
Description
|
10.47
|
|
Note Purchase Agreement dated September 14, 2016 (previously filed by Kilroy Realty Corporation as an exhibit on Form 8-K as filed with the Securities and Exchange Commission on September 14, 2016)
|
10.48*
|
|
Amendment to Sales Agreement, dated September 29, 2016, between Kilroy Realty Corporation, Kilroy Realty, L.P. and RBC Capital Markets, LLC
|
10.49*
|
|
Amendment to Sales Agreement, dated September 29, 2016, between Kilroy Realty Corporation, Kilroy Realty, L.P. and Jefferies LLC
|
10.50*
|
|
Amendment to Sales Agreement, dated September 29, 2016, between Kilroy Realty Corporation, Kilroy Realty, L.P. and KeyBanc Capital Markets Inc.
|
10.51*
|
|
Amendment to Sales Agreement, dated September 29, 2016, between Kilroy Realty Corporation, Kilroy Realty, L.P. and BNP Paribas Securities Corp.
|
10.52*
|
|
Amendment to Sales Agreement, dated September 29, 2016, between Kilroy Realty Corporation, Kilroy Realty, L.P. and J.P. Morgan Securities LLC
|
10.53*
|
|
Amendment to Sales Agreement, dated September 29, 2016, between Kilroy Realty Corporation, Kilroy Realty, L.P. and Barclays Capital Inc.
|
10.54
|
|
Form of Time Sharing Agreement of Kilroy Realty, L.P. (previously filed by Kilroy Realty Corporation as an exhibit on Form 10-Q for the quarter ended September 30, 2016)
|
10.55†*
|
|
Kilroy Realty Corporation 2007 Deferred Compensation Plan, as amended and restated effective January 1, 2017
|
12.1*
|
|
Statement of Computation of Consolidated Ratio of Earnings to Fixed Charges and Consolidated Ratio of Earnings to Combined Fixed Charges and Preferred Dividends of Kilroy Realty Corporation
|
12.2*
|
|
Statement of Computation of Consolidated Ratio of Earnings to Fixed Charges of Kilroy Realty, L.P.
|
21.1*
|
|
List of Subsidiaries of Kilroy Realty Corporation
|
21.2*
|
|
List of Subsidiaries of Kilroy Realty, L.P.
|
23.1*
|
|
Consent of Deloitte & Touche LLP for Kilroy Realty Corporation
|
23.2*
|
|
Consent of Deloitte & Touche LLP for Kilroy Realty, L.P.
|
24.1*
|
|
Power of Attorney (included on the signature page of this Form 10-K)
|
31.1*
|
|
Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer of Kilroy Realty Corporation
|
31.2*
|
|
Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer of Kilroy Realty Corporation
|
31.3*
|
|
Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer of Kilroy Realty, L.P.
|
31.4*
|
|
Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer of Kilroy Realty, L.P.
|
32.1*
|
|
Section 1350 Certification of Chief Executive Officer of Kilroy Realty Corporation
|
32.2*
|
|
Section 1350 Certification of Chief Financial Officer of Kilroy Realty Corporation
|
32.3*
|
|
Section 1350 Certification of Chief Executive Officer of Kilroy Realty, L.P.
|
32.4*
|
|
Section 1350 Certification of Chief Financial Officer of Kilroy Realty, L.P.
|
101.1
|
|
The following Kilroy Realty Corporation and Kilroy Realty, L.P. financial information for the year ended December 31, 2016, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Income, (iii) Consolidated Statements of Changes in Equity, (iv) Consolidated Statements of Capital, (v) Consolidated Statements of Cash Flows and (vi) Notes to the Consolidated Financial Statements.
(1)
|
*
|
Filed herewith
|
†
|
Management contract or compensatory plan or arrangement.
|
(1)
|
Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Exchange Act of 1934 and otherwise are not subject to liability under these sections.
|
|
|
|
Very truly yours,
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Kilroy Realty Corporation
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||
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By:
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|
/s/ Tyler H. Rose
|
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|
|
Tyler H. Rose
Executive Vice President and
Chief Financial Officer |
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By:
|
|
/s/ Michelle Ngo
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Michelle Ngo
Senior Vice President and Treasurer
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Kilroy Realty, L.P.
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By:
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Kilroy Realty Corporation,
|
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as the General Partner
|
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By:
|
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/s/ Tyler H. Rose
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Tyler H. Rose
Executive Vice President and
Chief Financial Officer |
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By:
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/s/ Michelle Ngo
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Michelle Ngo
Senior Vice President and Treasurer
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RBC CAPITAL MARKETS, LLC
|
||
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By:
|
|
/s/ John C. Brady
|
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John C. Brady
Authorized Representative
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Very truly yours,
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Kilroy Realty Corporation
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By:
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/s/ Tyler H. Rose
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|
|
Tyler H. Rose
Executive Vice President and
Chief Financial Officer |
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By:
|
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/s/ Michelle Ngo
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Michelle Ngo
Senior Vice President and Treasurer
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Kilroy Realty, L.P.
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By:
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Kilroy Realty Corporation,
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|
as the General Partner
|
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By:
|
|
/s/ Tyler H. Rose
|
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|
Tyler H. Rose
Executive Vice President and
Chief Financial Officer |
|
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By:
|
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/s/ Michelle Ngo
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Michelle Ngo
Senior Vice President and Treasurer
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JEFFRIES LLC
|
||
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By:
|
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/s/ Michael Ryan
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|
Michael Ryan
Authorized Representative
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Very truly yours,
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Kilroy Realty Corporation
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By:
|
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/s/ Tyler H. Rose
|
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|
|
|
Tyler H. Rose
Executive Vice President and
Chief Financial Officer |
|
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By:
|
|
/s/ Michelle Ngo
|
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|
|
Michelle Ngo
Senior Vice President and Treasurer
|
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Kilroy Realty, L.P.
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By:
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Kilroy Realty Corporation,
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as the General Partner
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By:
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/s/ Tyler H. Rose
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Tyler H. Rose
Executive Vice President and
Chief Financial Officer |
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By:
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/s/ Michelle Ngo
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Michelle Ngo
Senior Vice President and Treasurer
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By:
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/s/ Michael C. Hawkins
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Michael C. Hawkins
Authorized Representative
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Very truly yours,
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Kilroy Realty Corporation
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By:
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/s/ Tyler H. Rose
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Tyler H. Rose
Executive Vice President and
Chief Financial Officer |
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By:
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/s/ Michelle Ngo
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Michelle Ngo
Senior Vice President and Treasurer
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Kilroy Realty, L.P.
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By:
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Kilroy Realty Corporation,
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as the General Partner
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By:
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/s/ Tyler H. Rose
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Tyler H. Rose
Executive Vice President and
Chief Financial Officer |
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By:
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/s/ Michelle Ngo
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Michelle Ngo
Senior Vice President and Treasurer
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BNP PARIBAS SECURITIES CORP.
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By:
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/s/ Frederick J. Fiddle
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Frederick J. Fiddle
Managing Director
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Very truly yours,
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Kilroy Realty Corporation
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By:
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/s/ Tyler H. Rose
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Tyler H. Rose
Executive Vice President and
Chief Financial Officer |
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By:
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/s/ Michelle Ngo
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Michelle Ngo
Senior Vice President and Treasurer
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Kilroy Realty, L.P.
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By:
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Kilroy Realty Corporation,
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as the General Partner
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By:
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/s/ Tyler H. Rose
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Tyler H. Rose
Executive Vice President and
Chief Financial Officer |
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By:
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/s/ Michelle Ngo
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Michelle Ngo
Senior Vice President and Treasurer
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J.P. MORGAN SECURITIES LLC
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By:
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/s/ Adam S. Rosenbluth
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Adam S. Rosenbluth
Authorized Representative
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Very truly yours,
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Kilroy Realty Corporation
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By:
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/s/ Tyler H. Rose
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Tyler H. Rose
Executive Vice President and
Chief Financial Officer |
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By:
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/s/ Michelle Ngo
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Michelle Ngo
Senior Vice President and Treasurer
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Kilroy Realty, L.P.
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By:
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Kilroy Realty Corporation,
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as the General Partner
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By:
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/s/ Tyler H. Rose
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Tyler H. Rose
Executive Vice President and
Chief Financial Officer |
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By:
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/s/ Michelle Ngo
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Michelle Ngo
Senior Vice President and Treasurer
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BARCLAYS CAPITAL, INC.
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By:
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/s/ Victoria Hale
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Victoria Hale
Authorized Representative
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1.1.
|
Title
.
