þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Kilroy Realty Corporation | Maryland | 95-4598246 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
Kilroy Realty, L.P. | Delaware | 95-4612685 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
12200 W. Olympic Boulevard, Suite 200, Los Angeles, California 90064 | ||
(Address of principal executive offices) (Zip Code) | ||
(310) 481-8400 | ||
(Registrant's telephone number, including area code) | ||
N/A | ||
(Former name, former address and former fiscal year, if changed since last report) |
Kilroy Realty Corporation | |||
Large accelerated filer þ | Accelerated filer o | Non-accelerated filer o | Smaller reporting company o |
(Do not check if a smaller reporting company) | |||
Kilroy Realty, L.P. | |||
Large accelerated filer o | Accelerated filer o | Non-accelerated filer þ | Smaller reporting company o |
(Do not check if a smaller reporting company) |
• | Combined reports better reflect how management and the analyst community view the business as a single operating unit; |
• | Combined reports enhance investors' understanding of the Company and the Operating Partnership by enabling them to view the business as a whole and in the same manner as management; |
• | Combined reports are more efficient for the Company and the Operating Partnership and result in savings in time, effort and expense; and |
• | Combined reports are more efficient for investors by reducing duplicative disclosure and providing a single document for their review. |
• | consolidated financial statements; |
• | the following notes to the consolidated financial statements: |
◦ | Note 5, Secured and Unsecured Debt of the Operating Partnership; |
◦ | Note 6, Noncontrolling Interests on the Company's Consolidated Financial Statements; |
◦ | Note 7, Stockholders' Equity of the Company; |
◦ | Note 8, Partners' Capital of the Operating Partnership; |
◦ | Note 15, Net Income (Loss) Available to Common Stockholders Per Share of the Company; |
◦ | Note 16, Net Income (Loss) Available to Common Unitholders Per Unit of the Operating Partnership; |
◦ | Note 18, Pro Forma Results of the Company; |
◦ | Note 19, Pro Forma Results of the Operating Partnership; |
• | "Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources of the Company"; |
• | "Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources of the Operating Partnership". |
Page | ||||
PART I-FINANCIAL INFORMATION | ||||
Item 1. | FINANCIAL STATEMENTS OF KILROY REALTY CORPORATION | |||
Item 1. | FINANCIAL STATEMENTS OF KILROY REALTY, L.P. | |||
Item 2. | ||||
Item 3. | ||||
Item 4. | CONTROLS AND PROCEDURES (KILROY REALTY CORPORATION AND KILROY REALTY, L.P.) | |||
PART II-OTHER INFORMATION | ||||
Item 1. | ||||
Item 1A. | ||||
Item 2. | ||||
Item 3. | ||||
Item 4. | ||||
Item 5. | ||||
Item 6. | ||||
September 30, 2011 | December 31, 2010 | ||||||
(unaudited) | |||||||
ASSETS | |||||||
REAL ESTATE ASSETS: | |||||||
Land and improvements (Note 2) | $ | 537,973 | $ | 491,333 | |||
Buildings and improvements (Note 2) | 2,881,504 | 2,435,173 | |||||
Undeveloped land and construction in progress (Note 1) | 328,785 | 290,365 | |||||
Total real estate held for investment | 3,748,262 | 3,216,871 | |||||
Accumulated depreciation and amortization | (732,162 | ) | (672,429 | ) | |||
Total real estate assets, net | 3,016,100 | 2,544,442 | |||||
CASH AND CASH EQUIVALENTS | 15,481 | 14,840 | |||||
RESTRICTED CASH (Note 14) | 25,436 | 1,461 | |||||
MARKETABLE SECURITIES (Note 12) | 5,213 | 4,902 | |||||
CURRENT RECEIVABLES, NET (Note 4) | 6,860 | 6,258 | |||||
DEFERRED RENT RECEIVABLES, NET (Note 4) | 103,668 | 89,052 | |||||
DEFERRED LEASING COSTS AND ACQUISITION-RELATED INTANGIBLE ASSETS, NET (Notes 2 and 3) | 155,757 | 131,066 | |||||
DEFERRED FINANCING COSTS, NET (Note 5) | 19,638 | 16,447 | |||||
PREPAID EXPENSES AND OTHER ASSETS, NET (Note 11) | 19,531 | 8,097 | |||||
TOTAL ASSETS | $ | 3,367,684 | $ | 2,816,565 | |||
LIABILITIES, NONCONTROLLING INTEREST AND EQUITY | |||||||
LIABILITIES: | |||||||
Secured debt, net (Notes 5 and 12) | $ | 473,997 | $ | 313,009 | |||
Exchangeable senior notes, net (Notes 5 and 12) | 305,115 | 299,964 | |||||
Unsecured senior notes, net (Notes 5 and 12) | 980,487 | 655,803 | |||||
Unsecured line of credit (Notes 5 and 12) | — | 159,000 | |||||
Accounts payable, accrued expenses and other liabilities | 93,050 | 68,525 | |||||
Accrued distributions (Note 16) | 22,565 | 20,385 | |||||
Deferred revenue and acquisition-related intangible liabilities, net (Note 3) | 95,120 | 79,322 | |||||
Rents received in advance and tenant security deposits | 29,369 | 29,189 | |||||
Total liabilities | 1,999,703 | 1,625,197 | |||||
COMMITMENTS AND CONTINGENCIES (Note 11) | |||||||
NONCONTROLLING INTEREST (Note 6): | |||||||
7.45% Series A Cumulative Redeemable Preferred units of the Operating Partnership | 73,638 | 73,638 | |||||
EQUITY: | |||||||
Stockholders' Equity (Note 7): | |||||||
Preferred stock, $.01 par value, 30,000,000 shares authorized: | |||||||
7.45% Series A Cumulative Redeemable Preferred stock, $.01 par value, 1,500,000 shares authorized, none issued and outstanding | — | — | |||||
7.80% Series E Cumulative Redeemable Preferred stock, $.01 par value, 1,610,000 shares authorized, issued and outstanding ($40,250 liquidation preference) | 38,425 | 38,425 | |||||
7.50% Series F Cumulative Redeemable Preferred stock, $.01 par value, 3,450,000 shares authorized, issued and outstanding ($86,250 liquidation preference) | 83,157 | 83,157 | |||||
Common stock, $.01 par value, 150,000,000 shares authorized, 58,464,412 and 52,349,670 shares issued and outstanding, respectively | 585 | 523 | |||||
Additional paid-in capital | 1,435,580 | 1,211,498 | |||||
Distributions in excess of earnings | (296,476 | ) | (247,252 | ) | |||
Total stockholders' equity | 1,261,271 | 1,086,351 | |||||
Noncontrolling interest: | |||||||
Common units of the Operating Partnership (Note 6) | 33,072 | 31,379 | |||||
Total equity | 1,294,343 | 1,117,730 | |||||
TOTAL LIABILITIES, NONCONTROLLING INTEREST AND EQUITY | $ | 3,367,684 | $ | 2,816,565 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
REVENUES: | ||||||||||||||||
Rental income | $ | 89,306 | $ | 72,135 | $ | 252,102 | $ | 196,883 | ||||||||
Tenant reimbursements | 7,683 | 6,156 | 21,469 | 18,261 | ||||||||||||
Other property income | 348 | 985 | 2,863 | 2,325 | ||||||||||||
Total revenues | 97,337 | 79,276 | 276,434 | 217,469 | ||||||||||||
EXPENSES: | ||||||||||||||||
Property expenses | 19,361 | 15,802 | 54,548 | 42,255 | ||||||||||||
Real estate taxes | 8,360 | 7,582 | 24,878 | 20,035 | ||||||||||||
Provision for bad debts | (5 | ) | (857 | ) | 141 | (843 | ) | |||||||||
Ground leases (Note 11) | 503 | 336 | 1,266 | 648 | ||||||||||||
General and administrative expenses | 6,355 | 7,273 | 20,355 | 21,096 | ||||||||||||
Acquisition-related expenses | 1,163 | 354 | 2,829 | 1,624 | ||||||||||||
Depreciation and amortization | 36,152 | 29,951 | 97,513 | 74,405 | ||||||||||||
Total expenses | 71,889 | 60,441 | 201,530 | 159,220 | ||||||||||||
OTHER (EXPENSES) INCOME: | ||||||||||||||||
Interest income and other net investment gains (Note 12) | 30 | 337 | 272 | 703 | ||||||||||||
Interest expense (Note 5) | (24,051 | ) | (15,853 | ) | (66,155 | ) | (40,897 | ) | ||||||||
Loss on early extinguishment of debt | — | — | — | (4,564 | ) | |||||||||||
Total other (expenses) income | (24,021 | ) | (15,516 | ) | (65,883 | ) | (44,758 | ) | ||||||||
INCOME FROM CONTINUING OPERATIONS | 1,427 | 3,319 | 9,021 | 13,491 | ||||||||||||
DISCONTINUED OPERATIONS (Note 14) | ||||||||||||||||
Net income from discontinued operations | 308 | 350 | 1,053 | 1,011 | ||||||||||||
Net gain on dispositions of discontinued operations | 12,555 | — | 12,555 | — | ||||||||||||
Total income from discontinued operations | 12,863 | 350 | 13,608 | 1,011 | ||||||||||||
NET INCOME | 14,290 | 3,669 | 22,629 | 14,502 | ||||||||||||
Net (income) loss attributable to noncontrolling common units of the Operating Partnership | (296 | ) | 4 | (320 | ) | (128 | ) | |||||||||
NET INCOME ATTRIBUTABLE TO KILROY REALTY CORPORATION | 13,994 | 3,673 | 22,309 | 14,374 | ||||||||||||
PREFERRED DISTRIBUTIONS AND DIVIDENDS: | ||||||||||||||||
Distributions to noncontrolling cumulative redeemable preferred units of the Operating Partnership | (1,397 | ) | (1,397 | ) | (4,191 | ) | (4,191 | ) | ||||||||
Preferred dividends | (2,402 | ) | (2,402 | ) | (7,206 | ) | (7,206 | ) | ||||||||
Total preferred distributions and dividends | (3,799 | ) | (3,799 | ) | (11,397 | ) | (11,397 | ) | ||||||||
NET INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS | $ | 10,195 | $ | (126 | ) | $ | 10,912 | $ | 2,977 | |||||||
(Loss) income from continuing operations available to common stockholders per common share - basic (Note 15) | $ | (0.05 | ) | $ | (0.01 | ) | $ | (0.06 | ) | $ | 0.02 | |||||
(Loss) income from continuing operations available to common stockholders per common share - diluted (Note 15) | $ | (0.05 | ) | $ | (0.01 | ) | $ | (0.06 | ) | $ | 0.02 | |||||
Net income (loss) available to common stockholders per share - basic (Note 15) | $ | 0.17 | $ | (0.01 | ) | $ | 0.18 | $ | 0.04 | |||||||
Net income (loss) available to common stockholders per share - diluted (Note 15) | $ | 0.17 | $ | (0.01 | ) | $ | 0.18 | $ | 0.04 | |||||||
Weighted average common shares outstanding - basic (Note 15) | 58,355,127 | 52,274,316 | 56,136,477 | 48,561,614 | ||||||||||||
Weighted average common shares outstanding - diluted (Note 15) | 58,355,127 | 52,274,316 | 56,136,477 | 48,565,028 | ||||||||||||
Dividends declared per common share | $ | 0.35 | $ | 0.35 | $ | 1.05 | $ | 1.05 |
Common Stock | Total Stock- holders' Equity | Noncontrol- ling Interests - Common Units of the Operating Partnership | Total Equity | |||||||||||||||||||||||||||
Preferred Stock | Number of Shares | Common Stock | Additional Paid-in Capital | Distributions in Excess of Earnings | ||||||||||||||||||||||||||
BALANCE AS OF DECEMBER 31, 2009 | $ | 121,582 | 43,148,762 | $ | 431 | $ | 913,657 | $ | (180,722 | ) | $ | 854,948 | $ | 28,890 | $ | 883,838 | ||||||||||||||
Net income | 14,374 | 14,374 | 128 | 14,502 | ||||||||||||||||||||||||||
Issuance of common stock | 9,200,000 | 92 | 299,755 | 299,847 | 299,847 | |||||||||||||||||||||||||
Issuance of share-based compensation awards | 3,239 | 1,904 | 1,904 | 1,904 | ||||||||||||||||||||||||||
Noncash amortization of share-based compensation | 5,050 | 5,050 | 5,050 | |||||||||||||||||||||||||||
Exercise of stock options | 4,000 | 83 | 83 | 83 | ||||||||||||||||||||||||||
Repurchase of common stock and restricted stock units | (59,782 | ) | (2,121 | ) | (2,121 | ) | (2,121 | ) | ||||||||||||||||||||||
Settlement of restricted stock units for shares of common stock | 53,451 | (1,296 | ) | (1,296 | ) | (1,296 | ) | |||||||||||||||||||||||
Allocation to the equity component of cash paid upon repurchase of 3.25% Exchangeable Notes | (2,694 | ) | (2,694 | ) | (2,694 | ) | ||||||||||||||||||||||||
Adjustment for noncontrolling interest | (4,665 | ) | (4,665 | ) | 4,665 | — | ||||||||||||||||||||||||
Preferred distributions and dividends | (11,397 | ) | (11,397 | ) | (11,397 | ) | ||||||||||||||||||||||||
Dividends declared per common share and common unit ($1.05 per share/unit) | (52,470 | ) | (52,470 | ) | (1,810 | ) | (54,280 | ) | ||||||||||||||||||||||
BALANCE AS OF SEPTEMBER 30, 2010 | $ | 121,582 | 52,349,670 | $ | 523 | $ | 1,209,673 | $ | (230,215 | ) | $ | 1,101,563 | $ | 31,873 | $ | 1,133,436 | ||||||||||||||
Common Stock | Total Stock- holders' Equity | Noncontrol- ling Interests - Common Units of the Operating Partnership | Total Equity | |||||||||||||||||||||||||||
Preferred Stock | Number of Shares | Common Stock | Additional Paid-in Capital | Distributions in Excess of Earnings | ||||||||||||||||||||||||||
BALANCE AS OF DECEMBER 31, 2010 | $ | 121,582 | 52,349,670 | $ | 523 | $ | 1,211,498 | $ | (247,252 | ) | $ | 1,086,351 | $ | 31,379 | $ | 1,117,730 | ||||||||||||||
Net income | 22,309 | 22,309 | 320 | 22,629 | ||||||||||||||||||||||||||
Issuance of common stock (Note 7) | 6,037,500 | 61 | 220,954 | 221,015 | 221,015 | |||||||||||||||||||||||||
Issuance of share-based compensation awards (Note 9) | 68,727 | 1 | 2,446 | 2,447 | 2,447 | |||||||||||||||||||||||||
Noncash amortization of share-based compensation | 4,201 | 4,201 | 4,201 | |||||||||||||||||||||||||||
Exercise of stock options | 15,000 | 395 | 395 | 395 | ||||||||||||||||||||||||||
Repurchase of common stock and restricted stock units (Note 9) | (11,485 | ) | (736 | ) | (736 | ) | (736 | ) | ||||||||||||||||||||||
Exchange of common units of the Operating Partnership | 5,000 | 91 | 91 | (91 | ) | — | ||||||||||||||||||||||||
Adjustment for noncontrolling interest | (3,269 | ) | (3,269 | ) | 3,269 | — | ||||||||||||||||||||||||
Preferred distributions and dividends | (11,397 | ) | (11,397 | ) | (11,397 | ) | ||||||||||||||||||||||||
Dividends declared per common share and common unit ($1.05 per share/unit) | (60,136 | ) | (60,136 | ) | (1,805 | ) | (61,941 | ) | ||||||||||||||||||||||
BALANCE AS OF SEPTEMBER 30, 2011 | $ | 121,582 | 58,464,412 | $ | 585 | $ | 1,435,580 | $ | (296,476 | ) | $ | 1,261,271 | $ | 33,072 | $ | 1,294,343 |
Nine Months Ended September 30, | |||||||
2011 | 2010 | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
Net income | $ | 22,629 | $ | 14,502 | |||
Adjustments to reconcile net income to net cash provided by operating activities (including discontinued operations): | |||||||
Depreciation and amortization of building and improvements and leasing costs | 96,971 | 74,049 | |||||
Increase (decrease) in provision for bad debts | 141 | (843 | ) | ||||
Depreciation of furniture, fixtures and equipment | 839 | 665 | |||||
Noncash amortization of share-based compensation awards | 3,365 | 5,328 | |||||
Noncash amortization of deferred financing costs and debt discounts and premiums | 10,164 | 9,098 | |||||
Noncash amortization of net above market rents (Note 3) | 1,519 | 696 | |||||
Net gain on dispositions of discontinued operations (Note 14) | (12,555 | ) | — | ||||
Loss on early extinguishment of debt | — | 4,564 | |||||
Noncash amortization of deferred revenue related to tenant-funded tenant improvements | (7,005 | ) | (7,108 | ) | |||
Other | (630 | ) | — | ||||
Changes in operating assets and liabilities: | |||||||
Marketable securities | (311 | ) | (1,029 | ) | |||
Current receivables | (1,022 | ) | (706 | ) | |||
Deferred rent receivables | (15,543 | ) | (8,441 | ) | |||
Other deferred leasing costs | 535 | (2,516 | ) | ||||
Prepaid expenses and other assets | (3,528 | ) | (2,765 | ) | |||
Accounts payable, accrued expenses and other liabilities | 18,914 | 3,049 | |||||
Deferred revenue | (598 | ) | 5,546 | ||||
Rents received in advance and tenant security deposits | 180 | 839 | |||||
Net cash provided by operating activities | 114,065 | 94,928 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
Expenditures for acquisition of operating properties (Note 2) | (481,756 | ) | (373,574 | ) | |||
Expenditures for operating properties | (41,087 | ) | (56,393 | ) | |||
Expenditures for development and redevelopment properties and undeveloped land | (18,682 | ) | (14,681 | ) | |||
Net increase in escrow deposits | (11,000 | ) | (2,002 | ) | |||
(Increase) decrease in restricted cash | (690 | ) | 1,316 | ||||
Receipt of principal payments on note receivable | — | 10,679 | |||||
Net cash used in investing activities | (553,215 | ) | (434,655 | ) | |||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
Net proceeds from issuance of common stock (Note 7) | 221,015 | 299,847 | |||||
Borrowings on unsecured line of credit | 302,000 | 553,000 | |||||
Repayments on unsecured line of credit | (461,000 | ) | (445,000 | ) | |||
Principal payments on secured debt | (5,295 | ) | (101,653 | ) | |||
Repurchase of exchangeable senior notes | — | (151,097 | ) | ||||
Proceeds from issuance of secured debt (Note 5) | 135,000 | 71,000 | |||||
Proceeds from issuance of unsecured debt (Note 5) | 324,476 | 247,870 | |||||
Repayments of unsecured debt | — | (61,000 | ) | ||||
Financing costs | (8,584 | ) | (11,200 | ) | |||
Decrease in loan deposits and other | 2,859 | 1,420 | |||||
Repurchase of common stock and restricted stock units | (736 | ) | (3,417 | ) | |||
Proceeds from exercise of stock options | 395 | 83 | |||||
Dividends and distributions paid to common stockholders and common unitholders | (58,942 | ) | (50,299 | ) | |||
Dividends and distributions paid to preferred stockholders and preferred unitholders | (11,397 | ) | (11,397 | ) | |||
Net cash provided by financing activities | 439,791 | 338,157 | |||||
Net increase (decrease) in cash and cash equivalents | 641 | (1,570 | ) | ||||
Cash and cash equivalents, beginning of period | 14,840 | 9,883 | |||||
Cash and cash equivalents, end of period | $ | 15,481 | $ | 8,313 |
