Market Overview

Kilroy Realty Signs 100,850 Square Foot Office Lease at 250 Brannan Street in San Francisco


Kilroy Realty Corporation (NYSE:KRC) today announced that
it has signed a 12-year lease with a publicly traded multinational
software company for 100,850 square feet of office space at 250 Brannan
Street, located in San Francisco's South of Market (SOMA) district. The
prior lease was scheduled to expire in 2019. Acquired by KRC in 2011,
250 Brannan Street is a three-story, historic brick and timber building
located just blocks away from AT&T Stadium, the soon-to-be expanded Muni
Metro T Third Line and some of San Francisco's most renowned
restaurants, shops and cultural institutions.

KRC's Brannan Street properties have continued to generate strong tenant
demand. In May, the company executed a 375,000 square foot transaction
with Cruise Automation encompassing 301, 333 and the to-be-acquired 345
Brannan. "There is huge demand placed on premium quality creative space
by San Francisco's technology tenants. Kilroy's Brannan Street portfolio
represents the best the market has to offer, as evidenced by this recent
leasing activity," said Mike Brown, Executive Managing Director at
Newmark Cornish & Carey, who represented KRC at 250 Brannan. "Rent was
up significantly over the prior lease, which bodes extremely well for
KRC's Flower Mart project that will be the transformative highlight of
the Central SOMA Redevelopment Plan and is only three blocks from the
Brannan Street properties."

The lease adds to the tremendous leasing activity KRC has completed year
to date, which totals more than 1.9 million square feet of space. The
declining availability of space and rapid execution of leases underscore
the dynamics of high-growth companies continuing to cluster and expand
in innovative centers adjacent to transportation and amenities and using
the work environment to retain and attract the modern workforce.

About Kilroy Realty Corporation. Kilroy Realty Corporation
(KRC), a publicly traded real estate investment trust and member of the
S&P MidCap 400 Index, is one of the West Coast's premier landlords. The
company has over 70 years of experience developing, acquiring and
managing office and mixed-use real estate assets. 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 June 30, 2018, the company's stabilized portfolio totaled
approximately 13.9 million square feet of office space located in the
coastal regions of Los Angeles, Orange County, San Diego, the San
Francisco Bay Area and Greater Seattle and 200 residential units located
in the Hollywood submarket of Los Angeles. In addition, KRC had three
projects under construction totaling approximately 1.0 million square
feet of office space, 608 residential units and 120,000 square feet of
retail space as well as two projects in the tenant improvement phase
totaling approximately 1.2 million square feet of office and PDR space.
The office components of the two projects are fully leased to Adobe and

The company has been recognized by GRESB as the North American leader in
office sustainability for the last four years and is listed in the Dow
Jones Sustainability World Index. At the end of the second quarter, the
company's stabilized portfolio was 59% LEED certified and 76% of
eligible properties were ENERGY STAR certified. More information is
available at

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 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
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, 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, 2017 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 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 we are required to do so in connection with our
ongoing requirements under federal securities laws.

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