The name of this plan is the “
Kilroy Realty Corporation 2007 Deferred Compensation Plan
.” The Plan was established effective as of June 29, 2007, and is hereby amended and restated generally as of the Effective Date.
|
1.2.
|
Definitions
. Whenever the following capitalized words are used in this Plan, they shall have the meanings specified below.
|
a)
|
“
Account
” shall have the meaning provided in Section 4.1 hereof.
|
b)
|
“
Account Value
” shall have the meaning provided in Section 4.3 hereof.
|
c)
|
“Base Guaranteed Payments”
means the portion of the guaranteed payments made to a Participant who is a Partner that corresponds to the Salary paid to an Employee Participant. The Company shall have full discretion to determine what portion of a Participant’s guaranteed payments represent Base Guaranteed Payments, and the Company’s determination shall be final and binding.
|
d)
|
“
Beneficiary
” means the person or persons, including a trustee, personal representative or other fiduciary, last designated in writing by a Participant in accordance with procedures established by the Committee to receive the benefits specified hereunder in the event of the Participant’s death. No beneficiary designation shall become effective until it is filed with the Committee. If there is no Beneficiary designation in effect for a Participant, or if there is no surviving designated Beneficiary, then the benefits specified hereunder shall be distributed in accordance with the applicable laws of descent and distribution.
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e)
|
“
Board
” means the Board of Directors of the Company.
|
f)
|
“
Bonus
” means any cash incentive which is awarded by the Company in its discretion to a Participant as remuneration and is classified by the Company as a Bonus.
|
g)
|
“
Change of Control
” means and includes each of the following, except that no transaction or series of transactions shall constitute a Change of Control for purposes of this Plan unless such transaction(s) constitute a “change in control event” within the meaning of Section 409A:
|
(i)
|
A transaction or series of transactions (other than an offering of the Company’s common stock to the general public through a registration statement filed with the Securities and Exchange Commission) whereby any “person” or related “group” of “persons” (as such terms are used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended) (other than the Company, the Partnership, any of their respective Subsidiaries, an employee benefit plan maintained by the Company, the Partnership or any of their respective Subsidiaries or a “person” that, prior to such transaction, directly or indirectly controls, is controlled by, or is under common control with, the Company) directly or indirectly acquires beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act) of securities of the Company and immediately after such acquisition possesses more than 50% of the total combined voting power of the Company’s securities outstanding immediately after such acquisition; or
|
(ii)
|
During any period of two consecutive years, individuals who, at the beginning of such period, constitute the Board together with any new director(s) (other than a director designated by a person who shall have entered into an agreement with the Company to effect a transaction described in Section 1.2(f)(i) hereof or Section 1.2(f)(iii) hereof) whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of the two-year period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof;
|
(iii)
|
The consummation by the Company (whether directly involving the Company or indirectly involving the Company through one or more intermediaries) of (x) a merger, consolidation, reorganization, or business combination, (y) a sale or other disposition of all or substantially all of the Company’s assets in any single transaction or series of related transactions or (z) the acquisition of assets or stock of another entity, in each case other than a transaction:
|
(A)
|
Which results in the Company’s voting securities outstanding immediately before the transaction continuing to represent (either by remaining outstanding or by being converted into voting securities of the entity that, as a result of the transaction, controls, directly or indirectly, the Company or owns, directly or indirectly, all or substantially all of the Company’s assets or otherwise succeeds to the business of the Company (the Company or such entity, the “
Successor
Entity
”)) directly or indirectly, at least a majority of the combined voting power of the Successor Entity’s outstanding voting securities immediately after the transaction, and
|
(B)
|
After which no person or group beneficially owns voting securities representing 50% or more of the combined voting power of the Successor Entity;
provided,
however,
that no person or group shall be treated for purposes of this Section 1.2(e)(iii)(B) as beneficially owning 50% or more of combined voting power of the Successor Entity solely as a result of the voting power held in the Company prior to the consummation of the transaction.
|
h)
|
“
Claimant
” shall have the meaning set forth in Section 7.6(a) hereof.
|
i)
|
“
Code
” means the Internal Revenue Code of 1986, as amended.
|
j)
|
“
Committee
” shall have the meaning set forth in Section 7.1 hereof.
|
k)
|
“
Company
” means Kilroy Realty Corporation, a Maryland Corporation, and its successors or assigns.
|
l)
|
“
Company Account Plan
” means any “account balance” nonqualified deferred compensation plan (within the meaning of Section 409A) maintained by the Company or any entity constituting a single employer with the Company within the meaning of Code Section 414(b) or (c).
|
m)
|
“
Company Mandatory Contribution
” shall have the meaning set forth in Section 3.2(a) hereof.
|
n)
|
“
Compensation
” shall include each of Salary, Director Fees, Bonus, Base Guaranteed Payments, and other items approved by the Committee as deferrable to the Plan.
|
o)
|
“
Director
” means any member of the Board.
|
p)
|
“
Director Fee
” means cash compensation paid to any Director in respect of services provided to the Company by the Director in his or her capacity as such, but excluding any Bonus paid to such Director.
|
q)
|
“
Discretionary Contribution
” shall have the meaning provided in Section 3.2(b) hereof.
|
r)
|
“
Disability
” means a “disability” within the meaning of Section 409A.
|
s)
|
“
Effective Date
” of this amended and restated Plan shall have the meaning provided in the recitals. The original effective date of the Plan was June 29, 2007.
|
t)
|
“
Election
” means any Initial Deferral Election or any Subsequent Plan-Year Deferral Election.
|
u)
|
“
Election Form
” shall have the meaning provided in Section 3.1(d) below.
|
v)
|
“
Eligible Service Provider
” means each Employee, Director or Partner who (i) provides services to the Company, the Partnership or any Subsidiary, or serves on the Company’s Board, as applicable, and (ii) to the extent an Employee is a member of a select group of management or highly compensated employees of the Company within the meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA and any regulations promulgated thereunder.
|
w)
|
“
Employee
” means each officer or other employee of the Company, the Partnership or any Subsidiary who serves any such entity at the Senior Vice President level or higher.
|
x)
|
“
ERISA
” means the Employee Retirement Income Security Act of 1974, as amended.
|
y)
|
“
Initial Deferral Election
” means a Participant’s valid election, made on an Election Form, with respect to (i) the deferral of Salary, Director Fees, Bonus, Base Guaranteed Payments, and/or other items of Compensation that the Committee has approved for deferral to the Plan and/or (ii) the time and form of distribution of Company Mandatory Contributions, in any case, submitted to the Committee (or its designee) during such Participant’s Initial Election Period.
|
z)
|
“
Initial Election Period
” means, for each Eligible Service Provider, the period ending thirty days after the date he or she is designated by the Committee, in its sole discretion, as eligible to participate in any Company Account Plan. For purposes of this Plan, (i) if an Eligible Service Provider first becomes eligible to participate in any Company Account Plan, such Eligible Service Provider’s thirty-day Initial Election Period shall commence on the first date of eligibility under such other plan, and (ii) if such Eligible Service Provider cannot or otherwise does not make an Initial Deferral Election under this Plan by filing a valid Election Form with the Committee prior to the expiration of such thirty-day period, then such Eligible Service Provider shall only be permitted to make deferral elections under this Plan during Subsequent Election Periods. For the avoidance of doubt, Election Forms filed during an Initial Election Period (X) with respect to any Company Mandatory Contribution or Compensation that does not constitute Performance-Based Compensation, on or after the first day of the calendar year in which such amounts are earned, and (Y) with respect to any Bonus that constitutes Performance-Based Compensation, after the last date that is at least six months prior to the end of the performance period in which such amounts are earned (June 30 for any calendar-year performance period), in each case, shall only apply to amounts earned after the date that such Election takes effect.
|
aa)
|
“
Investment Alternative
” means an investment alternative selected by the Committee pursuant to Section 3.3(c) hereof.
|
bb)
|
“
Participant
” means any Eligible Service Provider who makes a valid Election in accordance with Section 3.1 hereof, including any Eligible Service Provider who elects not to defer any Compensation but is eligible to receive Company Mandatory Contributions and/or Discretionary Contributions.
|
cc)
|
“
Partner
” means an individual who is a partner of the Partnership.
|
dd)
|
“
Partnership
” means Kilroy Realty, L.P.
|
ee)
|
“
Performance-Based Compensation
” shall mean “performance-based compensation” within the meaning of
|
|
Section 409A.
|
ff)
|
“
Plan
” shall mean the Kilroy Realty Corporation 2007 Deferred Compensation Plan set forth herein, as may be amended from time to time.
|
gg)
|
“
Plan Year
” means the calendar year.
|
hh)
|
“
Reallocation Form
” means a form (which may be in paper or electronic format) prescribed by the Committee and made available to Participants that Participants may use to reallocate their Accounts amongst available Investment Alternatives and/or to specify the allocation of future deferrals amongst available Investment Alternatives.
|
ii)
|
“
Retirement
” shall mean a Participant’s Separation from Service following the completion of at least ten years of employment or service as an Eligible Service Provider with the Company, the Partnership or a Subsidiary and attainment of fifty-five years of age.
|
jj)
|
“
Salary
” means an Employee Participant’s gross base salary paid by the Company
|
kk)
|
“
Section 409A
” shall have the meaning provided in Section 8.2 below.
