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Kilroy Realty Breaks Floor on $940 Million Life Science Venture in South San Francisco

THE ANGEL–(BUSINESS WIRE) – Kilroy Realty Corporation (NYSE: KRC) announced today that after successfully leasing Kilroy Oyster Point Phase 1, it has begun construction on the second phase of its five-phase, 50-acre, 3-million-square-foot development project in South San Francisco, the West Coast’s largest, most dynamic community of life science companies and research institutions. Kilroy Oyster Point Phase 2 (“KOP 2”) comprises approximately 860,000 square feet in three buildings with an estimated total investment of $ 940 million.

The design of KOP 2 reflects the unique amenities and outdoor spaces that the company is known for and that meet the needs of biotechnology and pharmaceutical rental companies. The second phase will house a variety of amenities that serve all phases and will include two stand-alone buildings that will house a state-of-the-art fitness facility, conference center, and multiple dining and beverage options. It will also feature numerous outdoor meeting areas, including a large amphitheater, benefiting from the project’s waterfront location and tenants’ desire for outdoor collaboration and recreational areas.

KRC acquired the full waterfront development area, Oyster Point, in 2018, pursuing a long-term strategy to significantly increase its life science activities, including building a pipeline of strategically located land locations for future development.

In addition to Kilroy Oyster Point, KRC has three San Diego locations eligible for more than 700,000 square feet of life science development, including the Santa Fe Summit along the Route 56 corridor and 9514 Towne Center Drive and 4690 Executive Drive located in the University submarket Towne Center. Since the demand for high-quality life science space in preferred sub-markets is driving vacancy rates to historic lows, the company is preparing plans for further development starts at these locations.

“Our long-term commitment to understanding and serving the needs of life science and healthcare tenants is now paying off,” said John Kilroy, KRC Chairman and CEO. “The industry is experiencing accelerated growth and investment, and its potential impact on large sectors of our global economy is still in its infancy. We are well positioned to work with some of the most innovative companies in the life science sector and drive our own growth at KRC for years to come. ”

About Kilroy Realty Corporation. Kilroy Realty Corporation (NYSE: KRC, the “Company”, “KRC”) is a leading West Coast rental company and developer with a large presence in San Diego, greater Los Angeles, the San Francisco Bay Area and the Pacific Northwest. The company has earned global recognition for sustainability, building operations, innovation and design. As a pioneer and innovator in creating a more sustainable real estate industry, the company’s modern business approach helps fuel creativity, productivity and retention for some of the world’s leading technology, entertainment, life science and business services companies.

KRC is a publicly traded Real Estate Investment Trust (“REIT”) and a member of the S&P MidCap 400 Index with more than seven decades of experience developing, acquiring and managing office, life science and mixed-use projects.

KRC’s stabilized portfolio comprises around 14,000,000 square feet of mainly office and life science space. In addition, the company currently has 1,000 residential units in Hollywood and San Diego. Additionally, as of March 31, 2021, KRC had five ongoing development projects with an estimated total investment of $ 1.5 billion covering approximately 1.8 million square feet of office and life science space. 88% of the office and life science space was let.

A leader in sustainability and commitment to corporate social responsibility

KRC is listed on the Dow Jones Sustainability World Index and has been recognized by industry organizations around the world. KRC’s stabilized portfolio was 67% LEED certified, 41% Fitwel certified, the highest of any NGO, and 71% of eligible properties were ENERGY STAR certified as of March 31, 2021.

The company has been recognized as the listed sustainability leader in America for six of the last seven years by GRESB, the Global Real Estate Sustainability Benchmark. Other awards include the Leader in the Light Award from the National Association of Real Estate Investment Trust (NAREIT) for six consecutive years and ENERGY STAR Partner of the Year for eight years, as well as the highest ENERGY STAR award for sustained excellence in the last six years.

A large part of the company’s foundation is a commitment to improving employee growth, satisfaction and wellbeing while maintaining a diverse and thriving culture. For the second year in a row, the company has been included in the Bloomberg Gender Equality Index, which recognizes companies committed to promoting gender equality through policy development, representation and transparency.

More information is available at http://www.kilroyrealty.com.

Forward-Looking Statements. This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are based on our current expectations, beliefs and assumptions and are not guarantees of future performance. By their nature, forward-looking statements are subject to uncertainties, risks, changes in circumstances, trends and factors that are difficult to predict, many of which are beyond our control. Accordingly, actual performance, results and events could differ materially from those expressed or implied in any forward-looking statements and you should not rely on any forward-looking statements as predictions of future performance, results or events. Numerous factors could cause actual future performance, results and events to differ materially from those expressed in the forward-looking statements, including but not limited to: global market and general economic conditions and their effects on our liquidity and financial conditions and those of our tenants; adverse economic or real estate conditions in general, and particularly in the states of California and Washington; Risks associated with our investments in illiquid real estate investments and real estate industry trends; Failure or non-renewal of rental agreements by tenants; any significant decline in tenants’ businesses; our ability to sublet properties at or above current market prices; Regulatory compliance costs, including environmental remediation; the availability of cash for distribution and debt servicing and the risk of default on debt securities; Interest rate hikes and our ability to manage interest rate risk; the availability of financing on attractive terms or at all, which may adversely affect our future interest expenses and our ability to pursue development, redevelopment and acquisition opportunities and to refinance existing debt; a decline in real estate asset valuations, which may limit our ability to sell assets at attractive prices, obtain or maintain debt financing, and which may result in depreciation or impairment; significant competition that can reduce property occupancy and rental prices; potential losses that may not be covered by insurance; the ability to successfully complete acquisitions and divestitures on the terms announced; the ability to successfully operate acquired, developed and refurbished properties; the ability to successfully complete development and refurbishment projects on time and within budgeted amounts; Delays or denials in obtaining all necessary zoning, land use and other required permissions, government permits and permits for our development and redevelopment sites; Increases in expected capital expenditures, tenant improvement and / or leasing costs; Lease defaults on land on which some of our properties are located; adverse changes or adoption or implementation of tax laws or any other applicable law, regulation or statute, as well as business and consumer responses to such changes; Risks associated with joint venture investments, including our lack of sole decision-making power, our reliance on the financial condition of co-entrepreneurs, and disputes between us and our co-entrepreneurs; Environmental uncertainties and risks associated with natural disasters; our ability to maintain our REIT status; and uncertainties about the impact of the COVID-19 pandemic and restrictions intended to prevent it from spreading on our business and the economy in general. These factors are not intended to be exhaustive and additional factors could adversely affect our business and financial performance. For a discussion of additional factors that could materially affect our business and financial performance, see the factors listed under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2020, as well as in our other filings at the stock exchange supervisory authority. All forward-looking statements are based on currently available information and only apply as of the date of their publication. We undertake no obligation to update any forward-looking statements made in this press release that become untrue as a result of subsequent events, new information, or otherwise, unless we are required to do so in connection with our ongoing requirements under federal securities laws.

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