Nine Months Ended September 30, | |||||||
2011 | 2010 | ||||||
SUPPLEMENTAL CASH FLOWS INFORMATION: | |||||||
Cash paid for interest, net of capitalized interest of $5,361 and $6,140 as of September 30, 2011 and 2010, respectively | $ | 42,070 | $ | 26,182 | |||
NONCASH INVESTING TRANSACTIONS: | |||||||
Accrual for expenditures for operating properties and development and redevelopment properties | $ | 13,506 | $ | 13,614 | |||
Tenant improvements funded directly by tenants to third parties | $ | 3,037 | $ | 2,520 | |||
Assumption of secured debt with property acquisition (Notes 2 and 5) | $ | 30,042 | $ | 51,079 | |||
Assumption of other liabilities with property acquisitions (Note 2) | $ | 4,515 | $ | 6,369 | |||
Net proceeds from disposition held by a qualified intermediary in connection with Section 1031 exchange (Note 14) | $ | 23,285 | $ | — | |||
NONCASH FINANCING TRANSACTIONS: | |||||||
Accrual of dividends and distributions payable to common stockholders and common unitholders | $ | 21,064 | $ | 18,925 | |||
Accrual of dividends and distributions payable to preferred stockholders and preferred unitholders | $ | 1,909 | $ | 1,909 | |||
Issuance of share-based compensation awards (Note 9) | $ | 7,505 | $ | 5,418 | |||
Exchange of common units of the Operating Partnership into shares of the Company's common stock | $ | 91 | $ | — |
September 30, 2011 | December 31, 2010 | ||||||
(unaudited) | |||||||
ASSETS | |||||||
REAL ESTATE ASSETS: | |||||||
Land and improvements (Note 2) | $ | 537,973 | $ | 491,333 | |||
Buildings and improvements (Note 2) | 2,881,504 | 2,435,173 | |||||
Undeveloped land and construction in progress (Note 1) | 328,785 | 290,365 | |||||
Total real estate held for investment | 3,748,262 | 3,216,871 | |||||
Accumulated depreciation and amortization | (732,162 | ) | (672,429 | ) | |||
Total real estate assets, net | 3,016,100 | 2,544,442 | |||||
CASH AND CASH EQUIVALENTS | 15,481 | 14,840 | |||||
RESTRICTED CASH (Note 14) | 25,436 | 1,461 | |||||
MARKETABLE SECURITIES (Note 12) | 5,213 | 4,902 | |||||
CURRENT RECEIVABLES, NET (Note 4) | 6,860 | 6,258 | |||||
DEFERRED RENT RECEIVABLES, NET (Note 4) | 103,668 | 89,052 | |||||
DEFERRED LEASING COSTS AND ACQUISITION-RELATED INTANGIBLE ASSETS, NET (Notes 2 and 3) | 155,757 | 131,066 | |||||
DEFERRED FINANCING COSTS, NET (Note 5) | 19,638 | 16,447 | |||||
PREPAID EXPENSES AND OTHER ASSETS, NET (Note 11) | 19,531 | 8,097 | |||||
TOTAL ASSETS | $ | 3,367,684 | $ | 2,816,565 | |||
LIABILITIES, NONCONTROLLING INTEREST AND CAPITAL | |||||||
LIABILITIES: | |||||||
Secured debt, net (Notes 5 and 12) | $ | 473,997 | $ | 313,009 | |||
Exchangeable senior notes, net (Notes 5 and 12) | 305,115 | 299,964 | |||||
Unsecured senior notes, net (Notes 5 and 12) | 980,487 | 655,803 | |||||
Unsecured line of credit (Notes 5 and 12) | — | 159,000 | |||||
Accounts payable, accrued expenses and other liabilities | 93,050 | 68,525 | |||||
Accrued distributions (Note 16) | 22,565 | 20,385 | |||||
Deferred revenue and acquisition-related intangible liabilities, net (Note 3) | 95,120 | 79,322 | |||||
Rents received in advance and tenant security deposits | 29,369 | 29,189 | |||||
Total liabilities | 1,999,703 | 1,625,197 | |||||
COMMITMENTS AND CONTINGENCIES (Note 11) | |||||||
7.45% SERIES A CUMULATIVE REDEEMABLE PREFERRED UNITS | 73,638 | 73,638 | |||||
CAPITAL: | |||||||
Partners' Capital (Note 8): | |||||||
7.80% Series E Cumulative Redeemable Preferred units, 1,610,000 units issued and outstanding ($40,250 liquidation preference) | 38,425 | 38,425 | |||||
7.50% Series F Cumulative Redeemable Preferred units, 3,450,000 units issued and outstanding ($86,250 liquidation preference) | 83,157 | 83,157 | |||||
Common units, 58,464,412 and 52,349,670 held by the general partner and 1,718,131 and 1,723,131 held by common limited partners issued and outstanding, respectively | 1,171,049 | 994,511 | |||||
Total partners' capital | 1,292,631 | 1,116,093 | |||||
Noncontrolling interest in consolidated subsidiaries | 1,712 | 1,637 | |||||
Total capital | 1,294,343 | 1,117,730 | |||||
TOTAL LIABILITIES, NONCONTROLLING INTEREST AND CAPITAL | $ | 3,367,684 | $ | 2,816,565 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
REVENUES: | ||||||||||||||||
Rental income | $ | 89,306 | 72,135 | $ | 252,102 | $ | 196,883 | |||||||||
Tenant reimbursements | 7,683 | 6,156 | 21,469 | 18,261 | ||||||||||||
Other property income | 348 | 985 | 2,863 | 2,325 | ||||||||||||
Total revenues | 97,337 | 79,276 | 276,434 | 217,469 | ||||||||||||
EXPENSES: | ||||||||||||||||
Property expenses | 19,361 | 15,802 | 54,548 | 42,255 | ||||||||||||
Real estate taxes | 8,360 | 7,582 | 24,878 | 20,035 | ||||||||||||
Provision for bad debts | (5 | ) | (857 | ) | 141 | (843 | ) | |||||||||
Ground leases (Note 11) | 503 | 336 | 1,266 | 648 | ||||||||||||
General and administrative expenses | 6,355 | 7,273 | 20,355 | 21,096 | ||||||||||||
Acquisition-related expenses | 1,163 | 354 | 2,829 | 1,624 | ||||||||||||
Depreciation and amortization | 36,152 | 29,951 | 97,513 | 74,405 | ||||||||||||
Total expenses | 71,889 | 60,441 | 201,530 | 159,220 | ||||||||||||
OTHER (EXPENSES) INCOME: | ||||||||||||||||
Interest income and other net investment gains (Note 12) | 30 | 337 | 272 | 703 | ||||||||||||
Interest expense (Note 5) | (24,051 | ) | (15,853 | ) | (66,155 | ) | (40,897 | ) | ||||||||
Loss on early extinguishment of debt | — | — | — | (4,564 | ) | |||||||||||
Total other (expenses) income | (24,021 | ) | (15,516 | ) | (65,883 | ) | (44,758 | ) | ||||||||
INCOME FROM CONTINUING OPERATIONS | 1,427 | 3,319 | 9,021 | 13,491 | ||||||||||||
DISCONTINUED OPERATIONS (Note 14) | ||||||||||||||||
Net income from discontinued operations | 308 | 350 | 1,053 | 1,011 | ||||||||||||
Net gain on dispositions of discontinued operations | 12,555 | — | 12,555 | — | ||||||||||||
Total income from discontinued operations | 12,863 | 350 | 13,608 | 1,011 | ||||||||||||
NET INCOME | 14,290 | 3,669 | 22,629 | 14,502 | ||||||||||||
Net income attributable to noncontrolling interests in consolidated subsidiaries | (30 | ) | (41 | ) | (95 | ) | (138 | ) | ||||||||
NET INCOME ATTRIBUTABLE TO KILROY REALTY, L.P. | 14,260 | 3,628 | 22,534 | 14,364 | ||||||||||||
PREFERRED DISTRIBUTIONS | (3,799 | ) | (3,799 | ) | (11,397 | ) | (11,397 | ) | ||||||||
NET INCOME (LOSS) AVAILABLE TO COMMON UNITHOLDERS | $ | 10,461 | $ | (171 | ) | $ | 11,137 | $ | 2,967 | |||||||
(Loss) income from continuing operations available to common unitholders per common unit - basic (Note 16) | $ | (0.05 | ) | $ | (0.01 | ) | $ | (0.06 | ) | $ | 0.02 | |||||
(Loss) income from continuing operations available to common unitholders per common unit - diluted (Note 16) | $ | (0.05 | ) | $ | (0.01 | ) | $ | (0.06 | ) | $ | 0.02 | |||||
Net income (loss) available to common unitholders per unit - basic (Note 16) | $ | 0.17 | $ | (0.01 | ) | $ | 0.18 | $ | 0.04 | |||||||
Net income (loss) available to common unitholders per unit - diluted (Note 16) | $ | 0.17 | $ | (0.01 | ) | $ | 0.18 | $ | 0.04 | |||||||
Weighted average common units outstanding - basic (Note 16) | 60,073,258 | 53,997,447 | 57,857,538 | 50,284,745 | ||||||||||||
Weighted average common units outstanding - diluted (Note 16) | 60,073,258 | 53,997,447 | 57,857,538 | 50,288,159 | ||||||||||||
Distributions declared per common unit | $ | 0.35 | $ | 0.35 | $ | 1.05 | $ | 1.05 |
Partners' Capital | Total Partners' Capital | Noncontrolling Interests in Consolidated Subsidiaries | ||||||||||||||||||||
Preferred Units | Number of Common Units | Common Units | Total Capital | |||||||||||||||||||
BALANCE AS OF DECEMBER 31, 2009 | $ | 121,582 | 44,871,893 | $ | 760,756 | $ | 882,338 | $ | 1,500 | $ | 883,838 | |||||||||||
Net income | 14,364 | 14,364 | 138 | 14,502 | ||||||||||||||||||
Issuance of common units | 9,200,000 | 299,847 | 299,847 | 299,847 | ||||||||||||||||||
Issuance of share-based compensation awards | 3,239 | 1,904 | 1,904 | 1,904 | ||||||||||||||||||
Noncash amortization of share-based compensation | 5,050 | 5,050 | 5,050 | |||||||||||||||||||
Exercise of stock options | 4,000 | 83 | 83 | 83 | ||||||||||||||||||
Repurchase of common units and restricted stock units | (59,782 | ) | (2,121 | ) | (2,121 | ) | (2,121 | ) | ||||||||||||||
Settlement of restricted stock units for shares of common stock | 53,451 | (1,296 | ) | (1,296 | ) | (1,296 | ) | |||||||||||||||
Allocation to the equity component of cash paid upon repurchase of 3.25% Exchangeable Notes | (2,694 | ) | (2,694 | ) | (2,694 | ) | ||||||||||||||||
Other | 26 | 26 | (26 | ) | — | |||||||||||||||||
Preferred distributions | (11,397 | ) | (11,397 | ) | (11,397 | ) | ||||||||||||||||
Distributions declared per common unit ($1.05 per unit) | (54,280 | ) | (54,280 | ) | (54,280 | ) | ||||||||||||||||
BALANCE AS OF SEPTEMBER 30, 2010 | $ | 121,582 | 54,072,801 | $ | 1,010,242 | $ | 1,131,824 | $ | 1,612 | $ | 1,133,436 | |||||||||||
Partners' Capital | Total Partners' Capital | Noncontrolling Interests in Consolidated Subsidiaries | ||||||||||||||||||||
Preferred Units | Number of Common Units | Common Units | Total Capital | |||||||||||||||||||
BALANCE AS OF DECEMBER 31, 2010 | $ | 121,582 | 54,072,801 | $ | 994,511 | $ | 1,116,093 | $ | 1,637 | $ | 1,117,730 | |||||||||||
Net income | 22,534 | 22,534 | 95 | 22,629 | ||||||||||||||||||
Issuance of common units (Note 8) | 6,037,500 | 221,015 | 221,015 | 221,015 | ||||||||||||||||||
Issuance of share-based compensation awards (Note 9) | 68,727 | 2,447 | 2,447 | 2,447 | ||||||||||||||||||
Noncash amortization of share-based compensation | 4,201 | 4,201 | 4,201 | |||||||||||||||||||
Exercise of stock options | 15,000 | 395 | 395 | 395 | ||||||||||||||||||
Repurchase of common units and restricted stock units (Note 9) | (11,485 | ) | (736 | ) | (736 | ) | (736 | ) | ||||||||||||||
Other | 20 | 20 | (20 | ) | — | |||||||||||||||||
Preferred distributions | (11,397 | ) | (11,397 | ) | (11,397 | ) | ||||||||||||||||
Distributions declared per common unit ($1.05 per unit) | (61,941 | ) | (61,941 | ) | (61,941 | ) | ||||||||||||||||
BALANCE AS OF SEPTEMBER 30, 2011 | $ | 121,582 | 60,182,543 | $ | 1,171,049 | $ | 1,292,631 | $ | 1,712 | $ | 1,294,343 |
Nine Months Ended September 30, | |||||||
2011 | 2010 | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
Net income | $ | 22,629 | $ | 14,502 | |||
Adjustments to reconcile net income to net cash provided by operating activities (including discontinued operations): | |||||||
Depreciation and amortization of building and improvements and leasing costs | 96,971 | 74,049 | |||||
Increase (decrease) in provision for bad debts | 141 | (843 | ) | ||||
Depreciation of furniture, fixtures and equipment | 839 | 665 | |||||
Noncash amortization of share-based compensation awards | 3,365 | 5,328 | |||||
Noncash amortization of deferred financing costs and debt discounts and premiums | 10,164 | 9,098 | |||||
Noncash amortization of net above market rents (Note 3) | 1,519 | 696 | |||||
Net gain on dispositions of discontinued operations (Note 14) | (12,555 | ) | — | ||||
Loss on early extinguishment of debt | — | 4,564 | |||||
Noncash amortization of deferred revenue related to tenant-funded tenant improvements | (7,005 | ) | (7,108 | ) | |||
Other | (630 | ) | — | ||||
Changes in operating assets and liabilities: | |||||||
Marketable securities | (311 | ) | (1,029 | ) | |||
Current receivables | (1,022 | ) | (706 | ) | |||
Deferred rent receivables | (15,543 | ) | (8,441 | ) | |||
Other deferred leasing costs | 535 | (2,516 | ) | ||||
Prepaid expenses and other assets | (3,528 | ) | (2,765 | ) | |||
Accounts payable, accrued expenses and other liabilities | 18,914 | 3,049 | |||||
Deferred revenue | (598 | ) | 5,546 | ||||
Rents received in advance and tenant security deposits | 180 | 839 | |||||
Net cash provided by operating activities | 114,065 | 94,928 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
Expenditures for acquisition of operating properties (Note 2) | (481,756 | ) | (373,574 | ) | |||
Expenditures for operating properties | (41,087 | ) | (56,393 | ) | |||
Expenditures for development and redevelopment properties and undeveloped land | (18,682 | ) | (14,681 | ) | |||
Net increase in escrow deposits | (11,000 | ) | (2,002 | ) | |||
(Increase) decrease in restricted cash | (690 | ) | 1,316 | ||||
Receipt of principal payments on note receivable | — | 10,679 | |||||
Net cash used in investing activities | (553,215 | ) | (434,655 | ) | |||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
Net proceeds from issuance of common units (Note 8) | 221,015 | 299,847 | |||||
Borrowings on unsecured line of credit | 302,000 | 553,000 | |||||
Repayments on unsecured line of credit | (461,000 | ) | (445,000 | ) | |||
Principal payments on secured debt | (5,295 | ) | (101,653 | ) | |||
Repurchase of exchangeable senior notes | — | (151,097 | ) | ||||
Proceeds from issuance of secured debt (Note 5) | 135,000 | 71,000 | |||||
Proceeds from issuance of unsecured debt (Note 5) | 324,476 | 247,870 | |||||
Repayments of unsecured debt | — | (61,000 | ) | ||||
Financing costs | (8,584 | ) | (11,200 | ) | |||
Decrease in loan deposits and other | 2,859 | 1,420 | |||||
Repurchase of common units and restricted stock units | (736 | ) | (3,417 | ) | |||
Proceeds from exercise of stock options | 395 | 83 | |||||
Distributions paid to common unitholders | (58,942 | ) | (50,299 | ) | |||
Distributions paid to preferred unitholders | (11,397 | ) | (11,397 | ) | |||
Net cash provided by financing activities | 439,791 | 338,157 | |||||
Net increase (decrease) in cash and cash equivalents | 641 | (1,570 | ) | ||||
Cash and cash equivalents, beginning of period | 14,840 | 9,883 | |||||
Cash and cash equivalents, end of period | $ | 15,481 | $ | 8,313 |
Nine Months Ended September 30, | |||||||
2011 | 2010 | ||||||
SUPPLEMENTAL CASH FLOWS INFORMATION: | |||||||
Cash paid for interest, net of capitalized interest of $5,361 and $6,140 as of September 30, 2011 and 2010, respectively | $ | 42,070 | $ | 26,182 | |||
NONCASH INVESTING TRANSACTIONS: | |||||||
Accrual for expenditures for operating properties and development and redevelopment properties | $ | 13,506 | $ | 13,614 | |||
Tenant improvements funded directly by tenants to third parties | $ | 3,037 | $ | 2,520 | |||
Assumption of secured debt with property acquisitions (Notes 2 and 5) | $ | 30,042 | $ | 51,079 | |||
Assumption of other liabilities with property acquisitions (Note 2) | $ | 4,515 | $ | 6,369 | |||
Net proceeds from disposition held by a qualified intermediary in connection with Section 1031 exchange (Note 14) | $ | 23,285 | $ | — | |||
NONCASH FINANCING TRANSACTIONS: | |||||||
Accrual of distributions payable to common unitholders | $ | 21,064 | 18,925 | ||||
Accrual of distributions payable to preferred unitholders | $ | 1,909 | $ | 1,909 | |||
Issuance of share-based compensation awards (Note 9) | $ | 7,505 | $ | 5,418 |
Number of Buildings | Rentable Square Feet | Number of Tenants | Percentage Occupied | ||||||||
Office Properties(1) | 105 | 11,574,244 | 422 | 90.6 | % | ||||||
Industrial Properties | 40 | 3,605,407 | 64 | 100.0 | % | ||||||
Total Stabilized Portfolio | 145 | 15,179,651 | 486 | 92.8 | % |
Property | Property Type | Date of Acquisition | Number of Buildings | Rentable Square Feet | Percentage Occupied as of September 30, 2011 | Purchase Price (in millions)(1) | |||||||||
250 Brannan Street | Office | January 28, 2011 | |||||||||||||
San Francisco, CA | 1 | 92,948 | 100.0% | $ | 33.0 | ||||||||||
10210, 10220, and 10230 NE Points Drive; 3933 Lake Washington Boulevard NE | Office | April 21, 2011 | |||||||||||||
Kirkland, WA(2) | 4 | 279,924 | 89.6% | 100.1 | |||||||||||
10770 Wateridge Circle | Office | May 12, 2011 | |||||||||||||
San Diego, CA | 1 | 174,310 | 97.5% | 32.7 | |||||||||||
601 108th Avenue N.E. | Office | June 3, 2011 | |||||||||||||
Bellevue, WA | 1 | 488,470 | 88.1% | 215.0 | |||||||||||
4040 Civic Center Drive | Office | June 9, 2011 | |||||||||||||
San Rafael, CA | 1 | 126,787 | 93.1% | 32.2 | |||||||||||
201 Third Street | Office | September 15, 2011 | |||||||||||||
San Francisco, CA (3) | 1 | 311,545 | 90.3% | 103.3 | |||||||||||
Total | 9 | 1,473,984 | $ | 516.3 |
(3) | As of September 30, 2011, this property was temporarily being held in a separate VIE to facilitate a potential Section 1031 Exchange (see Note 1). |
601 108th Avenue N.E., Bellevue, WA(1) | 201 Third Street San Francisco, CA (1) | All Other Acquisitions(2) | Total | ||||||||||||
Assets | |||||||||||||||
Land(3) | $ | — | $ | 19,260 | $ | 36,740 | $ | 56,000 | |||||||
Buildings and improvements(4) | 214,095 | 84,018 | 143,545 | 441,658 | |||||||||||
Undeveloped land | — | — | 2,560 | 2,560 | |||||||||||
Deferred leasing costs and acquisition-related intangible assets(5) | 13,790 | 8,700 | 17,500 | 39,990 | |||||||||||
