Kilroy Realty Completes Acquisition of Development Opportunity in Vibrant South Lake Union Submarket of Seattle
Kilroy Realty Corporation (NYSE:KRC) announced today that it has completed the acquisition of its first development opportunity in the highly sought-after submarket of South Lake Union in Seattle, Washington for approximately $50 million. The acquisition includes a full city block site, 333 Dexter Avenue North, along with three smaller adjacent parcels, which in total aggregate 2.4 acres. They are in close proximity to leading global technology and life science innovators, including the Bill & Melinda Gates Foundation, Amazon.com, UW Medicine and most recently Facebook, which just announced its plans for a major expansion on Dexter Avenue. 333 Dexter is currently home to KING-TV Broadcasting.
Bounded by Dexter Avenue and Highway 99/Aurora Avenue, 333 Dexter is less than 500 yards from Seattle’s iconic Space Needle and has direct access to key regional transportation routes. South Lake Union is the recent beneficiary of significant state and municipal transportation infrastructure improvement projects with work currently underway to connect the east-west arterials adjacent to 333 Dexter to the amenity-rich Uptown neighborhood.
KRC has commenced the design phase for the project and has engaged The Miller Hull Partnership to assist in the planning for the development of two state-of-the-art, twelve-story office towers that will provide attractive amenities, vibrant retail and dynamic open public spaces. Existing zoning permits the development of approximately 700,000 square feet of office, residential and retail space. Subject to market conditions and final permits, construction could begin as early as 2016. KRC estimates its total investment in the project, including land, will total approximately $375 million, depending on the eventual mix of product types.
“333 Dexter will be a premier office location in South Lake Union. We expect demand to continue to grow in this neighborhood as many leading technology companies have selected this area as their new Seattle home and KRC is well positioned to capture this continuing growth,” said Mike Shields, senior vice president of KRC’s Pacific Northwest region.
“The development opportunity at 333 Dexter is consistent with our initiative of expanding our opportunity pipeline in strong performing submarkets driven by innovative and dynamic companies,” said John Kilroy, Jr. the company’s chairman, president and chief executive officer. “We expect to generate significant value by delivering the type of work environment that is most sought after in today’s market.”
About Kilroy Realty Corporation. With more than 65 years’ experience owning, developing, acquiring and managing real estate assets in West Coast real estate markets, Kilroy Realty Corporation (KRC), a publicly traded real estate investment trust and member of the S&P MidCap 400 Index, is one of the region’s premier landlords. The company provides physical work environments that foster creativity and productivity and serves a broad roster of dynamic, innovation-driven tenants, including technology, entertainment, digital media and health care companies.
At December 31, 2014, the company’s stabilized portfolio totaled 14.1 million square feet of office properties, all located in the coastal regions of greater Seattle, the San Francisco Bay Area, Los Angeles, Orange County and San Diego. The company is recognized by the Global Real Estate Sustainability Benchmark (GRESB) as the North American leader in sustainability and was ranked first among 151 North American participants across all asset types. At the end of the fourth quarter, the company’s properties were 39% LEED certified and 56% of eligible properties were ENERGY STAR certified. In addition, KRC had approximately 1.7 million square feet of new office and mixed-use development under construction with a total estimated investment of approximately $1.0 billion. More information is available at http://www.kilroyrealty.com.
Forward-Looking Statements. This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are based on our current expectations, beliefs and assumptions, and are not guarantees of future performance. Forward-looking statements are inherently subject to uncertainties, risks, changes in circumstances, trends and factors that are difficult to predict, many of which are outside of our control. Accordingly, actual performance, results and events may vary materially from those indicated in forward-looking statements, and you should not rely on forward-looking statements as predictions of future performance, results or events. Numerous factors could cause actual future performance, results and events to differ materially from those indicated in forward-looking statements, including, among others, risks associated with: investment in real estate assets, which are illiquid; trends in the real estate industry; significant competition, which may decrease the occupancy and rental rates of properties; the ability to successfully complete acquisitions and dispositions on announced terms; the ability to successfully operate acquired properties; the availability of cash for distribution and debt service and exposure of risk of default under debt obligations; adverse changes to, or implementations of, applicable laws, regulations or legislation; and the ability to successfully complete development and redevelopment projects on schedule and within budgeted amounts. These factors are not exhaustive. For a discussion of additional factors that could materially adversely affect our business and financial performance, see the factors included under the caption “Risk Factors” in our annual report on Form 10-K for the year ended December 31, 2014 and our other filings with the Securities and Exchange Commission. All forward-looking statements are based on information that was available, and speak only as of the date on which they are made. We assume no obligation to update any forward-looking statement made in this press release that becomes untrue because of subsequent events, new information or otherwise, except to the extent required in connection with ongoing requirements under U.S. securities laws.
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