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Kilroy Realty Releases 3rd Quarter Financial Results [Manufacturing Close - Up](Manufacturing Close - Up Via Acquire Media NewsEdge) Kilroy Realty Corp. reported financial results for its third quarter ended September 30. Third Quarter Highlights -Funds from operations (FFO) of $0.69 per share -Net income available to common stockholders of $0.18 per share, including a gain from a property disposition of $0.07 per share -Revenues from continuing operations of $129.0 million -Signed new or renewing leases in the stabilized portfolio totaling 520,489 square feet -At September 30, stabilized portfolio was 94.1 percent occupied and 95.6 percent leased -Delivered and stabilized a 587,429 square-foot, three-building office project located in Silicon Valley's Sunnyvale submarket -Executed a 15-year, 93,000 square-foot lease for the entire historical office component of Columbia Square, a 685,000 square- foot, mixed-use development project in Los Angeles' Hollywood submarket -Executed a 12-year, 334,000 square-foot lease for 100 percent of the office development project at Crossing/900 in Redwood City, CA -Completed the sale of a 67,000 square-foot property in Irvine, CA, for gross proceeds of $15.1 million -Repaid all $83.0 million of Series B unsecured senior notes upon maturity in August -Issued, in an underwritten public offering, $400.0 million of 15- year unsecured senior notes that pay interest semi-annually at 4.25 percent Recent Activity -In October, commenced construction on a 73,000 square-foot office building in San Diego's Del Mar submarket Results for the Quarter and Nine Months ended September 30, According to a release on October 28, the Company noted that for its third quarter ended September 30, KRC reported FFO of $60.4 million, or $0.69 per share, compared to $55.9 million, or $0.69 per share, in the third quarter of 2013. Net income available to common stockholders in the third quarter was $15.7 million, or $0.18 per share, compared to $5.6 million, or $0.07 per share, in the year- earlier period. Net income for the 2014 third quarter included an approximate $5.6 million gain from a property disposition. Results for the third quarter of 2014 included $0.02 per share of net lease termination fees and in the same quarter last year, results included a net $0.05 per share cash payment related to the default of a prior tenant. Including discontinued operations, the company's revenues in the third quarter of 2014 totaled $131.1 million, up from $127.8 million in the third quarter of 2013. For the first nine months of 2014, KRC reported FFO of $180.9 million, or $2.06 per share, compared to $160.1 million, or $1.99 per share, in the first nine months of 2013. Net income available to common stockholders in the first nine months of 2014 was $139.4 million, or $1.63 per share, compared to $11.3 million, or $0.13 per share, in the same period of 2013. Net income for the 2014 nine- month period included approximately $113.9 million in gains from property and land dispositions. Results for the first nine months of 2014 included $0.06 per share of net lease termination fees and in the same period last year, results included approximately $0.11 per share of cash payments related to prior tenant matters. Including discontinued operations, the company's revenues for the first nine months of 2014 totaled $386.6 million, up from $369.8 million in the first nine months of 2013. Revenues from continuing operations for the first nine months of 2014 totaled $380.0 million, up from $338.5 million for the first nine months of 2013. All per share amounts in this report are presented on a diluted basis. Operating and Leasing Activity At September 30, KRC's stabilized portfolio encompassed approximately 13.5 million square feet of office space located in Los Angeles, Orange County, San Diego, the San Francisco Bay Area and greater Seattle. During the third quarter, the company signed new or renewing leases on 520,489 square feet of space in the stabilized portfolio. Also, during the third quarter, KRC delivered and stabilized a 587,429 square-foot, three-building office project located in Sunnyvale, CA. The campus is 100 percent leased to LinkedIn Corp. The stabilized portfolio was 94.1 percent occupied at September 30, compared to 93.6 percent at June 30, and 92.2 percent at September 30, 2013. At September 30, the company's stabilized portfolio was 95.6 percent leased. Real Estate Investment Activity During the third quarter, KRC executed a 15-year lease with creative workspace provider NeueHouse for the entire historical office component of its Columbia Square mixed-use development project located in Hollywood, CA, and a 12-year lease with cloud- storage and content management services provider Box Inc. for 100 percent of its Crossing/900 office project under construction in Redwood City, CA. With these transactions in place, 79 percent of KRC's office development under construction was pre-leased. In October, KRC commenced construction on a 73,000 square-foot office building, The Heights at Del Mar, located in the Del Mar submarket of San Diego. The company expects to invest approximately $45 million in the development project, which is scheduled for completion in the fourth quarter of 2015. Within its existing development program, as of October 2014, KRC had six development projects under construction aggregating just under 2.1 million square feet with scheduled completion dates ranging from year-end 2014 through 2016. The company estimates its total investment in these six projects will be approximately $1.2 billion. KRC also completed the sale of a 67,000 square-foot office property located in Irvine, CA, during the quarter, generating gross proceeds of approximately $15 million, and executed contracts to sell two additional properties located in San Rafael, CA, and Orange, CA, that together total 229,000 square feet and are expected to generate aggregate proceeds of approximately $60 million. The two transactions are anticipated to close in the fourth quarter of 2014. Financing Activity In August, KRC issued $400.0 million of unsecured senior notes in an underwritten public offering. The notes pay interest semi- annually at 4.25 percent and mature in August 2029. During the quarter, the company also repaid all $83.0 million of its Series B unsecured senior notes upon maturity in August, as well as $37.0 million of its 4.25 percent Exchangeable Notes due November 2014 as a result of early redemptions. Management Comments "With our West Coast real estate markets among the most dynamic in the nation, KRC's operating teams are delivering strong results across all our strategic priorities," said John Kilroy, Jr., the company's chairman, president and chief executive officer. "Vacancies within our stabilized portfolio are now at frictional levels, our active office development pipeline at quarter end was approximately 79 percent pre-leased, and our same-store operating results have benefited from rising rents. Equally important, our unrelenting focus on top quality, contemporary office space located in highly sought after urban locales is strengthening the KRC franchise among our potential tenants and enhancing the long-term value of our portfolio." Kilroy Realty Corp. is a company focusing in owning, developing, acquiring and managing real estate assets in West Coast real estate markets. More information: http://www.kilroyrealty.com ((Comments on this story may be sent to [email protected])) (c) 2014 ProQuest Information and Learning Company; All Rights Reserved. |