Total assets acquired | 227,885 | 111,978 | 200,345 | 540,208 | |||||||||||
Liabilities | |||||||||||||||
Deferred revenue and acquisition-related intangible liabilities(6) | 12,850 | 8,700 | 1,390 | 22,940 | |||||||||||
Secured debt(7) | — | — | 30,997 | 30,997 | |||||||||||
Accounts payable, accrued expenses and other liabilities | 2,380 | 76 | 2,059 | 4,515 | |||||||||||
Total liabilities assumed | 15,230 | 8,776 | 34,446 | 58,452 | |||||||||||
Net assets and liabilities acquired(8) | $ | 212,655 | $ | 103,202 | $ | 165,899 | $ | 481,756 | |||||||
(1) | The purchase of 601 108th Avenue N.E., Bellevue, WA, and 201 Third Street, San Francisco, CA, represent the two largest acquisitions and 61.7% of the total aggregate purchase price of the properties acquired during the nine months ended September 30, 2011. |
(2) | The purchase price of all other acquisitions completed during the nine months ended September 30, 2011 were individually less than 5% and in the aggregate less than 10% of the Company's total assets as of December 31, 2010. |
(3) | In connection with the acquisition of 601 108th Avenue N.E., Bellevue, WA, we assumed the lessee's obligations under a noncancellable ground lease that is scheduled to expire in November 2093 (see Notes 3 and 11). |
(4) | Represents buildings, building improvements and tenant improvements. |
(5) | Represents in-place leases (approximately $25.2 million with a weighted average amortization period of 3.9 years), above-market leases (approximately $6.8 million with a weighted average amortization period of 4.5 years), and leasing commissions (approximately $7.9 million with a weighted average amortization period of 2.6 years). |
(6) | Represents below-market leases (approximately $17.7 million with a weighted average amortization period of 3.8 years) and an above-market ground lease obligation (approximately $5.2 million with a weighted average amortization period of 82.5 years), under which we are the lessee. |
(7) | Represents the mortgage loan, which includes an unamortized premium recorded at the date of acquisition of approximately $1.0 million in connection with recording this debt at fair value, assumed in connection with the properties acquired in April 2011 (see Note 5). |
(8) | Reflects the purchase price net of assumed secured debt and other lease-related obligations. |
September 30, 2011 | December 31, 2010 | ||||||
(in thousands) | |||||||
Deferred Leasing Costs and Acquisition-related Intangible Assets, net(1): | |||||||
Deferred leasing costs | $ | 136,374 | $ | 128,980 | |||
Accumulated amortization | (48,290 | ) | (45,869 | ) | |||
Deferred leasing costs, net | 88,084 | 83,111 | |||||
Above-market leases | 28,143 | 21,321 | |||||
Accumulated amortization | (6,250 | ) | (2,163 | ) | |||
Above-market leases, net | 21,893 | 19,158 | |||||
In-place leases | 57,195 | 36,964 | |||||
Accumulated amortization | (11,415 | ) | (8,167 | ) | |||
In-place leases, net | 45,780 | 28,797 | |||||
Total deferred leasing costs and acquisition-related intangible assets, net | $ | 155,757 | $ | 131,066 | |||
Acquisition-related Intangible Liabilities, net(1)(2): | |||||||
Below-market leases | $ | 35,852 | $ | 21,938 | |||
Accumulated amortization | (3,844 | ) | (5,094 | ) | |||
Below-market leases, net | 32,008 | 16,844 | |||||
Above-market ground lease obligation | 5,200 | — | |||||
Accumulated amortization | (21 | ) | — | ||||
Above-market ground lease obligation, net | 5,179 | — | |||||
Total acquisition-related intangible liabilities, net | $ | 37,187 | $ | 16,844 |
(1) | Balances and accumulated amortization amounts at September 30, 2011 reflect the write-off of the following fully amortized amounts at January 1, 2011: deferred leasing costs (approximately $10.4 million), in-place leases (approximately $5.0 million), and below-market leases (approximately $3.8 million). Our accounting policy is to write-off the asset and corresponding accumulated amortization for fully amortized balances on January 1st of each fiscal year. |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(in thousands) | (in thousands) | |||||||||||||||
Deferred leasing costs(1) | $ | 4,317 | $ | 3,886 | $ | 12,053 | $ | 9,559 | ||||||||
Net above-market leases(2) | 121 | 664 | 1,519 | 696 | ||||||||||||
In-place leases(1) | 3,379 | 1,220 | 8,238 | 1,505 | ||||||||||||
Above-market ground lease obligation(3) | 16 | — | 21 | — | ||||||||||||
Total | $ | 7,833 | $ | 5,770 | $ | 21,831 | $ | 11,760 |
Year Ending | Deferred Leasing Costs | Net Above-/(Below)-Market Leases(1) | In-Place Leases | Above-Market Ground Lease Obligation | |||||||||||
(in thousands) | |||||||||||||||
Remaining 2011 | $ | 4,748 | $ | (78 | ) | $ | 3,643 | $ | 16 | ||||||
2012 | 17,689 | (1,534 | ) | 12,863 | 63 | ||||||||||
2013 | 15,823 | (1,690 | ) | 10,578 | 63 | ||||||||||
2014 | 13,796 | (1,339 | ) | 7,830 | 63 | ||||||||||
2015 | 10,387 | (790 | ) | 4,366 | 63 | ||||||||||
Thereafter | 25,641 | (4,684 | ) | 6,500 | 4,911 | ||||||||||
Total | $ | 88,084 | $ | (10,115 | ) | $ | 45,780 | $ | 5,179 |
(1) | Represents estimated annual net amortization related to above-/(below)-market leases. Amounts shown represent net below-market leases which will be recorded as an increase to rental income in the consolidated statements of operations. |
September 30, 2011 | December 31, 2010 | ||||||
(in thousands) | |||||||
Current receivables | $ | 10,001 | $ | 9,077 | |||
Allowance for uncollectible tenant receivables | (3,141 | ) | (2,819 | ) | |||
Current receivables, net | $ | 6,860 | $ | 6,258 |
September 30, 2011 | December 31, 2010 | ||||||
(in thousands) | |||||||
Deferred rent receivables | $ | 107,130 | $ | 92,883 | |||
Allowance for deferred rent receivables | (3,462 | ) | (3,831 | ) | |||
Deferred rent receivables, net | $ | 103,668 | $ | 89,052 |
3.25% Exchangeable Notes | 4.25% Exchangeable Notes | ||||||||||||||
September 30, 2011 | December 31, 2010 | September 30, 2011 | December 31, 2010 | ||||||||||||
(in thousands) | |||||||||||||||
Principal amount | $ | 148,000 | $ | 148,000 | $ | 172,500 | $ | 172,500 | |||||||
Unamortized discount | (1,714 | ) | (4,004 | ) | (13,671 | ) | (16,532 | ) | |||||||
Net carrying amount of liability component | $ | 146,286 | $ | 143,996 | $ | 158,829 | $ | 155,968 | |||||||
Carrying amount of equity component | $33,675 | $19,835 | |||||||||||||
Maturity date | April 2012 | November 2014 | |||||||||||||
Stated coupon rate (1)(2) | 3.25% | 4.25% | |||||||||||||
Effective interest rate (3) | 5.45% | 7.13% | |||||||||||||
Exchange rate per $1,000 principal value of the Exchangeable Notes, as adjusted (4) | 11.3636 | 27.8307 | |||||||||||||
Exchange price, as adjusted (4) | $88.00 | $35.93 | |||||||||||||
Number of shares on which the aggregate consideration to be delivered on conversion is determined (4) | 1,681,813 | 4,800,796 |
(1) | Interest on the 3.25% Exchangeable Notes is payable semi-annually in arrears on April 15th and October 15th of each year. |
(2) | Interest on the 4.25% Exchangeable Notes is payable semi-annually in arrears on May 15th and November 15th of each year. |
(3) | The rate at which we record interest expense for financial reporting purposes, which reflects the amortization of the discounts on the Exchangeable Notes. This rate |
(4) | The exchange rate, exchange price, and the number of shares to be delivered upon conversion are subject to adjustment under certain circumstances including increases in our |
3.25% Exchangeable Notes(1) | 4.25% Exchangeable Notes(2) | ||||||
Referenced shares of common stock | 1,121,201 | 4,800,796 | |||||
Exchange price including effect of capped calls | $ | 102.72 | $ | 42.81 |
(1) | The capped calls mitigate the dilutive impact to us of the potential exchange of two-thirds of the 3.25% Exchangeable Notes into shares of common stock. |
(2) | The capped calls mitigate the dilutive impact to us of the potential exchange of all of the 4.25% Exchangeable Notes into shares of common stock. |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(in thousands) | ||||||||||||||||
Contractual interest payments | $ | 3,035 | $ | 3,035 | $ | 9,106 | $ | 11,530 | ||||||||
Amortization of discount | 1,742 | 1,818 | 5,151 | 6,497 | ||||||||||||
Interest expense attributable to the Exchangeable Notes | $ | 4,777 | $ | 4,853 | $ | 14,257 | $ | 18,027 |
September 30, 2011 | December 31, 2010 | ||||||
(in thousands) | |||||||
Outstanding borrowings(1) | $ | — | $ | 159,000 | |||
Remaining borrowing capacity | 500,000 | 341,000 | |||||
Total borrowing capacity(2) | $ | 500,000 | $ | 500,000 | |||
Interest rate(3) | 2.99 | % | |||||
Facility fee-annual rate(4) | 0.350 | % | 0.575 | % | |||
Maturity date(5) | August 2015 | August 2013 |
Year Ending | (in thousands) | |||
Remaining 2011 | $ | 70,371 | ||
2012 | 305,303 | |||
2013 | 6,373 | |||
2014 | 262,443 | |||
2015 | 357,382 | |||
Thereafter | 775,028 | |||
Total | $ | 1,776,900 | (1) |
(1) | Includes gross principal balance of outstanding debt before impact of all debt discounts and premiums. |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(in thousands) | ||||||||||||||||
Gross interest expense | $ | 26,449 | $ | 18,543 | $ | 72,597 | $ | 48,980 | ||||||||
Capitalized interest | (2,398 | ) | (2,690 | ) | (6,442 | ) | (8,083 | ) | ||||||||
Interest expense | $ | 24,051 | $ | 15,853 | $ | 66,155 | $ | 40,897 |
Nonvested Shares | Shares | Weighted-Average Grant Date Fair Value Per Share | ||||
Outstanding at January 1, 2011 | 50,032 | $ | 58.40 | |||
Granted | 68,727 | 37.83 | ||||
Vested (1) | (9,474 | ) | 56.76 | |||
Outstanding as of September 30, 2011 | 109,285 | $ | 45.61 |
(1) | The total shares vested include 2,198 shares that were tendered to satisfy minimum statutory tax withholding requirements related to the restricted shares that have vested in accordance with the terms of the 2006 Plan. We accept the return of shares at the current quoted closing share price of the Company's common stock to satisfy tax obligations. |
Shares Granted | Shares Vested | |||||||||||||
Nine Months Ended September 30, | Non-Vested Shares Issued | Weighted-Average Grant Date Fair Value Per Share | Vested Shares | Total Vest Date Fair Value (1) (in thousands) | ||||||||||
2011 | 68,727 | $ | 37.83 | (9,474 | ) | $ | 370 | |||||||
2010 | 3,239 | 30.88 | (16,358 | ) | 474 | |||||||||
Nonvested RSUs | Vested RSUs | Total RSUs | ||||||||||
Amount | Weighted-Average Grant Date Fair Value Per Share | |||||||||||
Outstanding at January 1, 2011 | 125,754 | $ | 29.88 | 588,068 | 713,822 | |||||||
Granted | 107,673 | 37.94 | — | 107,673 | ||||||||
Vested | (23,035 | ) | 30.57 | 23,035 | ||||||||
Issuance of dividend equivalents (1) | 20,790 | 20,790 | ||||||||||
Canceled (2) | (8,497 | ) | (8,497 | ) | ||||||||
Outstanding as of September 30, 2011 | 210,392 | $ | 33.93 | 623,396 | 833,788 |
(1) | RSUs issued as dividend equivalents are vested upon issuance. |
(2) | We accept the return of RSUs, at the current quoted closing share price of the Company's common stock, to satisfy minimum statutory tax-withholding requirements related to either RSUs that have vested or RSU dividend equivalents in accordance with the terms of the 2006 Plan. |
RSUs Granted | RSUs Vested | |||||||||||||
Nine Months Ended September 30, | Non-Vested RSUs Issued | Weighted-Average Grant Date Fair Value Per Share | Vested RSUs | Total Vest-Date Fair Value (1) (in thousands) | ||||||||||
2011 | 107,673 | $ | 37.94 | (23,035 | ) | $ | 897 | |||||||
2010 | 159,606 | 30.24 | (23,564 | ) | 740 | |||||||||
Year Ending | (in thousands) | |||||
Remaining 2011 | $ | 79,636 | ||||
2012 | 323,174 | |||||
2013 | 307,751 | |||||
2014 | 275,387 | |||||
2015 | 220,593 | |||||
Thereafter | 687,083 | |||||
Total | $ | 1,893,624 | ||||
Year Ending | (in thousands) | ||
Remaining 2011 | $ | 481 | |
2012 | 1,926 | ||
2013 | 1,926 | ||
2014 | 1,870 | ||
2015 | 1,830 | ||
Thereafter(1)(2) | 133,212 | ||
Total | $ | 141,245 | |
(1) | 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, 2011. |
(2) | 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 for that ground lease included above assumes the annual lease rental obligation in effect as of September 30, 2011. |
Fair Value (Level 1)(1) | |||||||
Description | September 30, 2011 | December 31, 2010 | |||||
(in thousands) | |||||||
Marketable securities (2) | $ | 5,213 | $ | 4,902 | |||
Deferred compensation plan liability (3) | $ | 5,118 | $ | 4,809 |
(1) | Based on quoted prices in active markets for identical securities. |
(2) | The marketable securities are held in a limited rabbi trust. |
(3) | The deferred compensation liability is reported on our consolidated balance sheets in accounts payable, accrued expenses, and other liabilities. |
Three Months Ended | Nine Months Ended | ||||||||||||||
Description | September 30, 2011 | September 30, 2010 | September 30, 2011 | September 30, 2010 | |||||||||||
(in thousands) | (in thousands) | ||||||||||||||
Net (loss) gain on marketable securities | $ | (642 | ) | $ | 311 | $ | (429 | ) | $ | 190 | |||||
Decrease (increase) to compensation cost | 642 | (364 | ) | 429 | (206 | ) |
Carrying Value | Fair Value | Carrying Value | Fair Value | ||||||||||||
Description | September 30, 2011 | December 31, 2010 | |||||||||||||
(in thousands) | |||||||||||||||
Liabilities | |||||||||||||||
Secured debt | $ | 473,997 | $ | 487,807 | $ | 313,009 | $ | 329,456 | |||||||
Exchangeable notes | 305,115 | 321,183 | 299,964 | 312,598 | |||||||||||
Unsecured senior notes | 980,487 | 1,014,863 | 655,803 | 661,644 | |||||||||||
Credit Facility (1) | — | — | 159,000 | 159,659 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(in thousands) | ||||||||||||||||
Reportable Segment - Office Properties | ||||||||||||||||
Operating revenues(1) | $ | 89,754 | $ | 71,646 | $ | 254,041 | $ | 194,923 | ||||||||
Property and related expenses | 26,709 | 21,091 | 74,199 | 56,678 | ||||||||||||
Net Operating Income | 63,045 | 50,555 | 179,842 | 138,245 | ||||||||||||
Non-Reportable Segment - Industrial Properties | ||||||||||||||||
Operating revenues(1) | 7,583 | 7,630 | 22,393 | 22,546 | ||||||||||||
Property and related expenses | 1,510 | 1,772 | 6,634 | 5,417 | ||||||||||||
Net Operating Income | 6,073 | 5,858 | 15,759 | 17,129 | ||||||||||||
Total Segments: | ||||||||||||||||
Operating revenues(1) | 97,337 | 79,276 | 276,434 | 217,469 | ||||||||||||
Property and related expenses | 28,219 | 22,863 | 80,833 | 62,095 | ||||||||||||
Net Operating Income | $ | 69,118 | $ | 56,413 | $ | 195,601 | $ | 155,374 | ||||||||
Reconciliation to Consolidated Net Income: | ||||||||||||||||
Total Net Operating Income for segments | $ | 69,118 | $ | 56,413 | $ | 195,601 | $ | 155,374 | ||||||||
Unallocated (expenses) income: | ||||||||||||||||
General and administrative expenses | (6,355 | ) | (7,273 | ) | (20,355 | ) | (21,096 | ) | ||||||||
Acquisition-related expenses | (1,163 | ) | (354 | ) | (2,829 | ) | (1,624 | ) | ||||||||
Depreciation and amortization | (36,152 | ) | (29,951 | ) | (97,513 | ) | (74,405 | ) | ||||||||
Interest income and other net investment gains | 30 | 337 | 272 | 703 | ||||||||||||
Interest expense | (24,051 | ) | (15,853 | ) | (66,155 | ) | (40,897 | ) | ||||||||
Loss on early extinguishment of debt | — | — | — | (4,564 | ) | |||||||||||
Income from continuing operations | 1,427 | 3,319 | 9,021 | 13,491 | ||||||||||||
Income from discontinued operations(2) | 12,863 | 350 | 13,608 | 1,011 | ||||||||||||
Net income | $ | 14,290 | $ | 3,669 | $ | 22,629 | $ | 14,502 |
(1) | All operating revenues are comprised of amounts received from third-party tenants. |
(2) | Income from discontinued operations is from our Reportable Segment - Office Properties. |
September 30, 2011 | December 31, 2010 | |||||||
(in thousands) | ||||||||
Assets: | ||||||||
Reportable Segment - Office Properties | ||||||||
Land, buildings, and improvements, net | $ | 2,541,029 | $ | 2,108,019 | ||||
Undeveloped land and construction in progress | 328,785 | 290,365 | ||||||
Total assets(1) | 3,121,084 | 2,611,206 | ||||||
Non-Reportable Segment - Industrial Properties | ||||||||
Land, buildings, and improvements, net | 146,286 | 146,058 | ||||||
Total assets(1) | 161,301 | 159,612 | ||||||
Total Segments | ||||||||
Land, buildings, and improvements, net | 2,687,315 | 2,254,077 | ||||||
Undeveloped land and construction in progress | 328,785 | 290,365 | ||||||
Total assets(1) | 3,282,385 | 2,770,818 | ||||||
Reconciliation to Consolidated Assets: | ||||||||
Total assets allocated to segments | $ | 3,282,385 | $ | 2,770,818 | ||||
Other unallocated assets: | ||||||||
Cash and cash equivalents | 15,481 | 14,840 | ||||||
Restricted cash | 25,436 | 1,461 | ||||||
Marketable securities | 5,213 | 4,902 | ||||||
Deferred financing costs, net | 19,638 | 16,447 | ||||||
Prepaid expenses and other assets, net | 19,531 | 8,097 | ||||||
Total consolidated assets | $ | 3,367,684 | $ | 2,816,565 | ||||
