Kilroy Realty Corporation (NYSE: KRC) (the “Company”), today
announced that its operating partnership, Kilroy Realty, L.P. (the
“Borrower”), has closed on an amended and restated senior unsecured
revolving credit facility that permits borrowings of up to $1.1
billion (the “Revolving Credit Facility”). The term of the
Revolving Credit Facility was extended three years and goes through
July 31, 2028 before extension options.
“We are extremely pleased to announce the recast of our
revolving credit facility, which has allowed us to extend the
maturity of the facility by three years, while maintaining total
available borrowing capacity,” stated Angela Aman, Chief Executive
Officer of the Company. “Our strong banking partnerships continue
to provide Kilroy with robust liquidity and financial flexibility
as we look to capture outsized growth opportunities and create
value for all stakeholders.”
The Revolving Credit Facility also features a
sustainability-linked pricing component whereby the pricing can
improve by 1 basis point per annum if the Borrower meets certain
sustainability performance targets as verified by an independent
third-party. Additionally, the Borrower may elect to borrow,
subject to additional lender commitments and the satisfaction of
certain conditions, up to an additional $500 million under the
Revolving Credit Facility pursuant to an accordion feature. The
Borrower expects to use the Revolving Credit Facility for general
corporate purposes, including funding acquisition, development and
redevelopment projects, and repaying debt.
Revolving Credit Facility Key Terms
Overview
Amended and Restated
Revolving Credit
Facility
Old Revolving
Credit Facility
Amount
$1.1B
$1.1B
SOFR Borrowing Spread (1)
90 bps
90 bps
SOFR Credit Spread Adjustment
10 bps
10 bps
Annual Facility Fee (1)
20 bps
20 bps
Maturity Date before Extension Options
July 31, 2028
July 31, 2025
Extension Options
Two 6-Month
Two 6-Month
(1)
The borrowing spread and facility fee are
variable and subject to a ratings-based pricing grid based on the
Borrower’s credit rating.
The Revolving Credit Facility was syndicated to a group of
twelve U.S. and international banks led by JPMorgan Chase Bank,
N.A., BofA Securities, Inc., Wells Fargo Securities, LLC, PNC
Capital Markets LLC, and U.S. Bank National Association, which
acted as joint lead arrangers and joint bookrunners. JPMorgan Chase
Bank, N.A. is the administrative agent for the Revolving Credit
Facility and Bank of America, N.A. is the syndication agent. BMO
Capital Markets Corp., The Bank of Nova Scotia, and Sumitomo Mitsui
Banking Corporation acted as joint lead arrangers. Wells Fargo
Bank, N.A., PNC Bank, National Association, U.S. Bank National
Association, Barclays Bank PLC, BMO Bank, N.A., Sumitomo Mitsui
Banking Corporation, and The Bank of Nova Scotia acted as
co-documentation agents. Other participants in the Revolving Credit
Facility include KeyBank National Association, The Bank of New York
Mellon, and Associated Bank, National Association. J.P. Morgan
Securities LLC and BofA Securities, Inc. acted as sustainability
structuring agents.
In addition, the Company paid down its existing $520 million
senior unsecured term loan facility (the “Existing Term Loan
Facility”) by $200 million and extended the final maturity on an
aggregate principal amount of $200 million of the remaining $320
million by 12 months to October 3, 2027, inclusive of exercising
its two one-year extension options (the “New Term Loan Facility”).
The borrowing rate under the New Term Loan Facility is variable and
subject to a ratings-based pricing grid, currently calculated as
one-month Adjusted Secured Overnight Financing Rate (“SOFR”) plus
95-basis points, unchanged from the prior rate. The New Term Loan
Facility was syndicated to a group of twelve U.S. and international
banks led by JPMorgan Chase Bank, N.A., BofA Securities, Inc.,
Wells Fargo Securities, LLC, PNC Capital Markets LLC, U.S. Bank
National Association, and The Bank of Nova Scotia, which acted as
joint lead arrangers and joint bookrunners.
