Commitments and Contingencies (Tables)

9 Months Ended

Sep. 30, 2012

Commitments and Contingencies Disclosure [Abstract]

Schedule of Contractual Expiration Dates for Ground Leases [Table Text Block]

The following table summarizes our properties which are held subject to long-term noncancellable ground lease obligations and the respective contractual expiration dates:



Property	Contractual Expiration Date⁽¹⁾
601 108th Ave NE in Bellevue, Washington	November 2093
701, 801 and 837 N. 34th Street in Seattle, Washington ⁽²⁾	December 2041
Kilroy Airport Center Phases I, II, and III in Long Beach, California	July 2084
360 3rd Street in San Francisco, California ⁽³⁾	December 2022

____________________


(1)	Reflects the contractual expiration date prior to the impact of any extension or purchase options held by the Company.


(2)	The Company has three 10-year and one 45-year extension option for this ground lease which if exercised would extend the expiration date to December 2116.


(3)	The Company has an option to acquire the land underlying this ground lease during the period from November 2012 through October 2013 for a total estimated purchase price not to exceed $27.5 million.

Schedule Of Future Minimum Rental Payments For Ground Leases [Table Text Block]

The future minimum rent commitment under our ground leases as of September 30, 2012 is summarized as follows:



Year	(in thousands)
Remaining 2012	$	1,069
2013	3,685
2014	3,095
2015	3,095
2016	3,095
Thereafter	163,019
Total^{(1)(2)(3)(4)(5)}	$	177,058

____________________


(1)	Reflects the minimum ground lease obligations before the impact of ground lease extension options.

(2)

One of our ground lease obligations is subject to a fair market value adjustment every five years; however, the lease includes ground rent subprotection and infrastructure rent credits which currently limit our annual rental obligations to $1.0 million. The contractual obligations for that ground lease included above assumes the lesser of $1.0 million or annual lease rental obligation in effect as of September 30, 2012.

(3)

One of our ground lease obligations includes a component which is based on the percentage of gross income that exceeds the minimum ground rent. The minimum rent is subject to increases every five years based on 50% of the average annual percentage rent for the previous five years. Currently, gross income does not exceed the threshold requiring us to pay percentage rent. The contractual obligations included above assumes the annual lease rental obligation in effect as of September 30, 2012.


(4)	One of our ground lease obligations is subject to a fair market value adjustment every five years based on a combination of CPI adjustments and third-party appraisals limited to maximum increases annually. The contractual obligations included above assumes the annual lease rental obligation in effect as of September 30, 2012.


(5)	The contractual obligation included for one of our ground lease obligations assumes that the Company will exercise the land purchase option during 2012 and acquire the land under the ground lease in the second quarter of 2013. The amount presented above excludes the estimated purchase price which is not to exceed $27.5 million.