(1) | Includes land, buildings, and improvements, undeveloped land and construction in progress, current receivables, deferred rent receivables, deferred leasing costs, and acquisition-related intangible assets, all shown on a net basis. |
Location | Property Type | Month of Disposition | Number of Buildings | Rentable Square Feet | Sales Price (in millions) | ||||||||
10350 Barnes Canyon and 10120 Pacific Heights Drive, San Diego, CA | Office | September | 2 | 90,558 | $ | 23.9 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(in thousands) | ||||||||||||||||
Revenues: | ||||||||||||||||
Rental income | $ | 413 | $ | 473 | $ | 1,359 | $ | 1,419 | ||||||||
Tenant reimbursements | 56 | 55 | 202 | 151 | ||||||||||||
Total revenues | 469 | 528 | 1,561 | 1,570 | ||||||||||||
Expenses: | ||||||||||||||||
Property expenses | 33 | 43 | 118 | 153 | ||||||||||||
Real estate taxes | 29 | 32 | 93 | 97 | ||||||||||||
Depreciation and amortization | 99 | 103 | 297 | 309 | ||||||||||||
Total expenses | 161 | 178 | 508 | 559 | ||||||||||||
Income from discontinued operations before net gain on dispositions of discontinued operations | 308 | 350 | 1,053 | 1,011 | ||||||||||||
Net gain on dispositions of discontinued operations | 12,555 | — | 12,555 | — | ||||||||||||
Total income from discontinued operations | $ | 12,863 | $ | 350 | $ | 13,608 | $ | 1,011 | ||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(in thousands, except share and per share amounts) | ||||||||||||||||
Numerator: | ||||||||||||||||
Income from continuing operations | $ | 1,427 | $ | 3,319 | $ | 9,021 | $ | 13,491 | ||||||||
Loss (income) from continuing operations attributable to noncontrolling common units of the Operating Partnership | 67 | 15 | 65 | (94 | ) | |||||||||||
Preferred distributions and dividends | (3,799 | ) | (3,799 | ) | (11,397 | ) | (11,397 | ) | ||||||||
Allocation to participating securities (nonvested shares and RSUs) | (330 | ) | (273 | ) | (979 | ) | (877 | ) | ||||||||
Numerator for basic and diluted (loss) income from continuing operations available to common stockholders | (2,635 | ) | (738 | ) | (3,290 | ) | 1,123 | |||||||||
Income from discontinued operations | 12,863 | 350 | 13,608 | 1,011 | ||||||||||||
Income from discontinued operations attributable to noncontrolling common units of the Operating Partnership | (363 | ) | (11 | ) | (385 | ) | (34 | ) | ||||||||
Numerator for basic and diluted net income (loss) available to common stockholders | $ | 9,865 | $ | (399 | ) | $ | 9,933 | $ | 2,100 | |||||||
Denominator: | ||||||||||||||||
Basic weighted average vested shares outstanding | 58,355,127 | 52,274,316 | 56,136,477 | 48,561,614 | ||||||||||||
Effect of dilutive securities-Exchangeable Notes and stock options | — | — | — | 3,414 | ||||||||||||
Diluted weighted average vested shares and common share equivalents outstanding | 58,355,127 | 52,274,316 | 56,136,477 | 48,565,028 | ||||||||||||
Basic earnings per share: | ||||||||||||||||
(Loss) income from continuing operations available to common stockholders per share | $ | (0.05 | ) | $ | (0.01 | ) | $ | (0.06 | ) | $ | 0.02 | |||||
Income from discontinued operations per common share | 0.22 | 0.00 | 0.24 | 0.02 | ||||||||||||
Net income (loss) available to common stockholders per share | $ | 0.17 | $ | (0.01 | ) | $ | 0.18 | $ | 0.04 | |||||||
Diluted earnings per share: | ||||||||||||||||
(Loss) income from continuing operations available to common stockholders per share | $ | (0.05 | ) | $ | (0.01 | ) | $ | (0.06 | ) | $ | 0.02 | |||||
Income from discontinued operations per common share | 0.22 | 0.00 | 0.24 | 0.02 | ||||||||||||
Net income (loss) available to common stockholders per share | $ | 0.17 | $ | (0.01 | ) | $ | 0.18 | $ | 0.04 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2011 | 2010 | 2011 | 2010 | ||||||||||||
(in thousands, except unit and per unit amounts) | |||||||||||||||
Numerator: | |||||||||||||||
Income from continuing operations | $ | 1,427 | $ | 3,319 | $ | 9,021 | $ | 13,491 | |||||||
Income from continuing operations attributable to noncontrolling interests in consolidated subsidiaries | (30 | ) | (41 | ) | (95 | ) | (138 | ) | |||||||
Preferred distributions | (3,799 | ) | (3,799 | ) | (11,397 | ) | (11,397 | ) | |||||||
Allocation to participating securities (nonvested units and RSUs) | (330 | ) | (273 | ) | (979 | ) | (877 | ) | |||||||
Numerator for basic and diluted (loss) income from continuing operations available to common unitholders | (2,732 | ) | (794 | ) | (3,450 | ) | 1,079 | ||||||||
Income from discontinued operations | 12,863 | 350 | 13,608 | 1,011 | |||||||||||
Numerator for basic and diluted net income (loss) available to common unitholders | $ | 10,131 | $ | (444 | ) | $ | 10,158 | $ | 2,090 | ||||||
Denominator: | |||||||||||||||
Basic weighted average vested units outstanding | 60,073,258 | 53,997,447 | 57,857,538 | 50,284,745 | |||||||||||
Effect of dilutive securities-Exchangeable Notes and stock options | — | — | — | 3,414 | |||||||||||
Diluted weighted average vested units and common unit equivalents outstanding | 60,073,258 | 53,997,447 | 57,857,538 | 50,288,159 | |||||||||||
Basic earnings per unit: | |||||||||||||||
(Loss) income from continuing operations available to common unitholders per unit | $ | (0.05 | ) | $ | (0.01 | ) | $ | (0.06 | ) | $ | 0.02 | ||||
Income from discontinued operations per common unit | 0.22 | 0.00 | 0.24 | 0.02 | |||||||||||
Net income (loss) available to common unitholders per unit | $ | 0.17 | $ | (0.01 | ) | $ | 0.18 | $ | 0.04 | ||||||
Diluted earnings per unit: | |||||||||||||||
(Loss) income from continuing operations available to common unitholders per unit | $ | (0.05 | ) | $ | (0.01 | ) | $ | (0.06 | ) | $ | 0.02 | ||||
Income from discontinued operations per common unit | 0.22 | 0.00 | 0.24 | 0.02 | |||||||||||
Net income (loss) available to common unitholders per unit | $ | 0.17 | $ | (0.01 | ) | $ | 0.18 | $ | 0.04 |
Three Months Ended September 30, (1) | Nine Months Ended September 30, (1) | ||||||||||||||
2011 | 2010 | 2011 | 2010 | ||||||||||||
(in thousands except per share amounts) | |||||||||||||||
Revenues | $ | 99,938 | $ | 86,490 | $ | 291,600 | $ | 239,270 | |||||||
Net income (loss) available to common stockholders(2)(3) | $ | 11,692 | $ | (1,284 | ) | $ | 9,896 | $ | 2,692 | ||||||
Net income (loss) available to common stockholders per share - basic(2)(3) | $ | 0.19 | $ | (0.03 | ) | $ | 0.16 | $ | 0.04 | ||||||
Net income (loss) available to common stockholders per share - diluted(2)(3) | $ | 0.19 | $ | (0.03 | ) | $ | 0.16 | $ | 0.04 |
(1) | The purchase of 601 108th Avenue N.E., Bellevue, WA, and 201 Third Street, San Francisco, CA, represent the largest acquisitions and 61.7% of the total aggregate purchase price of the properties acquired during the nine months ended September 30, 2011. |
(2) | The pro forma results for the three and nine months ended September 30, 2011 were adjusted to exclude acquisition-related expenses of approximately $0.4 million and $0.6 million, respectively, incurred in 2011 for the acquisition of 601 108th Avenue N.E., Bellevue, WA, and 201 Third Street, San Francisco, CA. The pro forma results for the three and nine months ended September 30, 2010 were adjusted to include these expenses. |
(3) | The pro forma results for all periods presented includes incremental interest expense assuming the acquisitions were funded by pro forma borrowings under the Credit Facility. The pro forma interest expense estimate is calculated based on the actual interest rate in effect on the Credit Facility for each respective period. Actual funding of the acquisitions may be from different sources and the pro forma borrowings and related pro forma interest expense estimate assumed herein are not indicative of actual results. |
(in thousands) | |||
Revenues | $ | 6,481 | |
Net loss(1) | (31 | ) |
(1) | Reflects the net operating income less depreciation for these properties and amortization of acquisition-related intangibles. |
Three Months Ended September 30, (1) | Nine Months Ended September 30, (1) | ||||||||||||||
2011 | 2010 | 2011 | 2010 | ||||||||||||
(in thousands except per share amounts) | |||||||||||||||
Revenues | $ | 99,938 | $ | 86,490 | $ | 291,600 | $ | 239,270 | |||||||
Net income (loss) available to common unitholders(2)(3) | $ | 12,001 | $ | (1,367 | ) | $ | 10,090 | $ | 2,672 | ||||||
Net income (loss) available to common unitholders per unit - basic(2)(3) | $ | 0.19 | $ | (0.03 | ) | $ | 0.16 | $ | 0.04 | ||||||
Net income (loss) available to common unitholders per unit - diluted(2)(3) | $ | 0.19 | $ | (0.03 | ) | $ | 0.16 | $ | 0.04 |
(1) | The purchase of 601 108th Avenue N.E., Bellevue, WA, and 201 Third Street, San Francisco, CA, represent the largest acquisitions and 61.7% of the total aggregate purchase price of the properties acquired during the nine months ended September 30, 2011. |
(2) | The pro forma results for the three and nine months ended September 30, 2011 were adjusted to exclude acquisition-related expenses of approximately $0.4 million and $0.6 million, respectively, incurred in 2011 for the acquisition of 601 108th Avenue N.E., Bellevue, WA, and 201 Third Street, San Francisco, CA. The pro forma results for the three and nine months ended September 30, 2010 were adjusted to include these expenses. |
(3) | The pro forma results for all periods presented includes incremental interest expense assuming the acquisitions were funded by pro forma borrowings under the Credit Facility. The pro forma interest expense estimate is calculated based on the actual interest rate in effect on the Credit Facility for each respective period. Actual funding of the acquisitions may be from different sources and the pro forma borrowing and related pro forma interest expense estimate assumed herein are not indicative of actual results. |
(in thousands) | |||
Revenues | $ | 6,481 | |
Net loss(1) | (31 | ) |
(1) | Reflects the net operating income less depreciation for these properties and amortization of acquisition-related intangibles. |
1st & 2nd Generation(1) | 2nd Generation(1) | ||||||||||||||||||||||
Number of Leases(2) | Rentable Square Feet(2) | Changes in Rents(3) | Changes in Cash Rents(4) | Retention Rates(5) | Weighted Average Lease Term (in months) | ||||||||||||||||||
New | Renewal | New | Renewal | ||||||||||||||||||||
Office Properties | 19 | 15 | 251,372 | 157,432 | (3.5 | )% | (5.7 | )% | 81.7 | % | 107 | ||||||||||||
Industrial Properties | 3 | 5 | 88,200 | 193,665 | (18.9 | )% | (28.9 | )% | 100.0 | % | 62 | ||||||||||||
Total portfolio | 22 | 20 | 339,572 | 351,097 | (9.3 | )% | (14.1 | )% | 90.9 | % | 87 |
1st & 2nd Generation(1) | 2nd Generation(1) | ||||||||||||||||||||||
Number of Leases(2) | Rentable Square Feet(2) | Changes in Rents(3) | Changes in Cash Rents(4) | Retention Rates(5) | Weighted Average Lease Term (in months) | ||||||||||||||||||
New | Renewal | New | Renewal | ||||||||||||||||||||
Office Properties | 56 | 32 | 618,821 | 276,761 | (7.7 | )% | (11.4 | )% | 40.6 | % | 84 | ||||||||||||
Industrial Properties | 8 | 7 | 233,470 | 285,431 | (18.5 | )% | (27.7 | )% | 97.9 | % | 72 | ||||||||||||
Total portfolio | 64 | 39 | 852,291 | 562,192 | (10.7 | )% | (15.7 | )% | 57.8 | % | 79 |
(1) | First generation leasing includes space where we have made capital expenditures that result in additional revenue generated when the space is re-leased. Second generation leasing includes space where we have made capital expenditures to maintain the current market revenue stream. |
(2) | Represents leasing activity for leases that commenced during the period, including first and second generation space, net of month-to-month leases. Excludes development and redevelopment leasing. |
(3) | Calculated as the change between GAAP rents for new/renewed leases and the expiring GAAP rents for the same space. Excludes leases for which the space was vacant longer than one year, or vacant when the property was acquired. |
(4) | Calculated as the change between stated rents for new/renewed leases and the expiring stated rents for the same space. Excludes leases for which the space was vacant longer than one year, or vacant when the property was acquired. |
(5) | Calculated as the percentage of space either renewed or expanded into by existing tenants or subtenants at lease expiration. |
Year of Lease Expiration | Number of Expiring Leases | Net Rentable Area Subject to Expiring Leases (Sq. Ft.) | Percentage of Leased Square Feet Represented by Expiring Leases | Annualized Base Rental Revenue Under Expiring Leases (000's)(2) | Percentage of Annualized Base Rental Revenue Represented by Expiring Leases(2) | Average Annualized Base Rental Revenue Per Square Foot Under Expiring Leases (000's)(2) | ||||||||||||||
Office Properties: | ||||||||||||||||||||
Remainder of 2011 | 8 | 66,433 | 0.5 | % | $ | 1,351 | 0.4 | % | $ | 20.34 | ||||||||||
2012 | 79 | 790,207 | 5.6 | % | 22,021 | 6.5 | % | 27.87 | ||||||||||||
2013 | 87 | 1,149,860 | 8.3 | % | 32,839 | 9.6 | % | 28.56 | ||||||||||||
2014 | 86 | 1,398,332 | 10.1 | % | 38,133 | 11.1 | % | 27.27 | ||||||||||||
2015 | 123 | 1,993,201 | 14.3 | % | 61,115 | 17.9 | % | 30.66 | ||||||||||||
2016 | 55 | 644,833 | 4.6 | % | 15,855 | 4.6 | % | 24.59 | ||||||||||||
Total Office | 438 | 6,042,866 | 43.4 | % | 171,314 | 50.1 | % | $ | 28.35 | |||||||||||
Industrial Properties: | ||||||||||||||||||||
Remainder of 2011 | — | — | — | % | — | — | % | |||||||||||||
2012 | 9 | 354,994 | 2.6 | % | 2,491 | 0.7 | % | $ | 7.02 | |||||||||||
2013 | 10 | 665,357 | 4.8 | % | 4,857 | 1.4 | % | 7.30 | ||||||||||||
2014 | 19 | 574,386 | 4.1 | % | 4,604 | 1.3 | % | 8.02 | ||||||||||||
2015 | 11 | 655,351 | 4.7 | % | 4,314 | 1.3 | % | 6.58 | ||||||||||||
2016 | 5 | 139,845 | 1.0 | % | 825 | 0.2 | % | 5.90 | ||||||||||||
Total Industrial | 54 | 2,389,933 | 17.2 | % | 17,091 | 4.9 | % | $ | 7.15 | |||||||||||
Total | 492 | 8,432,799 | 60.6 | % | $ | 188,405 | 55.0 | % | $ | 22.34 |
(1) | The information presented reflects leasing activity through September 30, 2011. For leases that have been renewed early or space that has been re-leased to a new tenant, the expiration date and annualized base rent information presented takes into consideration the renewed or re-leased lease terms. Excludes space leased under month-to-month leases and vacant space as of September 30, 2011. |
(2) | Reflects annualized contractual base rent calculated on a straight-line basis in accordance with GAAP excluding the amortization of deferred revenue related to tenant-funded tenant improvements and expense reimbursement revenue. Additionally, the underlying leases contain various expense structures including full service gross, modified gross and triple net. Amounts represent percentage of total portfolio annualized contractual base rental revenue. |
Office Properties | Industrial Properties | Total | |||||||||||||||
Number of Buildings | Rentable Square Feet | Number of Buildings | Rentable Square Feet | Number of Buildings | Rentable Square Feet | ||||||||||||
Total as of September 30, 2010 | 99 | 9,809,506 | 41 | 3,654,463 | 140 | 13,463,969 | |||||||||||
Acquisitions | 12 | 2,164,271 | 12 | 2,164,271 | |||||||||||||
Properties moved to the redevelopment portfolio | (2 | ) | (209,561 | ) | (2 | ) | (209,561 | ) | |||||||||
Dispositions | (4 | ) | (197,349 | ) | (1 | ) | (51,567 | ) | (5 | ) | (248,916 | ) | |||||
Remeasurement | 7,377 | 2,511 | — | 9,888 | |||||||||||||
Total as of September 30, 2011 | 105 | 11,574,244 | 40 | 3,605,407 | 145 | 15,179,651 |
Region | Number of Buildings | Square Feet Total | Occupancy at(1) | ||||||||||||
9/30/2011 | 6/30/2011 | 12/31/2010 | |||||||||||||
Office Properties: | |||||||||||||||
Los Angeles and Ventura Counties | 28 | 2,976,006 | 84.1 | % | 82.9 | % | 89.3 | % | |||||||
San Diego | 61 | 5,435,280 | 92.6 | 88.4 | 86.4 | ||||||||||
Orange County | 5 | 540,656 | 91.4 | 92.5 | 93.1 | ||||||||||
San Francisco Bay Area | 5 | 1,731,805 | 95.4 | 93.1 | 84.3 | ||||||||||
Greater Seattle | 6 | 890,497 | 90.2 | 90.4 | 100.0 | ||||||||||
105 | 11,574,244 | 90.6 | 87.9 | 87.5 | |||||||||||
Industrial Properties: | |||||||||||||||
Los Angeles County | 1 | 192,053 | 100.0 | 100.0 | 100.0 | ||||||||||
Orange County | 39 | 3,413,354 | 100.0 | 97.4 | 93.5 | ||||||||||
40 | 3,605,407 | 100.0 | 97.6 | 93.9 | |||||||||||
Total Stabilized Portfolio | 145 | 15,179,651 | 92.8 | % | 90.2 | % | 89.1 | % |
Average Occupancy for Three Months Ended September 30, | |||||||||||
Stabilized Portfolio(1) | Core Portfolio(2) | ||||||||||
2011 | 2010 | 2011 | 2010 | ||||||||
Office Properties | 90.1 | % | 84.9 | % | 89.4 | % | 85.8 | % | |||
Industrial Properties | 98.4 | % | 86.8 | % | 98.4 | % | 86.5 | % | |||
Total Portfolio | 92.1 | % | 85.4 | % | 92.3 | % | 86.0 | % |
Average Occupancy for Nine Months Ended September 30, | |||||||||||