|
ll)
|
“
Separation from Service
” means a “separation from service” from the Company within the meaning of Section 409A.
|
mm)
|
“
Specified Employee
” shall mean each Participant in the Plan other than a Participant who participates in the Plan only in the capacity as a Director.
|
nn)
|
“
Specified Employee Payment Date
” shall have the meaning provided in Section 6.2 below.
|
oo)
|
“
Subaccount
” shall mean any subaccount of an Account described in Section 4.1 below.
|
pp)
|
“
Subsequent Election Period
” means one or more periods after an Eligible Service Provider’s Initial Election Period during which such Eligible Service Provider may make a Subsequent Plan-Year Deferral Election, which period(s) shall begin on a date specified by the Committee and shall end no later than (A) December 31
st
of the year preceding the year in which any Company Mandatory Contribution or Compensation that does not constitute Performance-Based Compensation subject to such election is earned, as applicable, and, (B) the date that is at least six months before the end of the applicable performance period in which any Bonus that constitutes Performance-Based Compensation subject to such election is earned (June 30th for any calendar-year performance period).
|
qq)
|
“
Subsequent Plan-Year Deferral Election
” means a Participant’s valid election, made on an Election Form, with respect to (i) the deferral of Salary, Director Fees, Bonus, Base Guaranteed Payments, and/or other items of Compensation that the Committee has approved for deferral to the Plan, and/or (ii) the time and form of distribution of Company Mandatory Contributions, in any case, submitted to the Committee (or its designee) during any Subsequent Election Period.
|
rr)
|
“
Subsidiary
” means a corporation, association or other business entity of which 50% or more of the total combined voting power of all classes of capital stock is owned, directly or indirectly, by the Company or the Partnership, including (i) any such Subsidiary owned by one or more Company or Partnership Subsidiaries or by the Company or the Partnership together with one or more Company or Partnership Subsidiaries, (ii) any partnership or limited liability company of which 50% or more of the capital and profits interests are owned, directly or indirectly, by the Company, the Partnership or by one or more Company or Partnership Subsidiaries or by the Company or the Partnership together with one or more Company or Partnership Subsidiaries, and (iii) any other entity not described in clauses (i) or (ii) above of which 50% or more of the ownership and the power, pursuant to a written contract or agreement, to direct the policies and management or the financial and the other affairs thereof, are owned or controlled by the Company, the Partnership, one or more other Company or Partnership Subsidiaries or the Company or the Partnership together with one or more Company or Partnership Subsidiaries.
|
ss)
|
“
Trust
” shall mean a “rabbi trust” satisfying the model trust conditions described in Treas. Rev. Proc. 92-64 and any subsequent Internal Revenue Service guidance affecting the validity of such ruling.
|
tt)
|
“
Unforeseeable Emergency
” shall mean an “unforeseeable emergency” within the meaning of Section 409A.
|
2.1.
|
Eligibility
. Employees and Directors and Partners shall be eligible to participate in the Plan as of the date on which any such individual is designated as an Eligible Service Provider by the Committee, subject to the terms and conditions of the Plan, including without limitation, restrictions as to the timing of Initial Deferral Elections. If a Participant receives a distribution of any portion of such Participant’s Account pursuant to Section 6.1(f) hereof, such Participant shall cease to be an Eligible Service Provider for purposes of making deferrals and eligibility for Company Mandatory Contributions following such distribution unless and until re-designated by the Committee as an Eligible Service Provider.
|
2.2.
|
Participation
. An Eligible Service Provider shall become a Participant in the Plan by submitting a valid Election to the Committee in accordance with Section 3.1 hereof.
|
3.1.
|
Elections to Defer Compensation.
|
a)
|
Initial Deferral Election
. Each Eligible Service Provider shall be permitted to make an Initial Deferral Election during the Initial Election Period applicable to such Eligible Service Provider by submitting to the Committee (or its designee) an Election Form on or prior to the last day of such Eligible Service Provider’s Initial Election Period. If an Eligible Service Provider’s Initial Election Period expires prior to the time at which such individual becomes an Eligible Service Provider under this Plan (whether due to prior eligibility under a Company Account Plan or otherwise), then such individual shall not be permitted to defer any Compensation or make an Election with respect to any Company Mandatory Contributions under this Plan until the first Subsequent Election Period occurring on or after the date on which such individual becomes an Eligible Service Provider under this Plan (including any such Subsequent Election Period that coincides with the period which would have constituted such Eligible Service Provider’s Initial Deferral Period under this Plan, but for such individual’s prior eligibility under a Company Account Plan). A Participant’s Initial Deferral Election shall remain in effect with respect to subsequent Plan-Year Compensation and Company Mandatory Contributions, unless revoked in a writing submitted to the Committee (or its designee) by the Participant or superseded by a Subsequent Plan-Year Deferral Election made in accordance with Section 3.1(b) hereof, in either case, prior to such time as deferral elections become irrevocable with respect to Compensation or Company Mandatory Contributions earned in any such subsequent Plan Year.
|
b)
|
Subsequent Plan - Year Deferral Elections
. Each Eligible Service Provider shall be permitted to make a Subsequent Plan-Year Deferral Election in any Subsequent Election Period during which such individual remains an Eligible Service Provider by submitting to the Committee (or its designee) an Election Form on or prior to the last day of the applicable Subsequent Election Period. Elections contained in a Subsequent Plan-Year Deferral Election shall apply only to Compensation and/or Company Mandatory Contributions earned after the Plan Year in which such Subsequent Plan-Year Deferral Elections are made (or, with respect to Bonuses that constitute Performance-Based Compensation, during the Plan Year in which such Subsequent Plan-Year Deferral Elections are made, provided that such Elections are made more than six months prior to the end of the applicable performance period) and shall, in no event, modify the terms or conditions of deferrals or the time or form of distributions subject to prior Elections that have previously become irrevocable.
|
c)
|
Re- Deferral Elections
. Participants may re-defer amounts previously deferred under an Initial or Subsequent Plan-Year Deferral Election by completing and submitting to the Committee a new Election Form in accordance with any rules or policies issued by the Committee with regard to such re-deferrals,
provided
,
however
,
that (i) such re-deferral elections may only be made prior to such time as a Participant has a Separation from Service, (ii) any such re-deferral must be made at least one year prior to the first date on which any amounts subject to the re-deferral Election would otherwise be paid, absent such re-deferral, (iii) such re-deferral election shall not take effect until at least 12 months after the date on which the re-deferral election is made, (iv) the payment with respect to which such re-deferral election is made must be deferred for an additional period of not less than five years from the date such payment would otherwise have been paid, and (v) any such re-deferral must be timely submitted to the Committee (or its designee) on a form (which may be in paper or electronic format) prescribed by the Committee.
|
d)
|
Election Forms
. Participants shall effectuate Elections (and any re-deferral Elections) by completing and submitting to the Committee (or its designee) a deferral election form (which may be in paper or electronic format) prescribed by the Committee (such form, an “
Election Form
”) in which Participants specify, at a minimum:
|
(i)
|
subject to Section 3.1(f) hereof, the levels and types of Compensation to be deferred under the Election;
|
(ii)
|
the allocation of deferred Compensation amongst one or more In-Service and/or Retirement/Termination Accounts, as follows:
|
(A)
|
to the extent that the Participant elects to allocate deferred Compensation to one or more In-Service Accounts, subject to Article VI below, the specified time at which the amounts so allocated shall be paid (if lump-sum) or commence payment (if installments), which in either case shall be no earlier than two years after the start of the Plan Year in which the underlying Compensation is earned, and the form (which shall be a lump sum unless the Participant elects to receive payment in annual installments) in which the amounts so allocated shall be paid which, in the case of installments, shall be no more than five annual installments,
provided,
however,
that all amounts allocated to an In-Service Account shall be paid in the form of a lump sum if the balance of such account (including any investment gains or losses credited thereto) is less than $25,000 at the time of the scheduled commencement of payments and provided further that the Participant may have no more than three In-Service Accounts in effect at any one time unless otherwise permitted by the Committee;
|
(B)
|
to the extent that the Participant elects to allocate deferred Compensation to one or more Retirement/Termination Accounts, subject to Article VI below, the form of payment applicable to amounts so allocated, which shall be a lump-sum payment unless the participant elects to receive payment in up to fifteen annual installments,
provided, however
, that all amounts allocated to a Retirement/Termination Account shall be paid in a lump sum if the balance of such account (including any investment gains or losses credited thereto) is less than $25,000 at the time of the scheduled commencement of payments or if the Participant’s Separation from Service does not qualify as a Retirement and provided further that the Participant may have no more than two Retirement/Termination Accounts in effect at any one time unless otherwise permitted by the Committee; and
|
(iii)
|
the Retirement/Termination Account to which Company Mandatory Contributions earned in the Plan Year(s) shall be allocated,
provided
,
however
, that if no allocation is made such Company Mandatory Contributions (and any deferred Compensation for which an allocation is not designated under subparagraph (ii) above) shall be allocated to the Retirement/Termination Account first established for the Participant on January 1, 2017 (or, if later, on the date the Eligible Service Provider becomes a Participant) (the “Primary Retirement/Termination Account”);
|
(iv)
|
subject to Article VI below, whether or not the Participant’s entire Account balance (including any amounts subject to any Subsequent Plan-Year Deferral Elections) and any gains or losses credited to such Account will be distributed in connection with a Change of Control,
provided,
however
, that (A) any distribution pursuant to this Section 3.1(d)(iv) shall be in the form of a lump sum, and (B) for the avoidance of doubt, such election must be made during the Participant’s Initial Election Period and shall govern such Participant’s entire Account and shall be irrevocable for the duration of such Participant’s participation in the Plan, except as may otherwise be determined by the Committee with respect to future deferrals; and
|
(v)
|
subject to Section 3.3 hereof, the allocation amongst available Investment Alternatives of each In-Service and Retirement/Termination Account in accordance with the terms of the Plan.