About Kilroy Realty Corporation
Kilroy Realty Corporation (NYSE: KRC, the “Company”, “Kilroy”)
is a leading U.S. landlord and developer, with operations in San
Diego, Greater Los Angeles, the San Francisco Bay Area, Greater
Seattle and Austin. The Company has earned global recognition for
sustainability, building operations, innovation and design. As a
pioneer and innovator in the creation of a more sustainable real
estate industry, the Company’s approach to modern business
environments helps drive creativity and productivity for some of
the world’s leading technology, entertainment, life science and
business services companies.
The Company is a publicly traded real estate investment trust
(“REIT”) and 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. As of December 31,
2023, Kilroy’s stabilized portfolio totaled approximately 17.0
million square feet of primarily office and life science space that
was 85.0% occupied and 86.4% leased. The Company also had
approximately 1,000 residential units in Hollywood and San Diego,
which had a quarterly average occupancy of 92.5%. In addition, the
Company had two in-process life science redevelopment projects
totaling approximately 100,000 square feet with total estimated
redevelopment costs of $80.0 million and one approximately 875,000
square foot in-process development project with a total estimated
investment of $1.0 billion.
A Leader in Sustainability and Commitment to Corporate Social
Responsibility
Kilroy has a longstanding commitment to sustainability and
continues to be a recognized leader in our sector. For over a
decade, the Company and its sustainability initiatives have been
recognized with numerous honors, including being listed on the Dow
Jones Sustainability World Index, earning the GRESB five star
rating and being named a sector and regional leader in the
Americas. Other honors have included the Nareit Leader in the Light
Award, being named ENERGY STAR Partner of the Year and receiving
the ENERGY STAR highest honor of Sustained Excellence.
Kilroy is proud to have achieved carbon neutral operations
across our portfolio since 2020. The Company also has a
longstanding commitment to maintain high levels of LEED, Fitwel and
ENERGY STAR certifications across the portfolio.
A significant part of the Company’s foundation is its commitment
to enhancing employee growth, satisfaction and wellness while
maintaining a diverse and thriving culture. For the fifth year in a
row, the Company has been named to Bloomberg’s Gender Equality
Index, which recognizes companies committed to supporting 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. Forward-looking statements are inherently
subject to uncertainties, risks, changes in circumstances, trends
and factors that are difficult to predict, many of which are
outside of our control. Accordingly, actual performance, results
and events may vary materially from those indicated or implied in
the forward-looking statements, and you should not rely on the
forward-looking statements as predictions of future performance,
results or events. Numerous factors could cause actual future
performance, results and events to differ materially from those
indicated in the forward-looking statements, including, among
others: global market and general economic conditions, including
periods of heightened inflation, 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, Texas 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,
including bankruptcy, lack of liquidity or lack of funding and the
impact labor disruptions or strikes, such as episodic strikes in
the entertainment industry, may have on our tenants’ businesses;
our ability to re-lease property at or above current market rates;
reduced demand for office space, including as a result of remote
working and flexible working arrangements that allow work from
remote locations other than the employer's office premises; 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; changes in interest rates and 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 enactment or
implementations of, tax laws or other applicable laws, regulations
or legislation, as well as business and consumer reactions to such
changes; 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. These factors are not exhaustive and additional factors could
adversely affect our business and financial performance. For a
discussion of additional factors that could materially adversely
affect our business and financial performance, see the factors
included under the caption “Risk Factors” in our annual report on
Form 10-K for the year ended December 31, 2023 and our other
filings with the Securities and Exchange Commission. All
forward-looking statements are based on currently available
information and speak only as of the dates on which they are made.
We assume no obligation to update any forward-looking statement
made in this press release that becomes untrue because of
subsequent events, new information or otherwise, except to the
extent we are required to do so in connection with our ongoing
requirements under federal securities laws.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240306120082/en/
Eliott Trencher Executive Vice President, Chief Financial
Officer and Chief Investment Officer (310) 481-8587 or Taylor
Friend Senior Vice President, Treasurer (310) 481-8574
Kilroy Realty (NYSE:KRC)
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