Stabilized Portfolio(1) | Core Portfolio(2) | ||||||||||
2011 | 2010 | 2011 | 2010 | ||||||||
Office Properties | 89.0 | % | 83.5 | % | 89.2 | % | 84.4 | % | |||
Industrial Properties | 96.6 | % | 85.7 | % | 96.6 | % | 85.4 | % | |||
Total Portfolio | 90.8 | % | 84.1 | % | 91.5 | % | 84.7 | % |
(1) | Occupancy percentages reported are based on our stabilized portfolio as of the end of the period presented. |
(2) | Occupancy percentages reported are based on Office Properties and Industrial Properties owned and stabilized as of January 1, 2010 and still owned and stabilized as of September 30, 2011. |
Three Months Ended September 30, | Dollar Change | Percentage Change | ||||||||||||
2011 | 2010 | |||||||||||||
($ in thousands) | ||||||||||||||
Net Operating Income, as defined | $ | 69,118 | $ | 56,413 | $ | 12,705 | 22.5 | % | ||||||
Unallocated (expense) income: | ||||||||||||||
General and administrative expenses | (6,355 | ) | (7,273 | ) | 918 | (12.6 | ) | |||||||
Acquisition-related expenses | (1,163 | ) | (354 | ) | (809 | ) | 228.5 | |||||||
Depreciation and amortization | (36,152 | ) | (29,951 | ) | (6,201 | ) | 20.7 | |||||||
Interest income and other net investment gains | 30 | 337 | (307 | ) | (91.1 | ) | ||||||||
Interest expense | (24,051 | ) | (15,853 | ) | (8,198 | ) | 51.7 | |||||||
Income from continuing operations | 1,427 | 3,319 | (1,892 | ) | (57.0 | )% | ||||||||
Income from discontinued operations | 12,863 | 350 | 12,513 | 3,575.1 | % | |||||||||
Net income | $ | 14,290 | $ | 3,669 | $ | 10,621 | 289.5 | % |
2011 | 2010 | ||||||||||||||||||||||||||||||
Core Portfolio(1) | Acquisitions Portfolio(2) | Other | Total Portfolio | Core Portfolio(1) | Acquisitions Portfolio(2) | Other | Total Portfolio | ||||||||||||||||||||||||
(in thousands) | (in thousands) | ||||||||||||||||||||||||||||||
Operating revenues: | |||||||||||||||||||||||||||||||
Rental income | $ | 62,578 | $ | 26,363 | $ | 365 | $ | 89,306 | $ | 60,036 | $ | 11,145 | $ | 954 | $ | 72,135 | |||||||||||||||
Tenant reimbursements | 5,038 | 2,547 | 98 | 7,683 | 5,692 | 220 | 244 | 6,156 | |||||||||||||||||||||||
Other property income | 328 | 20 | — | 348 | 799 | 86 | 100 | 985 | |||||||||||||||||||||||
Total | 67,944 | 28,930 | 463 | 97,337 | 66,527 | 11,451 | 1,298 | 79,276 | |||||||||||||||||||||||
Property and related expenses: | |||||||||||||||||||||||||||||||
Property expenses | 12,364 | 6,702 | 295 | 19,361 | 12,444 | 2,803 | 555 | 15,802 | |||||||||||||||||||||||
Real estate taxes | 5,143 | 2,880 | 337 | 8,360 | 5,867 | 1,221 | 494 | 7,582 | |||||||||||||||||||||||
Provision for bad debts | (5 | ) | — | — | (5 | ) | (857 | ) | — | — | (857 | ) | |||||||||||||||||||
Ground leases | 274 | 193 | 36 | 503 | 300 | — | 36 | 336 | |||||||||||||||||||||||
Total | 17,776 | 9,775 | 668 | 28,219 | 17,754 | 4,024 | 1,085 | 22,863 | |||||||||||||||||||||||
Net Operating Income (Loss), as defined | $ | 50,168 | $ | 19,155 | $ | (205 | ) | $ | 69,118 | $ | 48,773 | $ | 7,427 | $ | 213 | $ | 56,413 |
(1) | Properties owned and stabilized as of January 1, 2010 and still owned and stabilized as of September 30, 2011. |
(2) | Includes results, from the dates of acquisition through the periods presented, for the ten office buildings we acquired during 2010 and the nine office buildings we acquired during the nine months ended September 30, 2011. |
Three Months Ended September 30, 2011 As Compared to the Three Months Ended September 30, 2010 | ||||||||||||||||||||
Core Portfolio | Acquisitions Portfolio | Total Portfolio | ||||||||||||||||||
Dollar Change | Percentage Change | Dollar Change | Percentage Change | Dollar Change | Percentage Change | |||||||||||||||
($ in thousands) | ||||||||||||||||||||
Operating revenues: | ||||||||||||||||||||
Rental income | $ | 2,542 | 4.2 | % | $ | 15,218 | 136.5 | % | $ | 17,171 | 23.8 | % | ||||||||
Tenant reimbursements | (654 | ) | (11.5 | ) | 2,327 | 1,057.7 | 1,527 | 24.8 | ||||||||||||
Other property income | (471 | ) | (58.9 | ) | (66 | ) | (76.7 | ) | (637 | ) | (64.7 | ) | ||||||||
Total | 1,417 | 2.1 | 17,479 | 152.6 | 18,061 | 22.8 | ||||||||||||||
Property and related expenses: | ||||||||||||||||||||
Property expenses | (80 | ) | (0.6 | ) | 3,899 | 139.1 | 3,559 | 22.5 | ||||||||||||
Real estate taxes | (724 | ) | (12.3 | ) | 1,659 | 135.9 | 778 | 10.3 | ||||||||||||
Provision for bad debts | 852 | 99.4 | — | — | 852 | 99.4 | ||||||||||||||
Ground leases | (26 | ) | (8.7 | ) | 193 | 100.0 | 167 | 49.7 | ||||||||||||
Total | 22 | 0.1 | 5,751 | 142.9 | 5,356 | 23.4 | ||||||||||||||
Net Operating Income, as defined | $ | 1,395 | 2.9 | % | $ | 11,728 | 157.9 | % | $ | 12,705 | 22.5 | % |
• | An increase of $11.7 million attributable to the ten office buildings we acquired during 2010 and the nine office buildings we acquired during the nine months ended September 30, 2011 (the “Acquisitions Portfolio”); |
• | An increase of $1.4 million attributable to the properties owned and stabilized as of January 1, 2010 and still owned and stabilized as of September 30, 2011 (the “Core Portfolio”) primarily as a result of: |
▪ | An increase in rental income of $2.5 million primarily resulting from an increase in average occupancy of 6.3%, from 86.0% for the three months ended September 30, 2010, to 92.3% for the three months ended September 30, 2011; |
▪ | An offsetting decrease in tenant reimbursements of $0.7 million primarily resulting from the resetting of base year expense levels for recent lease renewals and reduced tenant reimbursement revenue attributable to one tenant that vacated one of our buildings at the end of their lease; |
▪ | An increase to Net Operating Income of $0.7 million resulting from a decrease in real estate taxes as a result of successful property tax appeals and lower than expected supplemental tax increases; |
• | A decrease to Net Operating Income of approximately $1.2 million resulting from: |
• | The reversal of $0.6 million of provision for bad debts during the three months ended September 30, 2010 resulting from the settlement of outstanding litigation at one of our properties; |
• | The recognition of $0.6 million in other property income during the three months ended September 30, 2010 as a result of a lease termination fee; and |
• | An offsetting decrease of $0.5 million generated by one office building that was moved from the stabilized portfolio to the redevelopment portfolio during the three months ended September 30, 2010 and two office buildings that were moved to the redevelopment portfolio from the stabilized portfolio upon commencement of redevelopment in 2011 (the "Redevelopment Properties"). |
• | A decrease in share-based compensation expense (see Note 9 to our consolidated financial statements for more information); and |
• | An adjustment to decrease our deferred compensation plan liability to fair value (see Note 12 to our consolidated financial statements included in this report and the discussion under the caption — Interest Income and Other Net Investment Gains below for more information). |
2011 | 2010 | Dollar Change | Percentage Change | |||||||||||
($ in thousands) | ||||||||||||||
Gross interest expense | $ | 26,449 | $ | 18,543 | $ | 7,906 | 42.6 | % | ||||||
Capitalized interest | (2,398 | ) | (2,690 | ) | 292 | (10.9 | )% | |||||||
Interest expense | $ | 24,051 | $ | 15,853 | $ | 8,198 | 51.7 | % |
Nine Months Ended September 30, | Dollar Change | Percentage Change | ||||||||||||
2011 | 2010 | |||||||||||||
($ in thousands) | ||||||||||||||
Net Operating Income, as defined | $ | 195,601 | $ | 155,374 | $ | 40,227 | 25.9 | % | ||||||
Unallocated (expense) income: | ||||||||||||||
General and administrative expenses | (20,355 | ) | (21,096 | ) | 741 | (3.5 | ) | |||||||
Acquisition-related expenses | (2,829 | ) | (1,624 | ) | (1,205 | ) | 74.2 | |||||||
Depreciation and amortization | (97,513 | ) | (74,405 | ) | (23,108 | ) | 31.1 | |||||||
Interest income and other net investment gains | 272 | 703 | (431 | ) | (61.3 | ) | ||||||||
Interest expense | (66,155 | ) | (40,897 | ) | (25,258 | ) | 61.8 | |||||||
Loss on early extinguishment of debt | — | (4,564 | ) | 4,564 | 100.0 | |||||||||
Income from continuing operations | 9,021 | 13,491 | (4,470 | ) | (33.1 | )% | ||||||||
Income from discontinued operations | 13,608 | 1,011 | 12,597 | 1,246.0 | % | |||||||||
Net income | $ | 22,629 | $ | 14,502 | $ | 8,127 | 56.0 | % |
2011 | 2010 | ||||||||||||||||||||||||||||||
Core Portfolio(1) | Acquisitions Portfolio(2) | Other | Total Portfolio | Core Portfolio(1) | Acquisitions Portfolio(2) | Other | Total Portfolio | ||||||||||||||||||||||||
(in thousands) | (in thousands) | ||||||||||||||||||||||||||||||
Operating revenues: | |||||||||||||||||||||||||||||||
Rental income | $ | 185,913 | $ | 65,093 | $ | 1,096 | $ | 252,102 | $ | 177,726 | $ | 14,479 | $ | 4,678 | $ | 196,883 | |||||||||||||||
Tenant reimbursements | 16,058 | 5,259 | 152 | 21,469 | 16,696 | 287 | 1,278 | 18,261 | |||||||||||||||||||||||
Other property income | 2,767 | 64 | 32 | 2,863 | 1,938 | 87 | 300 | 2,325 | |||||||||||||||||||||||
Total | 204,738 | 70,416 | 1,280 | 276,434 | 196,360 | 14,853 | 6,256 | 217,469 | |||||||||||||||||||||||
Property and related expenses: | |||||||||||||||||||||||||||||||
Property expenses | 37,215 | 16,234 | 1,099 | 54,548 | 36,652 | 3,653 | 1,950 | 42,255 | |||||||||||||||||||||||
Real estate taxes | 16,536 | 7,152 | 1,190 | 24,878 | 16,981 | 1,588 | 1,466 | 20,035 | |||||||||||||||||||||||
Provision for bad debts | 141 | — | — | 141 | (843 | ) | — | — | (843 | ) | |||||||||||||||||||||
Ground leases | 906 | 253 | 107 | 1,266 | 673 | — | (25 | ) | 648 | ||||||||||||||||||||||
Total | 54,798 | 23,639 | 2,396 | 80,833 | 53,463 | 5,241 | 3,391 | 62,095 | |||||||||||||||||||||||
Net Operating Income (Loss), as defined | $ | 149,940 | $ | 46,777 | $ | (1,116 | ) | $ | 195,601 | $ | 142,897 | $ | 9,612 | $ | 2,865 | $ | 155,374 |
(1) | Properties owned and stabilized as of January 1, 2010 and still owned and stabilized as of September 30, 2011. |
(2) | Includes results, from the dates of acquisition through the periods presented, for the ten office buildings we acquired during 2010 and the nine office buildings we acquired during the nine months ended September 30, 2011. |
Nine Months Ended September 30, 2011 As Compared to the Nine Months Ended September 30, 2010 | ||||||||||||||||||||
Core Portfolio | Acquisitions Portfolio | Total Portfolio | ||||||||||||||||||
Dollar Change | Percentage Change | Dollar Change | Percentage Change | Dollar Change | Percentage Change | |||||||||||||||
($ in thousands) | ||||||||||||||||||||
Operating revenues: | ||||||||||||||||||||
Rental income | $ | 8,187 | 4.6 | % | $ | 50,614 | 349.6 | % | $ | 55,219 | 28.0 | % | ||||||||
Tenant reimbursements | (638 | ) | (3.8 | ) | 4,972 | 1,732.4 | 3,208 | 17.6 | ||||||||||||
Other property income | 829 | 42.8 | (23 | ) | (26.4 | ) | 538 | 23.1 | ||||||||||||
Total | 8,378 | 4.3 | 55,563 | 374.1 | 58,965 | 27.1 | ||||||||||||||
Property and related expenses: | ||||||||||||||||||||
Property expenses | 563 | 1.5 | 12,581 | 344.4 | 12,293 | 29.1 | ||||||||||||||
Real estate taxes | (445 | ) | (2.6 | ) | 5,564 | 350.4 | 4,843 | 24.2 | ||||||||||||
Provision for bad debts | 984 | (116.7 | ) | — | — | 984 | (116.7 | ) | ||||||||||||
Ground leases | 233 | 34.6 | 253 | 100.0 | 618 | 95.4 | ||||||||||||||
Total | 1,335 | 2.5 | 18,398 | 351.0 | 18,738 | 30.2 | ||||||||||||||
Net Operating Income, as defined | $ | 7,043 | 4.9 | % | $ | 37,165 | 386.7 | % | $ | 40,227 | 25.9 | % |
• | An increase of $37.2 million attributable to the Acquisitions Portfolio; |
• | An increase of $7.0 million attributable to the Core Portfolio primarily as a result of: |
▪ | An increase in rental income of $8.2 million primarily resulting from an increase in average occupancy of 6.8%, from 84.7% for the nine months ended September 30, 2010, to 91.5% for the nine months ended September 30, 2011; |
• | A decrease to Net Operating Income of approximately $1.2 million resulting from: |
• | The reversal of $0.6 million of provision for bad debts during the nine months ended September 30, 2010 related to the settlement of outstanding litigation at one of our properties. The remaining year over year increase in the provision for bad debts resulted from changes in our estimates of the collectibility of receivables from certain watchlist tenants; and |
• | The recognition of $0.6 million in other property income during the nine months ended September 30, 2010 related to a lease termination fee; and |
• | An offsetting decrease of $4.0 million primarily attributable to the Redevelopment Properties that were removed from the stabilized portfolio upon commencement of redevelopment. |
• | A decrease in share-based compensation expense (see Note 9 to our consolidated financial statements for more information); and |
• | An adjustment to decrease our deferred compensation plan liability to fair value (see Note 12 to our consolidated financial statements included in this report and the discussion under the caption — Interest Income and Other Net Investment Gains below for more information). |
2011 | 2010 | Dollar Change | Percentage Change | |||||||||||
($ in thousands) | ||||||||||||||
Gross interest expense | $ | 72,597 | $ | 48,980 | $ | 23,617 | 48.2 | % | ||||||
Capitalized interest | (6,442 | ) | (8,083 | ) | 1,641 | (20.3 | )% | |||||||
Interest expense | $ | 66,155 | $ | 40,897 | $ | 25,258 | 61.8 | % |
Shares/Units at September 30, 2011 | Aggregate Principal Amount or $ Value Equivalent | % of Total Market Capitalization | |||||||
($ in thousands) | |||||||||
Debt: | |||||||||
Credit Facility | $ | — | — | % | |||||
3.25% Exchangeable Notes due 2012(1) | 148,000 | 3.8 | |||||||
4.25% Exchangeable Notes due 2014(1) | 172,500 | 4.5 | |||||||
Unsecured Senior Notes due 2014 | 83,000 | 2.1 | |||||||
Unsecured Senior Notes due 2015(1) | 325,000 | 8.4 | |||||||
Unsecured Senior Notes due 2018(1) | 325,000 | 8.4 | |||||||
Unsecured Senior Notes due 2020(1) | 250,000 | 6.5 | |||||||
Secured debt(1) | 473,400 | 12.3 | |||||||
Total debt | $ | 1,776,900 | 46.0 | ||||||
Equity and Noncontrolling Interest: | |||||||||
7.450% Series A Cumulative Redeemable Preferred units(2) | 1,500,000 | $ | 75,000 | 1.9 | % | ||||
7.800% Series E Cumulative Redeemable Preferred stock(3) | 1,610,000 | 40,250 | 1.0 | ||||||
7.500% Series F Cumulative Redeemable Preferred stock(3) | 3,450,000 | 86,250 | 2.2 | ||||||
Common units outstanding(4)(5) | 1,718,131 | 53,778 | 1.4 | ||||||
Common shares outstanding(5) | 58,464,412 | 1,829,936 | 47.5 | ||||||
Total equity and noncontrolling interests | 2,085,214 | 54.0 | |||||||
Total Market Capitalization | $ | 3,862,114 | 100.0 | % |
(1) | Represents gross aggregate principal amount due at maturity, before the effect of the unamortized discounts and premiums as of September 30, 2011. |
(2) | Value based on $50.00 per unit liquidation preference. |
(3) | Value based on $25.00 per share liquidation preference. |
(4) | Represents common units not owned by the Company. |
(5) | Value based on closing price per share of our common stock of $31.30 as of September 30, 2011. |
• | Net cash flow from operations; |
• | Borrowings under the Credit Facility; |
• | Proceeds from additional secured or unsecured debt financings; |
• | Proceeds from public or private issuance of debt or equity securities; and |
• | Proceeds from the disposition of nonstrategic assets. |
• | Property or undeveloped land acquisitions; |
• | Property operating and corporate expenses; |
• | Capital expenditures, tenant improvement and leasing costs; |
• | Debt service and principal payments, including debt maturities; |
• | Distributions to common and preferred security holders; |
• | Development and redevelopment costs; and |
• | Outstanding debt repurchases. |
• | In November 2011, the Operating Partnership used borrowings under the Credit Facility to repay a secured mortgage loan with an outstanding principal balance of $52.0 million that was scheduled to mature in April 2012. |
• | In October 2011, the Operating Partnership used borrowings under the Credit Facility to repay a secured mortgage loan with an outstanding principal balance of $68.7 million that was scheduled to mature in December 2011. |
• | In July 2011, we commenced a periodic stock offering program under which we may sell up to $200.0 million aggregate gross sales price of the Company's common stock from time to time. We have not issued any stock under this program as of the date of this report (see "- Liquidity Sources" below for additional information). |
• | In July 2011, the Operating Partnership issued $325.0 million in aggregate principal amount of 4.80% unsecured senior notes due July 15, 2018 (see Note 5 to our consolidated financial statements included in this report for additional information). |