|
e)
|
Priority of Distributions
. Notwithstanding the elections made under paragraph (d) above:
|
(i)
|
if a Change of Control occurs after the commencement of installments payments from an In-Service Account or a Retirement/Termination Account and the Participant has elected to receive a distribution upon a Change of Control, the Participant’s entire remaining Account balance and any gains or losses credited to such Account shall be distributed in a lump sum upon such Change of Control in accordance with the distribution provisions contained in Section 6.1(e) hereof;
|
(ii)
|
if a Participant dies or experiences a Disability at any time (including without limitation, after the commencement of installment payments), the distribution provisions contained in Section 6.1(d) hereof shall control distributions of such Participant’s Account without regard to any applicable Elections; and
|
(iii)
|
Company Mandatory Contributions may only be distributed upon a Separation from Service (including death or Retirement), a Disability, a Change of Control (if so elected) or an Unforeseeable Emergency (in the discretion of the Committee). If a Separation from Service constitutes a Retirement, payment shall be subject to the distribution elections applicable to the Retirement/Termination Account to which such contributions were allocated (and further subject to any applicable provisions of this Section 3.1(e) by virtue of being allocated to the applicable Retirement/Termination Account).
|
f)
|
Deferral Amounts
. Elections to defer receipt of any Compensation must defer a minimum of 5% of the gross amount of any such type of Compensation that is earned during the Plan Year (or, if less, that is earned during the portion of the Plan Year to which the Election applies). Participants may defer up to 100% of any Bonuses or Director Fees earned, but may not defer more than 70% of other items of Compensation. Participants may, but are not required to, defer either or both of (i) Bonuses and/or (ii) non-Bonus Compensation. Company Mandatory Contributions will be automatically made under the Plan for all Participants, and will be governed by the Election Form applicable to such contributions (subject to this Article III and Article VI below). Compensation deferred by Participants under the Plan may only be deferred in increments of whole integral percentage points. For the avoidance of doubt, Eligible Service Providers are not required to defer any Compensation under the Plan, and do so solely at their own election.
|
g)
|
Deferrals Irrevocable
. Except as otherwise provided in Section 3.1(c), any Election that has not been revoked in a writing submitted to the Committee on or prior to the last day of the applicable Initial or Subsequent Election Period, as applicable, shall be irrevocable with respect to all Compensation and/or Company Mandatory Contributions deferred or distributable under such Election (i) in the calendar year that such Election is made in the case of (A) any Initial Deferral Election and (B) any Subsequent Plan-Year Deferral Election applicable to a Bonus that constitutes Performance-Based Compensation earned in the year that such Election is made, and (ii) in the calendar year immediately following the year in which such Election is made in the case of any Subsequent Plan-Year Deferral Election applicable to Company Mandatory Contributions or Compensation that does not constitute Performance-Based Compensation,
provided,
however
, that any Initial Deferral Election which also serves as a Subsequent Plan-Year Deferral Election shall become irrevocable with respect to Company Mandatory Contributions or Compensation that does not constitute Performance-Based Compensation earned during the immediately subsequent Plan Year at the end of the applicable Subsequent Election Period. If an Eligible Service Provider fails to make a timely Election for any reason, then the Eligible Service Provider shall not be permitted to defer any Compensation or make an Election with respect to the time and form of distribution of Company Mandatory Contributions under the Plan until the next Subsequent Election Period (unless a prior Election remains in effect with respect to such Participant’s Compensation or Company Mandatory Contributions, in which case such prior Election shall control).
|
h)
|
Deferral Effectiveness; Termination
. Elections covering Company Mandatory Contributions, and Compensation that does not constitute Performance-Based Compensation shall be effective with respect to amounts earned during the first pay period beginning after the end of the Initial or Subsequent Election Period in which such Elections are made. Any existing Election that is not either revoked in a writing submitted to the Committee (or its designee) or superseded by a Subsequent Plan-Year Deferral Election, in either case, on or prior to the last day of any Subsequent Election Period, shall be irrevocable with respect to amounts earned during the deferral period covered by such Subsequent Election Period.
|
3.2.
|
Company Contributions
.
|
a)
|
Company Mandatory Contributions
. In respect of each semi-monthly pay period through the end of which a Participant remains in the service of the Company, the Partnership or a Subsidiary, the Company shall contribute to such Participant’s Account an amount equal to ten percent (10 %) of such Participant’s Salary (in the case of an Employee Participant) or Base Guaranteed Payments (in the case of a Partner Participant), in each case as actually earned by such Participant in such pay period, without regard to the amount of Compensation, if any, that such Participant has elected to defer under the Plan for such period (the “
Company Mandatory Contributions
”);
provided, however
, Director Participants who are neither Employees nor Partners shall not be eligible to receive any Company Mandatory Contributions, and Company Mandatory Contributions for Director Participants who are also Employees or Partners shall not be made with respect to Director Fees.
|
b)
|
Company Discretionary Contributions
. The Committee may, in its sole discretion, make additional contributions to Participant Accounts based on the performance of the Participant, the performance of the Company (or any unit thereof) or any other metric deemed appropriate by the Committee. If the Committee elects to make any contributions to one or more Participant accounts pursuant to this Section 3.2(b), such contributions (the “
Discretionary Contributions
”) shall be subject to such terms and conditions, including without limitation any vesting conditions, as shall be determined by the Committee. Terms and conditions applicable to any Discretionary Contributions may, in the sole discretion of the Committee, be contained in a separate award agreement between the Company and the Participant receiving such Discretionary Contributions.
|
3.3.
|
Investment Elections
.
|
a)
|
Initial Allocation
. Each Participant shall designate in the applicable Election Form filed with the Committee (or its designee) by such Participant, the initial allocation of such Participant’s In-Service and/or Retirement/Termination Accounts and any earnings on amounts allocated thereto amongst the Investment Alternatives available under the Plan, which allocation shall be designated in increments of whole integral percentage points. Different allocations may be selected for each separate Account. Procedures for allocating Discretionary Contributions amongst Investment Alternatives will be determined by the Committee. If a Participant fails to elect Investment Alternatives under this Section 3.3(a) with respect to some or all of such Participant’s Account balance or fails to elect a new Investment Alternative following the elimination of an Investment Alternative in which any portion of such Participant’s Account is notionally invested (as provided under Section 3.3(c) below), such Participant shall be deemed to have elected a notional investment in a money-market or similar account selected by the Committee with respect to such amounts.
|
b)
|
Reallocation
. Each Participant may reallocate such Participant’s Account balances (including any earnings thereon) in whole integral percentage points amongst the available Investment Alternatives, as often as daily, by submitting a form (which may be in paper or electronic format) prescribed by the Committee to the Committee (or its designee) indicating the extent to which such reallocation applies to (i) any existing Account balances, and (ii) any future Compensation deferrals, Company Mandatory Contributions and earnings on any of the foregoing. Account reallocations made in accordance with this Section 3.3(b) shall take effect on the first business day following the business day on which a valid reallocation form is received by the Committee (or its designee), unless received by the Committee after 1:00 p.m. (pst), in which case such reallocations shall take effect on the second business day following the business day on which a valid reallocation form is received by the Committee (or its designee).
|
c)
|
Investment Alternatives
. The Investment Alternatives amongst which Participants shall be eligible to allocate and reallocate their Account balances, future deferrals, Company Mandatory Contributions and earnings on any of the foregoing shall be selected by the Committee. The Committee may from time to time change the available Investment Alternatives, either by eliminating existing Investment Alternatives, adding new Investment Alternatives, or both,
provided
,
however
, that no such change of available Investment Alternatives shall be made with retroactive effect. The Committee shall communicate any such changes in available Investment Alternatives to Participants as soon as reasonably practicable once known to the Committee.
