Market Overview

Kilroy Realty Corporation Announces Commencement of Public Offering of Common Stock

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Kilroy Realty Corporation (NYSE:KRC) announced today that
it has commenced a public offering of 5,000,000 shares of common stock
in connection with the forward sale agreements described below, subject
to market and other conditions. The forward purchasers (as defined
below) or their respective affiliates expect to grant to the
underwriters a 30-day option to purchase up to an additional 750,000
shares of common stock.

Barclays and Citigroup will act as joint book-running managers of the
offering.

The Company expects to enter into forward sale agreements with
affiliates of each of Barclays and Citigroup (in such capacity, the
"forward purchasers") with respect to 5,000,000 shares of the Company's
common stock (or an aggregate of 5,750,000 shares of its common stock if
the underwriters exercise their option to purchase additional shares in
full). In connection with the forward sale agreements, the forward
purchasers or their respective affiliates, at the Company's request, are
expected to borrow from third parties and sell to the underwriters an
aggregate of 5,000,000 shares of the Company's common stock (or an
aggregate of 5,750,000 shares of its common stock if the underwriters
exercise their option to purchase additional shares in full) for resale
by the underwriters in such offering. However, a forward purchaser or
its respective affiliate, as applicable, is not required to borrow
shares if, after using commercially reasonable efforts, it is unable to
borrow such shares, or if borrowing costs exceed a specified threshold
or if certain specified conditions have not been satisfied. If any
forward purchaser or its respective affiliate, as applicable, does not
deliver and sell all of the shares of the Company's common stock to be
sold by it to the underwriters, the Company will issue and sell to the
underwriters a number of shares of its common stock equal to the number
of shares that such forward purchaser or its respective affiliate, as
applicable, does not deliver and sell, and the number of shares
underlying the relevant forward sale agreement will be decreased by the
number of shares that the Company issues and sells.

The Company will not receive any proceeds from the sale of shares of its
common stock by the forward purchasers or their respective affiliates to
the underwriters. Instead, subject to its right to elect cash or net
share settlement subject to certain conditions, the Company intends to
issue and deliver to the forward purchasers, upon physical settlement of
such forward sale agreements on one or more dates specified by the
Company occurring on or prior to August 1, 2019, an aggregate of
5,000,000 shares of its common stock (or an aggregate of 5,750,000
shares of its common stock if the underwriters exercise their option to
purchase additional shares in full) in exchange for cash proceeds per
share equal to the applicable forward sale price per share, which will
initially be equal to the public offering price per share of common
stock in the offering less underwriting discounts and commissions. The
initial forward sale price is subject to subsequent adjustments from
time to time as provided in the forward sale agreements.

The Company intends to use the net proceeds, if any, it receives upon
the settlement of the forward sale agreements for general corporate
purposes, which may include funding development projects, acquiring land
and properties and repaying outstanding indebtedness, which may include
borrowings, if any, under the operating partnership's revolving credit
facility and borrowings under the operating partnership's term loan
facility. Pending application of the net proceeds for those purposes,
the operating partnership may temporarily invest such proceeds in
marketable securities.

The offering is being made pursuant to an effective shelf registration
statement and a preliminary prospectus supplement and accompanying
prospectus filed by the Company with the Securities and Exchange
Commission ("SEC"). The preliminary prospectus supplement and
accompanying prospectus related to the offering have been filed with the
SEC and are available on the SEC's website at http://www.sec.gov.
When available, copies of the preliminary prospectus supplement and
accompanying prospectus for the offering may be obtained by contacting
Barclays Capital Inc., via email: barclaysprospectus@broadridge.com,
telephone: (888) 603-5847 or standard mail: c/o Broadridge Financial
Solutions, 1155 Long Island Avenue, Edgewood, NY 11717; or Citigroup
Global Markets Inc., via telephone: (800) 831-9146 or standard mail:
Attention: Broadridge Financial Solutions, 1155 Long Island Avenue,
Edgewood, NY 11717.

This press release shall not constitute an offer to sell or the
solicitation of an offer to buy any securities nor will there be any
offer or sale of these securities in any jurisdiction in which or to any
person to whom such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such
jurisdiction.

About Kilroy Realty Corporation. With over 70 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.

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 in the
prospectus supplement and accompanying prospectus related to the
offering, as well as our other filings with the SEC that are
incorporated by reference in such prospectus supplement and accompanying
prospectus. 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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