• | In June 2011, the Operating Partnership amended the terms of the Credit Facility to, among other things, extend the maturity date to August 2015, reduce the interest rate to an annual rate of LIBOR plus 1.750% and reduce the facility fee to an annual rate of 0.35% (see Note 5 to our consolidated financial statements included in this report for additional information). |
• | In April 2011, the Operating Partnership assumed secured debt with a principal balance of $30.0 million in conjunction with the acquisition of four office buildings in Kirkland, Washington (see Note 5 to our consolidated financial statements included in this report for additional information). |
• | In April 2011, the Company completed an underwritten public offering of 6,037,500 shares of its common stock. The net offering proceeds, after deducting underwriting discounts and commissions and offering expenses, of approximately $221.0 million were contributed to the Operating Partnership (see Notes 7 and 8 to our consolidated financial statements included in this report for additional information). |
• | In January 2011, the Operating Partnership borrowed $135.0 million under a mortgage loan. The mortgage loan is secured by one property in San Francisco, bears interest at an annual rate of 4.27%, requires interest-only payments for the first two years with a 30-year amortization schedule thereafter, and is scheduled to mature on February 1, 2018 (see Note 5 to our consolidated financial statements included in this report for additional information). |
September 30, 2011 | December 31, 2010 | ||||||
(in thousands) | |||||||
Outstanding borrowings (1) | $ | — | $ | 159,000 | |||
Remaining borrowing capacity | 500,000 | 341,000 | |||||
Total borrowing capacity (2) | $ | 500,000 | $ | 500,000 | |||
Interest rate(3) | — | 2.99 | % | ||||
Facility fee - annual rate (4) | 0.350 | % | 0.575 | % | |||
Maturity date (5) | August 2015 | August 2013 |
Aggregate Principal Amount Outstanding | ||||
(in thousands) | ||||
3.25% Exchangeable Notes due 2012 (1) | $ | 148,000 | ||
4.25% Exchangeable Notes due 2014 (1) | 172,500 | |||
Unsecured Senior Notes due 2014 | 83,000 | |||
Unsecured Senior Notes due 2015 (1) | 325,000 | |||
Unsecured Senior Notes due 2018 (1) | 325,000 | |||
Unsecured Senior Notes due 2020 (1) | 250,000 | |||
Secured Debt (1) | 473,400 | |||
Total Exchangeable Notes, Unsecured Senior Notes, and Secured Debt | $ | 1,776,900 |
(1) | Represents gross aggregate principal amount before the effect of the unamortized discounts and premiums as of September 30, 2011. |
Percentage of Total Debt | Weighted Average Interest Rate | ||||||||||
September 30, 2011 | December 31, 2010 | September 30, 2011 | December 31, 2010 | ||||||||
Secured vs. unsecured: | |||||||||||
Unsecured(1) | 73.4 | % | 78.4 | % | 5.1 | % | 4.8 | % | |||
Secured | 26.6 | 21.6 | 5.4 | 6.0 | |||||||
Variable-rate vs. fixed-rate: | |||||||||||
Variable-rate(2) (3) | — | 11.0 | — | 2.9 | |||||||
Fixed-rate(1) | 100.0 | 89.0 | 5.2 | 5.3 | |||||||
Total (stated rate)(1) | 5.2 | 5.1 | |||||||||
GAAP effective rate(4) | 5.6 | 5.7 | |||||||||
Total GAAP effective rate including debt issuance costs | 6.0 | % | 6.3 | % |
(1) | Excludes the impact of the amortization of any debt discounts/premiums. |
(2) | As of September 30, 2011 the Credit Facility was our only variable-rate debt. There were no borrowings outstanding under the Credit Facility at September 30, 2011. |
(3) | As of the date of this report, we have outstanding borrowings of $165.0 million under our Credit Facility. |
(4) | Includes the impact of the amortization of any debt discounts/premiums, excluding debt issuance costs. |
Payment Due by Period | |||||||||||||||||||
Less than 1 Year ( Remainder of 2011) | 1–3 Years (2012-2013) | 3–5 Years (2014-2015) | More than 5 Years (After 2015) | Total | |||||||||||||||
(in thousands) | |||||||||||||||||||
Principal payments—secured debt (1)(2) | $ | 70,371 | $ | 163,676 | $ | 39,325 | $ | 200,028 | $ | 473,400 | |||||||||
Principal payments—Exchangeable Notes (3) | — | 148,000 | 172,500 | — | 320,500 | ||||||||||||||
Principal payments—unsecured senior notes (4) | — | — | 408,000 | 575,000 | 983,000 | ||||||||||||||
Principal payments—Credit Facility (5) | — | — | — | — | — | ||||||||||||||
Interest payments—fixed-rate debt (6) | 21,813 | 151,886 | 127,854 | 132,611 | 434,164 | ||||||||||||||
Interest payments—variable-rate debt (5) | — | — | — | — | — | ||||||||||||||
Ground lease obligations (7) | 481 | 3,852 | 3,700 | 133,212 | 141,245 | ||||||||||||||
Lease and contractual commitments (8) | 40,668 | 4,183 | 4,021 | — | 48,872 | ||||||||||||||
Redevelopment commitments (9) | 11,000 | 18,000 | — | — | 29,000 | ||||||||||||||
Total | $ | 144,333 | $ | 489,597 | $ | 755,400 | $ | 1,040,851 | $ | 2,430,181 |
(1) | Includes the $52.0 million gross aggregate principal amount of the loan due in April 2012 before the effect of the unamortized discount of approximately $0.3 million as of September 30, 2011. Also includes the $30.0 million gross aggregate principal amount of the loan due in April 2015 before the effect of the unamortized premium of approximately $0.9 million as of September 30, 2011. |
(2) | Subsequent to September 30, 2011, we repaid two secured mortgages with principal balances of $68.7 million due in December 2011 and $52.0 million due in April 2012. These repayments were financed with proceeds from the Credit Facility. |
(6) | The information in the table above reflects our projected interest rate obligations for our fixed-rate payments based on the contractual interest rates, interest payment dates, and scheduled maturity dates. |
(7) | 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, 2011. Another 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 for that ground lease included above assumes the annual lease rental obligation in effect as of September 30, 2011. |
(8) | Amounts represent commitments under signed leases and contracts for operating properties, excluding tenant-funded tenant improvements. The timing of these expenditures may fluctuate. |
(9) | Amounts represent contractual commitments for redevelopment projects under construction at September 30, 2011. The timing of these expenditures may fluctuate based on the ultimate progress of construction. |
• | Decreases in our cash flows from operations, which could create further dependence on our Credit Facility; |
• | An increase in the proportion of variable-rate debt, which could increase our sensitivity to interest rate fluctuations in the future; |
• | A decrease in the value of our properties, which could have an adverse effect on the Operating Partnership's ability to incur additional debt, refinance existing debt at competitive rates, or comply with its existing debt obligations; and |
• | A decrease in the value of our stock, which could impact our ability to issue equity. |
Credit Facility (as defined in the Credit Agreement): | Covenant Level | Actual Performance at September 30, 2011 | ||
Total debt to total asset value | less than 60% | 39% | ||
Fixed charge coverage ratio | greater than 1.5x | 2.3x | ||
Unsecured debt ratio | greater than 1.67x | 2.34x | ||
Unencumbered asset pool debt service coverage | greater than 2.0x | 3.5x | ||
Unsecured Senior Notes due 2015, 2018 and 2020 (as defined in the Indentures): | ||||
Total debt to total asset value | less than 60% | 45% | ||
Interest coverage | greater than 1.5x | 2.8x | ||
Secured debt to total asset value | less than 40% | 12% | ||
Unencumbered asset pool value to unsecured debt | greater than 150% | 234% |
Nine Months Ended September 30, | ||||||||||||||
2011 | 2010 | Dollar Change | Percentage Change | |||||||||||
($ in thousands) | ||||||||||||||
Net cash provided by operating activities | $ | 114,065 | $ | 94,928 | $ | 19,137 | 20.2 | % | ||||||
Net cash used in investing activities | (553,215 | ) | (434,655 | ) | (118,560 | ) | 27.3 | % | ||||||
Net cash provided by financing activities | 439,791 | 338,157 | 101,634 | 30.1 | % |
• | A net increase of approximately $105.8 million provided by our various capital raising activities and |
• | An offsetting decrease of $8.6 million as a result of the dividends paid on the 6.0 million common shares we issued in our April 2011 equity offering. |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(in thousands) | ||||||||||||||||
Net income (loss) available to common stockholders | $ | 10,195 | $ | (126 | ) | $ | 10,912 | $ | 2,977 | |||||||
Adjustments: | ||||||||||||||||
Net income (loss) attributable to noncontrolling common units of the Operating Partnership | 296 | (4 | ) | 320 | 128 | |||||||||||
Depreciation and amortization of real estate assets | 35,942 | 29,820 | 96,971 | 74,049 | ||||||||||||
Net gain on dispositions of discontinued operations | (12,555 | ) | — | (12,555 | ) | — | ||||||||||
Funds From Operations(1) | $ | 33,878 | $ | 29,690 | $ | 95,648 | $ | 77,154 |
(1) | Reported amounts are attributable to common stockholders and common unitholders. |
ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
ITEM 4. | CONTROLS AND PROCEDURES |
ITEM 1. | LEGAL PROCEEDINGS |
ITEM 1A. | RISK FACTORS |
ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS-None |
ITEM 3. | DEFAULTS UPON SENIOR SECURITIES-None |
ITEM 4. | (REMOVED and RESERVED) |
ITEM 5. | OTHER INFORMATION-None |
ITEM 6. | EXHIBITS |
Exhibit Number | Description | |
3.(i)1 | Kilroy Realty Corporation Articles of Restatement(1) | |
3.(i)2 | Certificate of Limited Partnership of Kilroy Realty, L.P.(2) | |
3.(i)3 | Amendment to the Certificate of Limited Partnership of Kilroy Realty, L.P.(2) | |
3.(ii)1 | Second Amended and Restated Bylaws of Kilroy Realty Corporation(3) | |
3.(ii)2 | Amendment No. 1 to Second Amended and Restated Bylaws of Kilroy Realty Corporation(4) | |
10.1 | Sales Agreement, dated July 25, 2011, between Kilroy Realty Corporation, Kilroy Realty, LP. and Barclays Capital Inc.(5) | |
10.2 | Sales Agreement, dated July 25, 2011, between Kilroy Realty Corporation, Kilroy Realty, LP. and Wells Fargo Securities, LLC(5) | |
10.3 | Sales Agreement, dated July 25, 2011, between Kilroy Realty Corporation, Kilroy Realty, LP. and Merrill Lynch, Pierce, Fenner & Smith Incorporated(5) | |
10.4 | Sales Agreement, dated July 25, 2011, between Kilroy Realty Corporation, Kilroy Realty, LP. and J.P. Morgan Securities LLC(5) | |
31.1* | Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer of Kilroy Realty Corporation | |
31.2* | Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer of Kilroy Realty Corporation | |
31.3* | Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer of Kilroy Realty, L.P. | |
31.4* | Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer of Kilroy Realty, L.P. | |
32.1* | Section 1350 Certification of Chief Executive Officer of Kilroy Realty Corporation | |
32.2* | Section 1350 Certification of Chief Financial Officer of Kilroy Realty Corporation | |
32.3* | Section 1350 Certification of Chief Executive Officer of Kilroy Realty, L.P. | |
32.4* | Section 1350 Certification of Chief Financial Officer of Kilroy Realty, L.P. | |
101.1 | The following Kilroy Realty Corporation and Kilroy Realty, L.P. financial information for the quarter ended September 30, 2011, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets (unaudited), (ii) Consolidated Statements of Operations (unaudited), (iii) Consolidated Statements of Equity (unaudited), (iv) Consolidated Statements of Capital, (v) Consolidated Statements of Cash Flows (unaudited) and (vi) Notes to the Consolidated Financial Statements (unaudited).(6) |
* | Filed herewith |
(1) | Previously filed by Kilroy Realty Corporation as an exhibit on Form 10-K for the year ended December 31, 2009. |
(2) | Previously filed by Kilroy Realty, L.P. as an exhibit to the General Form for Registration of Securities on Form 10 as filed with the Securities and Exchange Commission on August 18, 2010. |
(3) | Previously filed by Kilroy Realty Corporation as an exhibit on Form 8-K as filed with the Securities and Exchange Commission on December 12, 2008. |
(4) | Previously filed by Kilroy Realty Corporation as an exhibit on Form 8-K as filed with the Securities and Exchange Commission on May 27, 2009. |
(5) | Previously filed by Kilroy Realty Corporation as an exhibit on Form 8-K as filed with the Securities and Exchange Commission on July 28, 2011. |
(6) | Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Exchange Act of 1934 and otherwise are not subject to liability under these sections. |
KILROY REALTY CORPORATION | ||
By: | /s/ John B. Kilroy, Jr | |
John B. Kilroy, Jr. President and Chief Executive Officer (Principal Executive Officer) | ||
By: | /s/ Tyler H. Rose | |
Tyler H. Rose Executive Vice President and Chief Financial Officer (Principal Financial Officer) | ||
By: | /s/ Heidi R. Roth | |
Heidi R. Roth Senior Vice President and Controller (Principal Accounting Officer) |
KILROY REALTY, L.P. | ||
BY: | KILROY REALTY CORPORATION | |
Its general partner | ||
By: | /s/ John B. Kilroy, Jr. | |
John B. Kilroy, Jr. President and Chief Executive Officer (Principal Executive Officer) | ||
By: | /s/ Tyler H. Rose | |
Tyler H. Rose Executive Vice President and Chief Financial Officer (Principal Financial Officer) | ||
By: | /s/ Heidi R. Roth | |
Heidi R. Roth Senior Vice President and Controller (Principal Accounting Officer) |
1. | I have reviewed this quarterly report on Form 10-Q of Kilroy Realty Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's Board of Directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ John B. Kilroy, Jr. |
John B. Kilroy, Jr. |
President and Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of Kilroy Realty Corporation; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's Board of Directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ Tyler H. Rose |
Tyler H. Rose |
Executive Vice President and Chief Financial Officer |
1. | I have reviewed this quarterly report on Form 10-Q of Kilroy Realty, L.P. ; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's Board of Directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ John B. Kilroy, Jr. |
John B. Kilroy, Jr. |
President and Chief Executive Officer |
Kilroy Realty Corporation, sole general partner of |
Kilroy Realty, L.P. |
1. | I have reviewed this quarterly report on Form 10-Q of Kilroy Realty, L.P. ; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's Board of Directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ Tyler H. Rose |
Tyler H. Rose |
Executive Vice President and Chief Financial Officer |
Kilroy Realty Corporation, sole general partner of |
Kilroy Realty, L.P. |
(i) | the accompanying Quarterly Report on Form 10-Q of the Company for the quarter ended September 30, 2011 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and |
(ii) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ John B. Kilroy, Jr. |
John B. Kilroy, Jr. |
President and Chief Executive Officer |
Date: November 2, 2011 |
(i) | the accompanying Quarterly Report on Form 10-Q of the Company for the quarter ended September 30, 2011 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and |
(ii) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Tyler H. Rose |
Tyler H. Rose |
Executive Vice President and Chief Financial Officer |
Date: November 2, 2011 |
(i) | the accompanying Quarterly Report on Form 10-Q of the Operating Partnership for the quarter ended September 30, 2011 (the "Report") fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and |
(ii) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Operating Partnership. |
/s/ John B. Kilroy, Jr. |
John B. Kilroy, Jr. |
President and Chief Executive Officer |
Kilroy Realty Corporation, sole general partner of |
Kilroy Realty, L.P. |
Date: November 2, 2011 |
(i) | the accompanying Quarterly Report on Form 10-Q of the Operating Partnership for the quarter ended September 30, 2011 (the "Report") fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and |
(ii) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Operating Partnership. |
/s/ Tyler H. Rose |
Tyler H. Rose |
Executive Vice President and Chief Financial Officer |
Kilroy Realty Corporation, sole general partner of |
Kilroy Realty, L.P. |
Date: November 2, 2011 |
Pro Forma Results of the Operating Partnership (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pro forma results of the operating partnership | The following pro forma consolidated results of operations of the Company for the three and nine months ended September 30, 2011 and 2010 assumes that the acquisitions of 601 108th Avenue N.E., Bellevue, WA, and 201 Third Street, San Francisco, CA, were completed as of January 1, 2010. Pro forma data may not be indicative of the results that would have been reported had the acquisitions actually occurred as of January 1, 2010, nor does it intend to be a projection of future results.