|
d)
|
Notional Investments
. Allocation of Participants’ Accounts amongst the Investment Alternatives shall be for purposes of tracking notional gains and losses on such amounts and shall create no obligation on the part of the Company, any Trust (or trustee thereof) or any other party to make any actual investments in such Investment Alternatives, whether in accordance with Participant allocations or otherwise. The Company or the Trust (if any) may, however, in its sole discretion, invest as it deems appropriate in one or more of the Investment Alternatives.
|
4.1.
|
Accounts
. The Committee shall establish and maintain a hypothetical bookkeeping account for each Participant for purposes of reflecting Compensation deferred by such Participant, Company Mandatory Contributions and Discretionary Contributions (if any) payable to such Participant and any notional gains or losses on any of the foregoing generated by the Investment Alternatives in which such bookkeeping account is notionally invested, as provided herein. The Committee may, in its sole discretion, create one or more Subaccounts under any Participant Account to reflect amounts which may be subject to different distribution schedules or otherwise as necessary or convenient to the administration of the Plan (such hypothetical accounts, together with any Subaccounts thereunder, the “
Accounts
”). Except as expressly provided in Section 6.4 hereof (with regard to the Trust), neither the Plan nor any of the Accounts established hereunder shall hold any actual investments, funds or assets or shall give any Participant or Beneficiary any right, interest or claim in any particular asset of the Company or any Trust, other than that of a general, unsecured creditor.
|
4.2.
|
Crediting of Accounts
. Each Participant’s Account shall be credited as follows:
|
a)
|
Compensation Deferrals
. All Compensation properly deferred by Participants shall be credited to the Participants’ respective Accounts as soon as administratively practicable following such time or times as are determined by the Committee.
|
b)
|
Company Mandatory Contributions
. All Company Mandatory Contributions shall be credited to the applicable Participant’s Account as soon as administratively practicable following such time or times as are determined by the Committee.
|
c)
|
Discretionary Contributions
. Discretionary Contributions (if any) shall be credited to the Participants’ respective Accounts at such time or times as are determined by the Committee.
|
4.3.
|
Account Valuation; Statements
. The Participants’ Accounts shall be valued periodically, but no less often than monthly, taking into account any increase or decrease in the value of the Investment Alternatives in which such Accounts are notionally invested (the “
Account Value
”). No less frequently than quarterly, statements of such Account valuations shall be made available to Participants either electronically or in a paper format under procedures established by the Committee (or its designee).
|
5.1.
|
Compensation; Company Mandatory Contributions; Earnings
. All Compensation deferred by Participants under this Plan, all Company Mandatory Contributions and any notional gains on each of the foregoing, shall be fully vested at all times, except that all such amounts shall be subject to reduction resulting from notional losses generated by Investment Alternatives in which such amounts are notionally invested in accordance with Participant Elections.
|
5.2.
|
Discretionary Contributions
. If the Company elects to make any Discretionary Contributions to one or more Participant Accounts pursuant to this Plan, the vesting terms of such Discretionary Contributions shall be determined by the Committee and communicated to the affected Participant(s) at the time at which, or as soon as practicable after, such Discretionary Contributions are made.
|
6.1.
|
Distribution of Benefits
. This Section 6.1 shall be applied in a manner consistent with the provisions of Section 3.1(e) hereof.
|
a)
|
In- Service Accounts
.
|
(i)
|
Lump - Sum Distributions
. If a Participant elects to have an In-Service Account distributed in a single lump sum on a date specified in accordance with Section 3.1(d)(ii) hereof, the In-Service Account shall, subject to Sections 6.1(c), 6.1(d), 6.1(e), 6.1(f) and 6.2 hereof, be paid to the Participant in January of the specified year based on the Account Value as of the most recent date prior to such distribution on which such Account Value was determined in accordance with Section 4.3 hereof.
|
(ii)
|
Installment Distributions
. If a Participant elects to have an In-Service Account distributed in annual installments on a date specified in accordance with Section 3.1(d)(ii) hereof, payments from the In-Service Account shall, subject to Sections 6.1(c), 6.1(d), 6.1(e), 6.1(f) and 6.2 hereof, begin in January of the specified year and shall continue to be paid in January of each succeeding year until fully paid in accordance with such Election (not to exceed a total of five payments). On each such distribution date, the Participant shall receive a portion of the Account Value multiplied by a fraction, the numerator of which equals one and the denominator of which equals the number of installment payments remaining, including the payment subject to such calculation. Each such installment payment shall be calculated using the Account Value as of the most recent date prior to such distribution on which such Account Value was determined in accordance with Section 4.3 hereof.
|
(iii)
|
Separation from Service Prior to Scheduled Commencement Date
. Notwithstanding anything to the contrary in this paragraph (a) if a Participant has a Separation from Service (A) that constitutes a Retirement and occurs prior to January 1 of the year that payment(s) from an In-Service Account are scheduled to be made or commence, or (B) before Retirement and before the balance of an In-Service Account has been completely distributed, the balance of the Account shall be distributed in a lump sum payment as soon as practicable after the Participant’s Specified Employee Payment Date. For purposes of clarity, payments from an In-Service Account shall continue as scheduled following a Participant’s Separation from Service only if payments from the Account were scheduled to commence on or before the date of Separation from Service and the Participant’s Separation from Service qualifies as a Retirement. For purposes of this Section 6.1(a)(iii), the date a payment is scheduled to be made or commence shall be determined without regard to any exercise of administrative discretion to make a payment earlier or later than the scheduled date (as provided under Section 6.3).
|
b)
|
Retirement
. If a Participant’s Separation from Service constitutes a Retirement, each of such Participant’s Retirement/Termination Accounts shall be distributed as elected (i) if in a lump-sum, on or as soon as practicable after the applicable Specified Employee Payment Date, and (ii) if in installments, with respect to the first installment on or as soon as practicable after the applicable Specified Employee Payment Date and with respect to each subsequent installment, during the January following the previous installment, in each case, based on the Account Value most recently determined prior to such distribution in accordance with Section 4.3 above. Installment payments made pursuant to this Section 6.1(b) shall be calculated in accordance with the principles contained in Section 6.1(a)(ii) hereof. For the avoidance of doubt, if the Specified Employee Payment Date applicable to an installment Retirement distribution falls during January, then only one distribution shall be made during such January (and in no event prior to the applicable Specified Employee Payment Date), and the remaining distributions shall be made each in succeeding January, until all such installments have been paid in accordance with the Participant’s Election.
|
c)
|
Separation from Service
. Notwithstanding anything herein to the contrary, but (i) consistent with Section 3.1(e) hereof, and (ii) subject to and except as provided in Section 6.2 hereof, if a Participant experiences a Separation from Service for reasons other than death or Retirement, all remaining balances in such Participant’s Accounts shall be distributed in full in the form of a lump-sum payment as soon as practicable after the applicable Specified Employee Payment Date, based on the Account Value most recently determined prior to such distribution in accordance with Section 4.3 above.
|
d)
|
Death; Disability
. Notwithstanding anything herein to the contrary, if a Participant dies or experiences a Disability prior to the full distribution of such Participant’s Account, all remaining balances in such Participant’s Accounts shall be distributed to the Participant’s designated Beneficiary or the Participant, as applicable, in the form of a lump-sum payment as soon as administratively practicable following such Participant’s death or Disability, but in no event later than the month following the month in which such Participant’s death or Disability occurs (unless delayed by legal process), based on the Account Value most recently determined prior to such distribution in accordance with Section 4.3 above.
|
e)
|
Change of Control
. Notwithstanding anything herein to the contrary, if a Participant makes an Election to receive a distribution from such Participant’s Account upon the occurrence of a Change of Control, then all remaining balances in such Participant’s Accounts shall be distributed to the Participant upon, or as soon as practicable after, the consummation of a Change of Control, based on the Account Value most recently determined prior to such distribution in accordance with Section 4.3 above.
|
f)
|
Unforeseeable Emergency
. If a Participant experiences an Unforeseeable Emergency either while actively employed or following Separation from Service but prior to the complete distribution of the Participant’s Accounts under the Plan, the Committee may, in its sole discretion, permit an early distribution of that portion of such Participant’s Account reasonably necessary to satisfy the emergency need giving rise to the Unforeseeable Emergency, including any taxes or penalties reasonably anticipated to result from such distribution and taking into consideration any funds that may become available as a result of the termination of such Participant’s existing Election(s) in connection with such distribution, as described below. If the Participant’s Account is comprised of one or more Subaccounts, the Committee shall determine, in its sole discretion, from which Subaccount such funds shall be distributed and may, in its discretion, permit distributions of Company Mandatory Contributions or other Company contributions. If a Participant takes a distribution pursuant to this Section 6.1(f), such Participant’s existing deferral Election shall immediately terminate with regard to Compensation not yet earned at the time of such distribution and the Participant shall only be eligible to make future Elections under the Plan as determined by the Committee, in its sole discretion and in accordance with Section 409A.
|
6.2.