________________________
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Actual results for certain operating data for the property | The following table summarizes the results of operations for the properties at 601 108th Avenue N.E., Bellevue, WA, and 201 Third Street, San Francisco, CA, from June 3, 2011 and September 15, 2011, the dates of acquisition, respectively, through September 30, 2011:
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Kilroy Realty, L.P. [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pro forma results of the operating partnership | The following pro forma consolidated results of operations of the Operating Partnership for the three and nine months ended September 30, 2011 and 2010 assumes that the acquisitions of 601 108th Avenue N.E., Bellevue, WA, and 201 Third Street, San Francisco, CA, were completed as of January 1, 2010. Pro forma data may not be indicative of the results that would have been reported had the acquisitions actually occurred as of January 1, 2010, nor does it intend to be a projection of future results.
________________________
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Actual results for certain operating data for the property | The following table summarizes the results of operations for the properties at 601 108th Avenue N.E., Bellevue, WA, and 201 Third Street, San Francisco, CA, from June 3, 2011 and September 15, 2011, the dates of acquisition, respectively, through September 30, 2011:
|
Commitments and Contingencies (Details 1) (USD $) In Millions | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
Commitments and Contingencies (Textuals) [Abstract] | |
Period after which Ground lease rentals are adjusted based on fair market value and the Consumer Price Index | 5 years |
Annual ground lease rental obligations limit | $ 1.0 |
Contractual obligations for ground lease including annual rental obligation | The minimum rent is subject to increases every five years based on 50% of the average annual percentage rent for the previous five years. |
Non-refundable escrow deposits related to potential future acquisitions | $ 11.0 |
Acquisitions (Details) (USD $) | 9 Months Ended | |||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2011
NumberofTradingDays
Years
RSF
NumberofBuildings
Share_Based_Incentive_Compensation_Plans | ||||||||||||||||||||||||
Acquired operating properties from unrelated third parties | ||||||||||||||||||||||||
Number of Buildings | 9 | |||||||||||||||||||||||
Rentable Square Feet | 1,473,984 | |||||||||||||||||||||||
Purchase Price | $ 516,300,000 | [1] | ||||||||||||||||||||||
Assets | ||||||||||||||||||||||||
Land | 56,000,000 | |||||||||||||||||||||||
Buildings and improvements | 441,658,000 | [2] | ||||||||||||||||||||||
Undeveloped Land | 2,560,000 | |||||||||||||||||||||||
Deferred leasing costs and acquisition-related intangible assets | 39,990,000 | [3] | ||||||||||||||||||||||
Total Assets Acquired | 540,208,000 | |||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||
Deferred revenue and acquisition-related intangible liabilities | 22,940,000 | [4] | ||||||||||||||||||||||
Secured debt | 30,997,000 | [5] | ||||||||||||||||||||||
Accounts payable, accrued expenses, and other liabilities | 4,515,000 | |||||||||||||||||||||||
Total liabilities assumed | 58,452,000 | |||||||||||||||||||||||
Net assets and liabilities acquired | 481,756,000 | [6] | ||||||||||||||||||||||
Office Properties [Member] | ||||||||||||||||||||||||
Acquired operating properties from unrelated third parties | ||||||||||||||||||||||||
Number of Buildings | 9 | |||||||||||||||||||||||
Office Properties [Member] | 601 108th Avenue N.E Bellevue, WA [Member] | ||||||||||||||||||||||||
Acquired operating properties from unrelated third parties | ||||||||||||||||||||||||
Date of Acquisition | June 3, 2011 | |||||||||||||||||||||||
Number of Buildings | 1 | |||||||||||||||||||||||
Rentable Square Feet | 488,470 | |||||||||||||||||||||||
Percentage Occupied | 88.10% | |||||||||||||||||||||||
Purchase Price | 215,000,000 | [1] | ||||||||||||||||||||||
Office Properties [Member] | 201 Third Street San Francisco CA [Member] | ||||||||||||||||||||||||
Acquired operating properties from unrelated third parties | ||||||||||||||||||||||||
Date of Acquisition | September 15, 2011 | [7] | ||||||||||||||||||||||
Number of Buildings | 1 | [7] | ||||||||||||||||||||||
Rentable Square Feet | 311,545 | [7] | ||||||||||||||||||||||
Percentage Occupied | 90.30% | [7] | ||||||||||||||||||||||
Purchase Price | 103,300,000 | [1],[7] | ||||||||||||||||||||||
Office Properties [Member] | 250 Brannan Street San Francisco, CA [Member] | ||||||||||||||||||||||||
Acquired operating properties from unrelated third parties | ||||||||||||||||||||||||
Date of Acquisition | January 28, 2011 | |||||||||||||||||||||||
Number of Buildings | 1 | |||||||||||||||||||||||
Rentable Square Feet | 92,948 | |||||||||||||||||||||||
Percentage Occupied | 100.00% | |||||||||||||||||||||||
Purchase Price | 33,000,000 | [1] | ||||||||||||||||||||||
Office Properties [Member] | 10210, 10220, and 1023 NE Points Drive; 3933 Lake Washington Boulevard NE Kirkland, WA [Member] | ||||||||||||||||||||||||
Acquired operating properties from unrelated third parties | ||||||||||||||||||||||||
Date of Acquisition | April 21, 2011 | [8] | ||||||||||||||||||||||
Number of Buildings | 4 | [8] | ||||||||||||||||||||||
Rentable Square Feet | 279,924 | [8] | ||||||||||||||||||||||
Percentage Occupied | 89.60% | [8] | ||||||||||||||||||||||
Purchase Price | 100,100,000 | [1],[8] | ||||||||||||||||||||||
Office Properties [Member] | 10770 Wateridge Circle San Diego, CA [Member] | ||||||||||||||||||||||||
Acquired operating properties from unrelated third parties | ||||||||||||||||||||||||
Date of Acquisition | May 12, 2011 | |||||||||||||||||||||||
Number of Buildings | 1 | |||||||||||||||||||||||
Rentable Square Feet | 174,310 | |||||||||||||||||||||||
Percentage Occupied | 97.50% | |||||||||||||||||||||||
Purchase Price | 32,700,000 | [1] | ||||||||||||||||||||||
Office Properties [Member] | 4040 Civic Center Drive San Rafael, CA [Member] | ||||||||||||||||||||||||
Acquired operating properties from unrelated third parties | ||||||||||||||||||||||||
Date of Acquisition | June 9, 2011 | |||||||||||||||||||||||
Number of Buildings | 1 | |||||||||||||||||||||||
Rentable Square Feet | 126,787 | |||||||||||||||||||||||
Percentage Occupied | 93.10% | |||||||||||||||||||||||
Purchase Price | 32,200,000 | [1] | ||||||||||||||||||||||
601 108th Avenue N.E Bellevue, WA [Member] | ||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||
Land | 0 | [10],[9] | ||||||||||||||||||||||
Buildings and improvements | 214,095,000 | [10],[2] | ||||||||||||||||||||||
Undeveloped Land | 0 | [10] | ||||||||||||||||||||||
Deferred leasing costs and acquisition-related intangible assets | 13,790,000 | [10] | ||||||||||||||||||||||
Total Assets Acquired | 227,885,000 | |||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||
Deferred revenue and acquisition-related intangible liabilities | 12,850,000 | [10] | ||||||||||||||||||||||
Secured debt | 0 | [10] | ||||||||||||||||||||||
Accounts payable, accrued expenses, and other liabilities | 2,380,000 | [10] | ||||||||||||||||||||||
Total liabilities assumed | 15,230,000 | [10] | ||||||||||||||||||||||
Net assets and liabilities acquired | 212,655,000 | [10],[6] | ||||||||||||||||||||||
201 Third Street San Francisco CA [Member] | ||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||
Land | 19,260,000 | [10] | ||||||||||||||||||||||
Buildings and improvements | 84,018,000 | [10],[2] | ||||||||||||||||||||||
Undeveloped Land | 0 | [10] | ||||||||||||||||||||||
Deferred leasing costs and acquisition-related intangible assets | 8,700,000 | [10] | ||||||||||||||||||||||
Total Assets Acquired | 111,978,000 | [10] | ||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||
Deferred revenue and acquisition-related intangible liabilities | 8,700,000 | [10] | ||||||||||||||||||||||
Secured debt | 0 | [10] | ||||||||||||||||||||||
Accounts payable, accrued expenses, and other liabilities | 76,000 | [10] | ||||||||||||||||||||||
Total liabilities assumed | 8,776,000 | [10] | ||||||||||||||||||||||
Net assets and liabilities acquired | 103,202,000 | [10],[6] | ||||||||||||||||||||||
All Other Acquisitions [Member] | ||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||
Land | 36,740,000 | [11] | ||||||||||||||||||||||
Buildings and improvements | 143,545,000 | [11],[2] | ||||||||||||||||||||||
Undeveloped Land | 2,560,000 | [11] | ||||||||||||||||||||||
Deferred leasing costs and acquisition-related intangible assets | 17,500,000 | [11] | ||||||||||||||||||||||
Total Assets Acquired | 200,345,000 | |||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||
Deferred revenue and acquisition-related intangible liabilities | 1,390,000 | [11] | ||||||||||||||||||||||
Secured debt | 30,997,000 | [11],[5] | ||||||||||||||||||||||
Accounts payable, accrued expenses, and other liabilities | 2,059,000 | [11] | ||||||||||||||||||||||
Total liabilities assumed | 34,446,000 | [11] | ||||||||||||||||||||||
Net assets and liabilities acquired | $ 165,899,000 | [11],[6] | ||||||||||||||||||||||
|
Partners' Capital of the Operating Partnership | 9 Months Ended |
---|---|
Sep. 30, 2011 | |
Partners' Capital Notes [Abstract] | |
Partners' Capital of the Operating Partnership | 8. Partners' Capital of the Operating Partnership Issuance of Common Units In April 2011, the Company completed an underwritten public offering of 6,037,500 shares of its common stock as discussed in Note 7. The net offering proceeds of approximately $221.0 million were contributed by the Company to the Operating Partnership in exchange for 6,037,500 common units. Common Units Outstanding The Company owned 58,464,412, 52,349,670, and 52,349,670 common units representing a 97.1%, 96.8%, and 96.8% common general partnership interest in the Operating Partnership as of September 30, 2011, December 31, 2010, and September 30, 2010, respectively. The remaining 2.9%, 3.2%, and 3.2% common limited partnership interest as of September 30, 2011, December 31, 2010, and September 30, 2010, respectively, was owned by non-affiliate investors and certain of our officers and directors in the form of noncontrolling common units. There were 1,718,131, 1,723,131, and 1,723,131 common units outstanding held by these investors, officers and directors as of September 30, 2011, December 31, 2010, and September 30, 2010, respectively. For a further discussion of the noncontrolling common units as of September 30, 2011 and December 31, 2010, please refer to Note 6. |
Pro Forma Results of the Company (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011
Material Acquisitions [Member] | Sep. 30, 2011
Material Acquisitions [Member] | Sep. 30, 2011
Material Acquisitions [Member] | ||||||||||||||
Pro forma Results of the Company | ||||||||||||||||||||
Revenues | $ 99,938 | [1] | $ 86,490 | [1] | $ 291,600 | [1] | $ 239,270 | [1] | ||||||||||||
Net income (loss) available to common stockholders | 11,692 | [1],[2],[3] | (1,284) | [1],[2],[3] | 9,896 | [1],[2],[3] | 2,692 | [1],[2],[3] | ||||||||||||
Net income (loss) available to common stockholders per share - basic | $ 0.19 | [1],[2],[3] | $ (0.03) | [1],[2],[3] | $ 0.16 | [1],[2],[3] | $ 0.04 | [1],[2],[3] | ||||||||||||
Net income (loss) available to common stockholders per share - diluted | $ 0.19 | [1],[2],[3] | $ (0.03) | [1],[2],[3] | $ 0.16 | [1],[2],[3] | $ 0.04 | [1],[2],[3] | ||||||||||||
Actual results for material acquisitions | ||||||||||||||||||||
Revenues | 6,481 | |||||||||||||||||||
Net loss | (31) | [4] | ||||||||||||||||||
Pro Forma Results of the Company (Textuals) [Abstract] | ||||||||||||||||||||
Purchase price for material acquistions as a percentage of the total purchase price of all acquisitions | 61.70% | 61.70% | 61.70% | |||||||||||||||||
Acquisition-related expenses | $ 1,163 | $ 354 | $ 2,829 | $ 1,624 | $ 400 | $ 600 | ||||||||||||||
|
Document and Entity Information | 9 Months Ended | |
---|---|---|
Sep. 30, 2011 | Nov. 01, 2011 | |
Entity Registrant Name | KILROY REALTY CORP | |
Entity Central Index Key | 0001025996 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2011 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2011 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --12-31 | |
Entity Well-known Seasoned Issuer | Yes | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 58,464,412 | |
Kilroy Realty, L.P. [Member] | ||
Entity Registrant Name | Kilroy Realty, L.P. | |
Entity Central Index Key | 0001493976 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2011 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2011 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --12-31 | |
Entity Well-known Seasoned Issuer | Yes | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer |
Net Income (Loss) Available to Common Unitholders Per Unit of the Operating Partnership (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income Available To Common Unitholders [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income (loss) available to common unitholders | The following table reconciles the numerator and denominator in computing the Company's basic and diluted per-share computations for net income (loss) available to common stockholders for the three and nine months ended September 30, 2011 and 2010:
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Kilroy Realty, L.P. [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income Available To Common Unitholders [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income (loss) available to common unitholders | The following table reconciles the numerator and denominator in computing the Operating Partnership's basic and diluted per-unit computations for net income (loss) available to common unitholders for the three and nine months ended September 30, 2011 and 2010:
|
Commitments and Contingencies | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | 11. Commitments and Contingencies Ground Leases We have noncancellable ground lease obligations at one building in Bellevue, Washington which expires in November 2093 and at Kilroy Airport Center Phases I, II, and III in Long Beach, California which expires in July 2084. The minimum commitment under our ground leases as of September 30, 2011 for five years and thereafter was as follows:
________________________
Non-refundable Escrow Deposits As of September 30, 2011, we had $11.0 million in non-refundable escrow deposits, subject only to the failure of satisfaction of conditions precedent to the closing. The escrow deposits are related to potential future acquisitions, which are included in prepaid expenses and other assets, net on the consolidated balance sheets. These potential future acquisitions are currently anticipated to close in 2011 and are subject to customary closing conditions. |
Net Income (Loss) Available to Common Stockholders Per Share of the Company (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income (loss) available to common stockholders | The following table reconciles the numerator and denominator in computing the Company's basic and diluted per-share computations for net income (loss) available to common stockholders for the three and nine months ended September 30, 2011 and 2010:
|
Net Income (Loss) Available to Common Stockholders Per Share of the Company (Details) (USD $) In Thousands, except Share data | 3 Months Ended | 9 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | |||||||
Numerator: | ||||||||||
Income from continuing operations | $ 1,427 | $ 3,319 | $ 9,021 | $ 13,491 | ||||||
Loss (income) from continuing operations attributable to noncontrolling common units of the Operating Partnership | 67 | 15 | 65 | (94) | ||||||
Preferred distributions and dividends | (3,799) | (3,799) | (11,397) | (11,397) | ||||||
Allocation to participating securities (nonvested shares and RSUs) | (330) | (273) | (979) | (877) | ||||||
Numerator for basic and diluted (loss) income from continuing operations available to common stockholders | (2,635) | (738) | (3,290) | 1,123 | ||||||
Income from discontinued operations | 12,863 | [1] | 350 | [1] | 13,608 | [1] | 1,011 | [1] | ||
Income from discontinued operations attributable to noncontrolling common units of the Operating Partnership | (363) | (11) | (385) | (34) | ||||||
Numerator for basic and diluted net income (loss) available to common stockholders | $ 9,865 | $ (399) | $ 9,933 | $ 2,100 | ||||||
Denominator: | ||||||||||
Weighted average common shares outstanding-basic (Note 15) | 58,355,127 | 52,274,316 | 56,136,477 | 48,561,614 | ||||||
Effect of dilutive securities - Exchangeable Notes and stock options | 0 | 0 | 0 | 3,414 | ||||||
Weighted average common shares outstanding-diluted | 58,355,127 | 52,274,316 | 56,136,477 | 48,565,028 | ||||||
Basic earnings per share: | ||||||||||
(Loss) income from continuing operations available to common stockholders per common share-basic | $ (0.05) | $ (0.01) | $ (0.06) | $ 0.02 | ||||||
Income from discontinued operations per common share | $ 0.22 | $ 0.00 | $ 0.24 | $ 0.02 | ||||||