|
Specified Employees
. Notwithstanding anything in this Plan or any Election Form to the contrary, with respect to any Participant who is a Specified Employee at the time of such Participant’s Separation from Service, as determined in the sole discretion of the Committee, the distribution of such Participant’s Account (and all Subaccounts) upon such Separation from Service shall be delayed until the date which is six months and one day after the date on which such Separation from Service occurs (such delayed payment date, the “
Specified Employee Payment Date
”),
provided
,
however
, that to the extent that all or any portion of such Participant’s Account would have been distributed during the six-month period following such Separation from Service, whether in a lump sum or installments, in either case, without regard to such Separation from Service, such amounts shall continue be distributed in accordance with such schedule without regard to this Section 6.2, and any remaining balance in such Participant’s Account shall be distributed on the Specified Employee Payment Date.
|
6.3.
|
Administrative Discretion with Regard to Timing of Payments
. Notwithstanding anything to the contrary in this Article VI, the Committee may make a payment at the time specified in the preceding Sections 6.1 and 6.2 or at a later date that falls in the same calendar year as the specified time or, if later, by the 15th day of the third calendar month following the time specified, provided the Participant is not permitted, directly or indirectly, to designate the taxable year in which payment will be made. To the extent the Committee exercises its discretion hereunder, payment of the Account shall be based on the value of the Account as of the date specified by the Committee, which shall be no earlier than the end of the month preceding payment and shall be no later than the Business Date preceding the date of payment.
|
6.4.
|
Trust
. The Company may, in its sole discretion, establish a Trust for purposes of allocating funds to satisfy the obligations arising under this Plan. The rights of Participants and Beneficiaries (if any) with respect to any assets so held in Trust (if any) shall be governed by the terms and conditions of the document(s) creating such Trust.
|
7.1.
|
Administration
.
This Plan shall be administered by the Board, which may, in its sole discretion, subject to the express provisions of this Plan, delegate its duties and responsibilities to a committee comprised of one or more members of the Board and/or one or more employees of the Company, who shall serve at the pleasure of the Board to administer the Plan,
provided
,
however
, that with respect to any decision affecting a Director in such Director’s capacity as an Eligible Service Provider or a Participant, the Plan shall be administered by the entire Board (excluding such affected Director). The committee so delegated, in turn, may delegate the administration of its duties to one or more individuals or sub-committees. References to the Committee throughout this Plan shall be understood to refer to the appropriate administrative body as provided under this Section 7.1 (the “
Committee
”).
|
7.2.
|
Committee Action
. The Committee shall act at meetings by affirmative vote of a majority of the members of the Committee. Any action permitted to be taken at a meeting may be taken without a meeting if, prior to such action, a written consent to the action is signed by all members of the Committee and such written consent is filed with the minutes of the proceedings of the Committee. A member of the Committee shall not vote or act upon any matter which relates solely to himself or herself as a Participant or an Eligible Service Provider. The chairman, chairwoman or any other member or members of the Committee designated by the chairman or chairwoman may execute any certificate or other written direction on behalf of the Committee.
|
7.3.
|
Powers and Duties of the Committee
. The Committee, on behalf of the Participants and their Beneficiaries, shall administer the Plan in accordance with its terms, and shall have all powers necessary to accomplish its purposes, including, but not by way of limitation, the following:
|
a)
|
To designate individuals as Eligible Service Providers;
|
b)
|
To designate the commencement date of any Subsequent Election Periods;
|
c)
|
To select and modify Investment Alternatives in accordance with Section 3.3(d) hereof;
|
d)
|
To determine the Initial Deferral Period applicable to any Eligible Service Provider and to determine whether a leave of absence or other break in service or change in role constitutes a Separation from Service or otherwise affects eligibility under the Plan;
|
e)
|
To construe and interpret the terms and provisions of this Plan and to make all factual determinations relevant to the Plan;
|
f)
|
To compute the amount and kind of benefits payable to Participants and Beneficiaries;
|
g)
|
To maintain all records that may be necessary for the administration of the Plan;
|
h)
|
To provide for the disclosure of all information and the filing or provision of all reports and statements to Participants, Beneficiaries or governmental agencies as required by law;
|
i)
|
To make and publish such rules, forms, policies and procedures for the administration of the Plan as are not inconsistent with the terms hereof;
|
j)
|
To appoint one or more sub-committees or individuals to assist with the administration of the Plan and to delegate to such sub- committee(s) or individuals such powers and duties in connection with the administration of the Plan as the Committee may from time to time prescribe;
|
k)
|
To direct and instruct the trustee of the Trust (if the Company establishes a Trust), to the extent the Company is authorized or required to do so under the Plan; and
|
l)
|
To take all actions set forth in this Plan document.
|
7.4.
|
Construction and Interpretation
. The Committee shall have full discretion to construe and interpret the terms and provisions of this Plan, which construction and interpretation shall be final and binding on all parties, including but not limited to the Company and all Participants and Beneficiaries.
|
7.5.
|
Compensation, Expenses and Indemnity
.
|
a)
|
Compensation
. The members of the Committee, including members of any subcommittee and other individuals providing services in connection with the administration of this Plan, shall serve without compensation for their services hereunder.
|
b)
|
Expenses
. The Committee is authorized, at the expense of the Company, to employ such legal, financial and tax counsel, as well as any other agents that it deems advisable, to assist in the performance of its duties hereunder. Expenses and fees incurred in connection with the administration of the Plan, including without limitation the foregoing, shall be paid by the Company.
|
c)
|
Indemnification
. To the greatest extent permitted by applicable law, the Company shall indemnify and hold harmless the Committee and each member thereof, the Board and any delegate of the Committee who is an Employee against any and all expenses, liabilities and claims, including without limitation any legal fees to defend against such liabilities and claims, in each case arising out of any such individual’s discharge in good faith of responsibilities under or incident to the Plan, but excluding any expenses and liabilities arising out of the willful misconduct of any such individual. This indemnity shall be additional to and not in limitation of any further indemnities that may be available under insurance purchased by the Company or provided by the Company under any bylaw, agreement or otherwise.
|
7.6.
|
Disputes
.
|
a)
|
Claimants
. A person who believes that he or she is being denied a benefit to which he or she is entitled under the Plan (hereinafter referred to as “
Claimant
”) may file a written request for such benefit with the Committee, setting forth such Claimant’s claim.
|
b)
|
Rendering and Notification of Decision
. Upon receipt of a claim, the Committee shall advise the Claimant that a reply will be forthcoming within ninety (90) days (forty-five (45) days in the event a claim involves a disability benefit) and shall, in fact, deliver such reply within such period. The Committee may, however, at its sole discretion, extend the reply period for an additional ninety (90) days (thirty (30) days in the event a claim involves a disability benefit, with the possibility of a second thirty-day extension). If the claim is denied in whole or in part, the Committee shall inform the Claimant in writing, using language calculated to be understood by the Claimant, setting forth: (i) the specific reason or reasons for such denial; (ii) the specific reference to pertinent provisions of the Plan, any Election Form(s) or any other documentation on which such denial is based; (iii) a description of any additional material or information necessary for the Claimant to perfect his or her claim and an explanation why such material or such information is necessary; (iv) appropriate information as to the steps to be taken if the Claimant wishes to submit the claim for review; and (v) the time limits for requesting a review under Section 7.6(c) hereof.
|
c)
|
Within sixty (60) days after the receipt by the Claimant of the written notification described in Section 7.6(b) hereof, the Claimant may make a request in writing for review of the determination of the Committee. Such request must be addressed to the Committee. The Claimant or his or her duly authorized representative may, but need not, review the pertinent documents and submit issues and comments in writing for consideration by the Committee. If the Claimant does not request a review within such sixty (60) day-period, he or she shall be barred and estopped from challenging the Committee’s determination.
|
d)
|
Within sixty (60) days after the Committee’s receipt of a request for review (forty-five (45) days in the event the claim relates to a disability benefit), the Committee shall review the request, taking into consideration all materials presented by the Claimant. The Committee will inform the Claimant in writing, in a manner calculated to be understood by the Claimant, of its decision setting forth the specific reasons for the decision and containing specific references to the pertinent provisions of the Plan on which the decision is based. If special circumstances require that the sixty (60)-day (or forty-five (45) day) time period be extended, the Committee will so notify the Claimant and will render the decision as soon as possible, but no later than one hundred twenty (120) days (ninety (90) days in the event the claim relates to a disability benefit) after receipt of the request for review.
|
8.1.
|
Unsecured General Creditors
. Participants and their Beneficiaries, heirs, successors, and assigns shall have no legal or equitable rights, claims, or interest in any specific property or assets of the Company or any Trust. Any and all of the Company’s assets and the Trust assets (if any) which are attributable to amounts paid into the Trust by the Company shall be, and remain, the general unpledged, unrestricted assets of the Company, which shall be subject to the claims of the Company’s general creditors. The Company’s obligation under the Plan shall be merely that of an unfunded and unsecured promise of the Company to pay money in the future, and the rights of the Participants and Beneficiaries shall be no greater than those of unsecured general creditors. It is the intention of the Company that the Plan (and the Trust, if any) be unfunded for purposes of the Code and for purposes of Title I of ERISA.
|
8.2.
|
Section 409A
. To the extent applicable, the Plan, all Election Forms and all other instruments evidencing amounts subject to the Plan shall be interpreted in accordance with Code Section 409A and Department of Treasury regulations and other interpretive guidance issued thereunder, including without limitation, any such regulations or other guidance that may be issued after the Effective Date (together, “
Section 409A
”). Notwithstanding any provision of the Plan, any Election Form or any other instrument evidencing amounts subject to the Plan to the contrary, if the Committee determines that any amounts subject to the Plan may be or become subject to Section 409A, the Committee may adopt such amendments to the Plan, any Election Form(s) and any other instruments relating to the Plan, and/or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions as the Committee determines are necessary or appropriate to (a) exempt such amounts from Section 409A, or (b) comply with the requirements of Section 409A, in any case, to preserve the intended tax treatment of the such amounts.
|
8.3.
|
Restriction Against Assignment
. Except as otherwise provided herein or by law, no right or interest of any Participant or Beneficiary under the Plan shall be assignable or transferable, in whole or in part, either directly or by operation of law or otherwise, including without limitation by execution, levy, garnishment, attachment, pledge or in any manner; no attempted assignment or transfer thereof shall be effective; and no right or interest of any Participant or Beneficiary under the Plan shall be liable for, or subject to, any obligation or liability of such Participant. When a payment is due under this Plan to a Participant or Beneficiary who is unable to care for his or her affairs, payment may be made directly to his or her legal guardian or personal representative.
Notwithstanding anything to the contrary herein, however, the Committee has the discretion to make payments to an alternate payee in accordance with the terms of a domestic relations order (as defined in Code Section 414(p)(1)(B)).
|
8.4.
|
Withholding
. The Company shall have the authority and the right to deduct, withhold or require a Participant or Beneficiary to remit to the Company an amount sufficient to satisfy federal, state, local and foreign taxes (including without limitation any income and employment tax obligations) required by law to be withheld with respect to amounts payable under this Plan.
|
8.5.
|
Expenses
. The expenses of administering the Plan shall be borne by the Company.
|
8.6.
|
Notices
. Any notice required or permitted to be given hereunder to a Participant or Beneficiary will be properly given if delivered or mailed, postage prepaid, to the Participant or Beneficiary at his or her last post office address as shown in the Company’s records. Any notice to the Committee or the Company shall be properly given or filed upon receipt by the Committee or the Company at such address as may be specified from time to time by the Committee. Each individual entitled to a benefit under the Plan must file with the Company, in writing, his or her post office address and each change of post office address which occurs between the date of his or her Separation from Service and the date he or she ceases to be a Participant. Any communication, statement or notice addressed to such individual at his or her latest reported address will be binding upon such individual for all purposes of the Plan.
|
8.7.
|
No Right to Continue Service
. Nothing in the Plan, any Election Form or any other instrument evidencing amounts subject to the Plan shall interfere with or limit in any way the right of the Company to terminate any Participant’s employment or services at any time, nor confer upon any Participant any right to continue in the employ or service of the Company.
|
8.8.
|
Amendment, Suspension or Termination
. The Board may amend, suspend or terminate the Plan in whole or in part, at any time, except that no amendment, suspension or termination shall have any retroactive effect to reduce any amounts allocated to a Participant’s Account
|
8.9.
|
Additional Board Authority
. The Board may, in its sole discretion, with respect to this Plan and all matters arising hereunder, take any action permitted under Treas. Reg. 1.409A-3(j) or any successor provision thereto, as such provisions may be amended from time to time, including without limitation, terminate or liquidate the Plan, whether or not in connection with a Change of Control.
|
8.10.
|
Governing Law
. This Plan shall be construed, governed and administered in accordance with applicable provisions of the Code, ERISA and, to the extent not preempted by applicable federal law, the laws of the State of Maryland, without regard to any conflict of laws principles thereof.
|
8.11.
|
Release
. Any payment to a Participant or Beneficiary in accordance with the provisions of the Plan shall, to the extent thereof, be in full satisfaction of all claims arising under, or with respect to, the Plan against the Committee and the Company. The Committee may require such Participant or Beneficiary, as a condition precedent to such payment, to execute a receipt and release in a form prescribed by the Committee.
|
8.12.
|
Captions
. The captions contained in this Plan are for convenience only and shall have no bearing on the meaning, construction or interpretation of the Plan’s provisions.
|
8.13.
|
Validity
. The invalidity or unenforceability of any provision of this Plan shall not affect the validity or enforceability of any other provision of this Plan, which shall remain in full force and effect.
|
|
|
|
|
|
|
|
|
|
|
Kilroy Realty Corporation
|
|
||
|
|
|
|
|
||
|
|
|
By:
|
|
/s/ Tyler H. Rose
|
|
|
|
|
|
|
Tyler H. Rose
Executive Vice President and
Chief Financial Officer |
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ Joseph E. Magri
|
|
|
|
|
|
|
Joseph E. Magri
Senior Vice President and Corporate Counsel
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
||||||||||||||||||
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
Earnings:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income (loss) from continuing operations
(1)
|
|
$
|
303,798
|
|
|
$
|
238,604
|
|
|
$
|
59,313
|
|
|
$
|
14,935
|
|
|
$
|
(5,475
|
)
|
Plus Fixed Charges:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense (including amortization of loan costs)
|
|
55,803
|
|
|
57,682
|
|
|
67,571
|
|
|
75,870
|
|
|
79,114
|
|
|||||
Capitalized interest and loan costs
|
|
49,460
|
|
|
51,965
|
|
|
47,090
|
|
|
35,368
|
|
|
19,792
|
|
|||||
Estimate of interest within rental expense
|
|
3,032
|
|
|
3,138
|
|
|
4,270
|
|
|
4,073
|
|
|
3,475
|
|
|||||
Distributions on Cumulative Redeemable Preferred units
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,541
|
|
|||||
Fixed Charges
|
|
108,295
|
|
|
112,785
|
|
|
118,931
|
|
|
115,311
|
|
|
105,922
|
|
|||||
Plus: Amortization of capitalized interest
(2)
|
|
9,865
|
|
|
8,412
|
|
|
7,001
|
|
|
5,823
|
|
|
5,318
|
|
|||||
Less: Capitalized interest and loan costs
|
|
(49,460
|
)
|
|
(51,965
|
)
|
|
(47,090
|
)
|
|
(35,368
|
)
|
|
(19,792
|
)
|
|||||
Less: Distributions on Cumulative Redeemable Preferred units
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,541
|
)
|
|||||
Earnings
|
|
372,498
|
|
|
307,836
|
|
|
138,155
|
|
|
100,701
|
|
|
82,432
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Combined Fixed Charges and Preferred Dividends:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed Charges (from above)
|
|
108,295
|
|
|
112,785
|
|
|
118,931
|
|
|
115,311
|
|
|
105,922
|
|
|||||
Preferred Dividends
|
|
13,250
|
|
|
13,250
|
|
|
13,250
|
|
|
13,250
|
|
|
10,567
|
|
|||||
Combined Fixed Charges and Preferred Dividends
|
|
$
|
121,545
|
|
|
$
|
126,035
|
|
|
$
|
132,181
|
|
|
$
|
128,561
|
|
|
$
|
116,489
|
|
Consolidated ratio of earnings to fixed charges
|
|
3.44x
|
|
2.73x
|
|
1.16x
|
|
0.87x
|
|
0.78x
|
||||||||||
Consolidated ratio of earnings to combined fixed charges and preferred dividends
|
|
3.06x
|
|
2.44x
|
|
1.05x
|
|
0.78x
|
|
0.71x
|
||||||||||
(Surplus) Deficiency
|
|
$
|
(250,953
|
)
|
|
$
|
(181,801
|
)
|
|
$
|
(5,974
|
)
|
|
$
|
27,860
|
|
|
$
|
34,057
|
|
|
|
Year Ended December 31,
|
||||||||||||||||||
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||
Earnings:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income (loss) from continuing operations
(1)
|
|
$
|
303,798
|
|
|
$
|
238,604
|
|
|
$
|
59,313
|
|
|
$
|
14,935
|
|
|
$
|
(5,475
|
)
|
Plus Fixed Charges:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense (including amortization of loan costs)
|
|
55,803
|
|
|
57,682
|
|
|
67,571
|
|
|
75,870
|
|
|
79,114
|
|
|||||
Capitalized interest and loan costs
|
|
49,460
|
|
|
51,965
|
|
|
47,090
|
|
|
35,368
|
|
|
19,792
|
|
|||||
Estimate of interest within rental expense
|
|
3,032
|
|
|
3,138
|
|
|
4,270
|
|
|
4,073
|
|
|
3,475
|
|
|||||
Fixed Charges
|
|
108,295
|
|
|
112,785
|
|
|
118,931
|
|
|
115,311
|
|
|
102,381
|
|
|||||
Plus: Amortization of capitalized interest
(2)
|
|
9,865
|
|
|
8,412
|
|
|
7,001
|
|
|
5,823
|
|
|
5,318
|
|
|||||
Less: Capitalized interest and loan costs
|
|
(49,460
|
)
|
|
(51,965
|
)
|
|
(47,090
|
)
|
|
(35,368
|
)
|
|
(19,792
|
)
|
|||||
Earnings
|
|
$
|
372,498
|
|
|
$
|
307,836
|
|
|
$
|
138,155
|
|
|
$
|
100,701
|
|
|
$
|
82,432
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ratio of earnings to fixed charges
|
|
3.44
|
x
|
|
2.73
|
x
|
|
1.16
|
x
|
|
0.87
|
x
|
|
0.81
|
x
|
NAME OF SUBSIDIARY
OR ORGANIZATION
|
|
STATE OF INCORPORATION
OR FORMATION
|
Kilroy Realty, L.P.
|
|
Delaware
|
Kilroy Realty Finance, Inc.
|
|
Delaware
|
Kilroy Realty Finance Partnership, L.P.
|
|
Delaware
|
Kilroy Services, LLC
|
|
Delaware
|
Kilroy Realty TRS, Inc.
|
|
Delaware
|
Kilroy Realty Management, L.P.
|
|
Delaware
|
Kilroy Realty 303, LLC
|
|
Delaware
|
KR Westlake Terry, LLC
|
|
Delaware
|
KR 6255 Sunset, LLC
|
|
Delaware
|
KR MML 12701, LLC
|
|
Delaware
|
KR 690 Middlefield, LLC
|
|
Delaware
|
KR Lakeview, LLC
|
|
Delaware
|
KR Tribeca West, LLC
|
|
Delaware
|
KR 331 Fairchild, LLC
|
|
Delaware
|
KR Hollywood, LLC
|
|
Delaware
|
KR 350 Mission, LLC
|
|
Delaware
|
Fremont Lake Union Center, LLC
|
|
Delaware
|
KR 555 Mathilda, LLC
|
|
Delaware
|
KR Redwood City Member, LLC
|
|
Delaware
|
Redwood City Partners, LLC
|
|
Delaware
|
KR Academy, LLC
|
|
Delaware
|
KR 401 Terry, LLC
|
|
Delaware
|
KR Mission Bay, LLC
|
|
Delaware
|
KR Flower Mart, LLC
|
|
Delaware
|
KR SFFGA, LLC
|
|
Delaware
|
KR CFM, Inc.
|
|
California
|
KR 333 Dexter, LLC
|
|
Delaware
|
KR 330 Dexter, LLC
|
|
Delaware
|
KR 400 Aurora, LLC
|
|
Delaware
|
KR 401 Dexter, LLC
|
|
Delaware
|
KR 100 Hooper, LLC
|
|
Delaware
|
100 First Street Member, LLC
|
|
Delaware
|
KR 100 First Street Owner, LLC
|
|
Delaware
|
201 Third Street Member, LLC
|
|
Delaware
|
KR 201 Third Street Owner, LLC
|
|
Delaware
|
303 Second Street Member, LLC
|
|
Delaware
|
KR 303 Second Street Owner, LLC
|
|
Delaware
|
KR Terra Bella, LLC
|
|
Delaware
|
KR Menlo Park, LLC
|
|
Delaware
|
KR WMC, LLC
|
|
Delaware
|
KR 501 Santa Monica, LLC
|
|
Delaware
|
KR 12400 High Bluff, LLC
|
|
Delaware
|
KR Chesapeake Commons, LLC
|
|
Delaware
|
KR Sunset Weho, LLC
|
|
Delaware
|
KR 1701 Page Mill, LLC
|
|
Delaware
|
NAME OF SUBSIDIARY
OR ORGANIZATION
|
|
STATE OF INCORPORATION
OR FORMATION
|
Kilroy Services, LLC
|
|
Delaware
|
Kilroy Realty Finance Partnership, L.P.
|
|
Delaware
|
Kilroy Realty TRS, Inc.
|
|
Delaware
|
Kilroy Realty Management, L.P.
|
|
Delaware
|
Kilroy Realty 303, LLC
|
|
Delaware
|
KR Westlake Terry, LLC
|
|
Delaware
|
KR 6255 Sunset, LLC
|
|
Delaware
|
KR MML 12701, LLC
|
|
Delaware
|
KR 690 Middlefield, LLC
|
|
Delaware
|
KR Lakeview, LLC
|
|
Delaware
|
KR Tribeca West, LLC
|
|
Delaware
|
KR 331 Fairchild, LLC
|
|
Delaware
|
KR Hollywood, LLC
|
|
Delaware
|
KR 350 Mission, LLC
|
|
Delaware
|
Fremont Lake Union Center, LLC
|
|
Delaware
|
KR 555 Mathilda, LLC
|
|
Delaware
|
KR Redwood City Member, LLC
|
|
Delaware
|
Redwood City Partners, LLC
|
|
Delaware
|
KR Academy, LLC
|
|
Delaware
|
KR 401 Terry, LLC
|
|
Delaware
|
KR Mission Bay, LLC
|
|
Delaware
|
KR Flower Mart, LLC
|
|
Delaware
|
KR SFFGA, LLC
|
|
Delaware
|
KR 333 Dexter, LLC
|
|
Delaware
|
KR 330 Dexter, LLC
|
|
Delaware
|
KR 400 Aurora, LLC
|
|
Delaware
|
KR 401 Dexter, LLC
|
|
Delaware
|
KR 100 Hooper, LLC
|
|
Delaware
|
100 First Street Member, LLC
|
|
Delaware
|
KR 100 First Street Owner, LLC
|
|
Delaware
|
201 Third Street Member, LLC
|
|
Delaware
|
KR 201 Third Street Owner, LLC
|
|
Delaware
|
303 Second Street Member, LLC
|
|
Delaware
|
KR 303 Second Street Owner, LLC
|
|
Delaware
|
KR Terra Bella, LLC
|
|
Delaware
|
KR Menlo Park, LLC
|
|
Delaware
|
KR WMC, LLC
|
|
Delaware
|
KR 501 Santa Monica, LLC
|
|
Delaware
|
KR 12400 High Bluff, LLC
|
|
Delaware
|
KR Chesapeake Commons, LLC
|
|
Delaware
|
KR Sunset Weho, LLC
|
|
Delaware
|
KR 1701 Page Mill, LLC
|
|
Delaware
|
1.
|
I have reviewed this annual report on Form 10-K of Kilroy Realty Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ John Kilroy
|
John Kilroy
|
President and Chief Executive Officer
|
1.
|
I have reviewed this annual report on Form 10-K of Kilroy Realty Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Tyler H. Rose
|
Tyler H. Rose
|
Executive Vice President and
Chief Financial Officer
|
1.
|
I have reviewed this annual report on Form 10-K of Kilroy Realty, L.P.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ John Kilroy
|
John Kilroy
|
President and Chief Executive Officer
|
Kilroy Realty Corporation, sole general partner of
Kilroy Realty, L.P.
|
1.
|
I have reviewed this annual report on Form 10-K of Kilroy Realty, L.P.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's Board of Directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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/s/ Tyler H. Rose
|
Tyler H. Rose
|
Executive Vice President and
Chief Financial Officer
|
Kilroy Realty Corporation, sole general partner of
Kilroy Realty, L.P.
|
(i)
|
the accompanying Annual Report on Form 10-K of the Company for the year ended
December 31, 2016
(the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and
|
(ii)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ John Kilroy
|
|
John Kilroy
|
|
President and Chief Executive Officer
|
|
|
|
Date:
|
February 14, 2017
|
(i)
|
the accompanying Annual Report on Form 10-K of the Company for the year ended
December 31, 2016
(the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and
|
(ii)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Tyler H. Rose
|
|
Tyler H. Rose
|
|
Executive Vice President and
Chief Financial Officer
|
|
|
|
Date:
|
February 14, 2017
|
(i)
|
the accompanying Annual Report on Form 10-K of the Operating Partnership for the year ended
December 31, 2016
(the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and
|
(ii)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Operating Partnership.
|
/s/ John Kilroy
|
|
John Kilroy
|
|
President and Chief Executive Officer
|
|
Kilroy Realty Corporation, sole general partner of
Kilroy Realty, L.P.
|
|
|
|
Date:
|
February 14, 2017
|
(i)
|
the accompanying Annual Report on Form 10-K of the Operating Partnership for the year ended
December 31, 2016
(the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and
|
(ii)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Operating Partnership.
|
/s/ Tyler H, Rose
|
|
Tyler H. Rose
|
|
Executive Vice President and
Chief Financial Officer
|
|
Kilroy Realty Corporation, sole general partner of
Kilroy Realty, L.P.
|
|
|
|
Date:
|
February 14, 2017
|