Net (loss) income available to common stockholders per share-basic (Note 15) | $ 0.17 | $ (0.01) | $ 0.18 | $ 0.04 | ||||||
Diluted earnings per share: | ||||||||||
(Loss) income from continuing operations available to common stockholders per common share-diluted | $ (0.05) | $ (0.01) | $ (0.06) | $ 0.02 | ||||||
Income from discontinued operations per common share | $ 0.22 | $ 0.00 | $ 0.24 | $ 0.02 | ||||||
Net (loss) income available to common stockholders per share-diluted (Note 15) | $ 0.17 | $ (0.01) | $ 0.18 | $ 0.04 | ||||||
|
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Consolidated Statements of Capital (KILROY REALTY, L.P.) (Kilroy Realty, L.P. [Member], USD $) In Thousands, except Share data | 9 Months Ended | 9 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011
Total Partners Capital [Member] | Sep. 30, 2010
Total Partners Capital [Member] | Sep. 30, 2011
Partners Capital Preferred Units [Member] | Dec. 31, 2010
Partners Capital Preferred Units [Member] | Sep. 30, 2010
Partners Capital Preferred Units [Member] | Dec. 31, 2009
Partners Capital Preferred Units [Member] | Sep. 30, 2011
Partners Capital Common Unit [Member] | Sep. 30, 2010
Partners Capital Common Unit [Member] | Sep. 30, 2011
Noncontrolling Interest In Consolidated Subsidiaries [Member] | Sep. 30, 2010
Noncontrolling Interest In Consolidated Subsidiaries [Member] | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Beginning Balance | $ 1,117,730 | $ 883,838 | $ 1,116,093 | $ 882,338 | $ 121,582 | $ 121,582 | $ 121,582 | $ 121,582 | $ 994,511 | $ 760,756 | $ 1,637 | $ 1,500 |
Beginning Balance units | 54,072,801 | 44,871,893 | ||||||||||
Net income | 22,629 | 14,502 | 22,534 | 14,364 | 22,534 | 14,364 | 95 | 138 | ||||
Issuance of common units (Note 8) | 221,015 | 299,847 | 221,015 | 299,847 | 221,015 | 299,847 | ||||||
Issuance of common units, units (Note 8) | 6,037,500 | 9,200,000 | ||||||||||
Issuance of share-based compensation awards (Note 9) | 2,447 | 1,904 | 2,447 | 1,904 | 2,447 | 1,904 | ||||||
Issuance of share-based compensation awards, units (Note 9) | 68,727 | 3,239 | ||||||||||
Noncash amortization of share-based compensation | 4,201 | 5,050 | 4,201 | 5,050 | 4,201 | 5,050 | ||||||
Exercise of stock options | 395 | 83 | 395 | 83 | 395 | 83 | ||||||
Exercise of stock options, units | 15,000 | 4,000 | ||||||||||
Repurchase of common units and restricted stock units (Note 9) | (736) | (2,121) | (736) | (2,121) | (736) | (2,121) | ||||||
Repurchase of common units and restricted stock units, units (Note 9) | (11,485) | (59,782) | ||||||||||
Settlement of restricted stock units for shares of common stock | (1,296) | (1,296) | (1,296) | |||||||||
Settlement of restricted stock units for shares of common stock units | 53,451 | |||||||||||
Allocation to the equity component of cash paid upon repurchase of 3.25% Exchangeable Notes | (2,694) | (2,694) | (2,694) | |||||||||
Other | 0 | 0 | 20 | 26 | 20 | 26 | (20) | (26) | ||||
Preferred distributions and dividends | (11,397) | (11,397) | (11,397) | (11,397) | (11,397) | (11,397) | ||||||
Distributions declared per common unit ($1.05 per unit) | (61,941) | (54,280) | (61,941) | (54,280) | (61,941) | (54,280) | ||||||
Ending Balance | $ 1,294,343 | $ 1,133,436 | $ 1,292,631 | $ 1,131,824 | $ 121,582 | $ 121,582 | $ 121,582 | $ 121,582 | $ 1,171,049 | $ 1,010,242 | $ 1,712 | $ 1,612 |
Ending Balance units | 60,182,543 | 54,072,801 |
Fair Value Measurements and Disclosures | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements and Disclosures | 12. Fair Value Measurements and Disclosures Assets and Liabilities Reported at Fair Value The only assets and liabilities we record at fair value on our consolidated financial statements are the marketable securities and related deferred compensation plan liability, both of which are related to our deferred compensation plan. The following table sets forth the fair value of our marketable securities and related deferred compensation plan liability as of September 30, 2011 and December 31, 2010:
________________________
We report the change in the fair value of the marketable securities at the end of each accounting period in interest income and other net investment gains in the consolidated statements of operations. We adjust the deferred compensation plan liability to fair value at the end of each accounting period based on the performance of the benchmark funds selected by each participant, which results in a corresponding increase or decrease to compensation cost for the period. The following table sets forth the related amounts recorded during the three and nine months ended September 30, 2011 and 2010:
Financial Instruments Disclosed at Fair Value The following table sets forth the carrying value and the fair value of our other financial instruments as of September 30, 2011 and December 31, 2010:
________________________ (1) As of September 30, 2011, there were no outstanding borrowings on the Credit Facility. |
Commitments and Contingencies (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of minimum commitment | The minimum commitment under our ground leases as of September 30, 2011 for five years and thereafter was as follows:
________________________
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Deferred Leasing Costs and Acquisition-related Intangible Assets and Liabilities, net (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of identified deferred leasing costs and acquisition-related intangible assets | The following table summarizes our deferred leasing costs and acquisition-related intangible assets (acquired value of leasing costs, above-market leases, and in-place leases) and intangible liabilities (acquired value of below-market leases and above-market ground lease) as of September 30, 2011 and December 31, 2010:
________________________
(2) Included in deferred revenue and acquisition-related intangible liabilities, net in the consolidated balance sheets. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amortization for the period related to deferred leasing costs and acquisition-related intangibles | The following table sets forth amortization related to deferred leasing costs and acquisition-related intangibles for the three and nine months ended September 30, 2011 and 2010:
_________________________ (1) The amortization of deferred leasing costs and in-place leases is recorded to depreciation and amortization expense in the consolidated statements of operations for the periods presented. (2) The amortization of net above-market leases is recorded as a decrease to rental income in the consolidated statements of operations for the periods presented. (3) The amortization of the above-market ground lease obligation is recorded as a decrease to ground lease expense in the consolidated statements of operations for the periods presented. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Estimated annual amortization related to deferred leasing costs and acquisition-related intangibles | The following table sets forth the estimated annual amortization expense related to deferred leasing costs and acquisition-related intangibles as of September 30, 2011 for future periods:
_______________________
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Future Minimum Rent | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Future Minimum Rent | 10. Future Minimum Rent We have operating leases with tenants that expire at various dates through 2031 and are either subject to scheduled fixed increases or adjustments in rent based on the Consumer Price Index. Generally, the leases grant tenants renewal options. Leases also provide for additional rents based on certain operating expenses. Future contractual minimum rent under operating leases as of September 30, 2011 for future periods is summarized as follows:
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Acquisitions | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions | 2. Acquisitions During the nine months ended September 30, 2011, we acquired the nine office properties listed below from unrelated third parties. Unless otherwise noted, we funded these acquisitions principally with the net proceeds from the public offering of common stock (see Note 7) the Company completed in April 2011, borrowings under the unsecured line of credit (see Note 5), and the net proceeds from the public offering of unsecured senior notes (see Note 5) the Operating Partnership completed in July 2011.
________________________ (1) Excludes acquisition-related costs. (2) In connection with this acquisition, we assumed secured debt with an outstanding principal balance of $30.0 million and recorded a premium of $1.0 million in connection with recording this debt at fair value on the acquisition date (see Note 5).
The related assets, liabilities, and results of operations of all acquired properties are included in the consolidated financial statements as of the date of acquisition. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the respective acquisition dates:
________________________
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Consolidated Statements of Cash Flows (Unaudited) (Parenthetical) (USD $) In Thousands | 9 Months Ended | |
---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | |
SUPPLEMENTAL CASH FLOWS INFORMATION: | ||
Interest Paid, Capitalized | $ 5,361 | $ 6,140 |
Organization and Basis of Presentation (Policies) | 9 Months Ended |
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Sep. 30, 2011 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Consolidation variable interest entities | The consolidated financial statements of the Company include the consolidated financial position and results of operations of the Company, the Operating Partnership, the Finance Partnership, KSLLC, and all of our wholly-owned subsidiaries. The consolidated financial statements of the Operating Partnership include the consolidated financial position and results of operations of the Operating Partnership, the Finance Partnership, KSLLC, and all wholly-owned subsidiaries of the Operating Partnership. All intercompany balances and transactions have been eliminated in the consolidated financial statements. The consolidated financial statements of the Company and the Operating Partnership also include two variable interest entities ("VIE") in which we are deemed to be the primary beneficiary. |
Segment reporting | Our chief operating decision-makers internally evaluate the operating performance and financial results of our portfolio based on Net Operating Income for the following two segments of commercial real estate property: Office Properties and Industrial Properties. We define “Net Operating Income” as operating revenues (rental income, tenant reimbursements, and other property income) less operating expenses (property expenses, real estate taxes, provision for bad debts, and ground leases). During the three and nine months ended September 30, 2011, the amount of revenues and Net Operating Income generated by our Industrial Properties, in relation to our total consolidated operating portfolio revenues and Net Operating Income fell below the required 10% quantitative reporting thresholds for the Industrial Properties to be considered a reportable segment under GAAP. Therefore, for the three and nine months ended September 30, 2011, our only reportable segment is our Office Properties segment. See Note 13 for a reconciliation of our Office Properties segment to our consolidated revenues, Net Operating Income, net income and consolidated assets. |
Consolidated Statements of Cash Flows (KILROY REALTY, L.P.) (USD $) In Thousands | 9 Months Ended | |
---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 22,629 | $ 14,502 |
Adjustments to reconcile net income to net cash provided by operating activities (including discontinued operations): | ||
Depreciation and amortization of building and improvements and leasing costs | 96,971 | 74,049 |
Increase (decrease) in provision for bad debts | 141 | (843) |
Depreciation of furniture, fixtures and equipment | 839 | 665 |
Noncash amortization of share-based compensation awards | 3,365 | 5,328 |
Noncash amortization of deferred financing costs and debt discounts and premiums | 10,164 | 9,098 |
Noncash amortization of above/(below) market rents (Note 3) | 1,519 | 696 |
Net gain on dispositions of discontinued operations (Note 14) | (12,555) | 0 |
Loss on early extinguishment of debt | 0 | 4,564 |
Noncash amortization of deferred revenue related to tenant-funded tenant improvements | (7,005) | (7,108) |
Other | (630) | 0 |
Changes in operating assets and liabilities: | ||
Marketable securities | (311) | (1,029) |
Current receivables | (1,022) | (706) |
Deferred rent receivables | (15,543) | (8,441) |
Other deferred leasing costs | 535 | (2,516) |
Prepaid expenses and other assets | (3,528) | (2,765) |
Accounts payable, accrued expenses and other liabilities | 18,914 | 3,049 |
Deferred revenue | (598) | 5,546 |
Rents received in advance and tenant security deposits | 180 | 839 |
Net cash provided by operating activities | 114,065 | 94,928 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Expenditures for acquisition of operating properties (Note 2) | (481,756) | (373,574) |
Expenditures for operating properties | (41,087) | (56,393) |
Expenditures for development and redevelopment properties and undeveloped land | (18,682) | (14,681) |
Net increase in escrow deposits | (11,000) | (2,002) |
(Increase) decrease in restricted cash | (690) | 1,316 |
Receipt of principal payments on note receivable | 0 | 10,679 |
Net cash used in investing activities | (553,215) | (434,655) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Borrowings on unsecured line of credit | 302,000 | 553,000 |
Repayments on unsecured line of credit | (461,000) | (445,000) |
Principal payments on secured debt | (5,295) | (101,653) |
Repurchase of exchangeable senior notes | 0 | (151,097) |
Proceeds from issuance of secured debt (Note 5) | 135,000 | 71,000 |
Proceeds from issuance of unsecured debt (Note 5) | 324,476 | 247,870 |
Repayments of unsecured debt | 0 | 61,000 |
Financing costs | (8,584) | (11,200) |
Decrease in loan deposits and other | 2,859 | 1,420 |
Repurchase of common stock and restricted stock units | (736) | (3,417) |
Proceeds from exercise of stock options | 395 | 83 |
Distributions paid to common unitholders | (58,942) | (50,299) |
Distributions paid to preferred unitholders | (11,397) | (11,397) |
Net cash provided by financing activities | 439,791 | 338,157 |
Net increase (decrease) in cash and cash equivalents | 641 | (1,570) |
Cash and cash equivalents, beginning of period | 14,840 | 9,883 |
Cash and cash equivalents, end of period | 15,481 | 8,313 |
SUPPLEMENTAL CASH FLOWS INFORMATION: | ||
Cash paid for interest, net of capitalized interest of $5,361 and $6,140 as of September 30, 2011 and 2010, respectively | 42,070 | 26,182 |
NONCASH INVESTING TRANSACTIONS: | ||
Accrual for expenditures for operating properties and development and redevelopment properties | 13,506 | 13,614 |
Tenant improvements funded directly by tenants to third parties | 3,037 | 2,520 |
Assumption of secured debt with property acquisition (Notes 2 and 5) | 30,042 | 51,079 |
Assumption of other liabilities with property acquisitions (Note 2) | 4,515 | 6,369 |
Net proceeds from disposition held by a qualified intermediary in connection wtih Section 1031 exchange (Note 14) | 23,285 | 0 |
NONCASH FINANCING TRANSACTIONS: | ||
Accrual of distributions payable to common unitholders | 21,064 | 18,925 |
Accrual of distributions payable to preferred unitholders | 1,909 | 1,909 |
Issuance of share-based compensation awards (Note 9) | 7,505 | 5,418 |
Kilroy Realty, L.P. [Member] | ||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | 22,629 | 14,502 |
Adjustments to reconcile net income to net cash provided by operating activities (including discontinued operations): | ||
Depreciation and amortization of building and improvements and leasing costs | 96,971 | 74,049 |
Increase (decrease) in provision for bad debts | 141 | (843) |
Depreciation of furniture, fixtures and equipment | 839 | 665 |
Noncash amortization of share-based compensation awards | 3,365 | 5,328 |
Noncash amortization of deferred financing costs and debt discounts and premiums | 10,164 | 9,098 |
Noncash amortization of above/(below) market rents (Note 3) | 1,519 | 696 |
Net gain on dispositions of discontinued operations (Note 14) | (12,555) | 0 |
Loss on early extinguishment of debt | 0 | 4,564 |
Noncash amortization of deferred revenue related to tenant-funded tenant improvements | (7,005) | (7,108) |
Other | (630) | 0 |
Changes in operating assets and liabilities: | ||
Marketable securities | (311) | (1,029) |
Current receivables | (1,022) | (706) |
Deferred rent receivables | (15,543) | (8,441) |
Other deferred leasing costs | 535 | (2,516) |
Prepaid expenses and other assets | (3,528) | (2,765) |
Accounts payable, accrued expenses and other liabilities | 18,914 | 3,049 |
Deferred revenue | (598) | 5,546 |
Rents received in advance and tenant security deposits | 180 | 839 |
Net cash provided by operating activities | 114,065 | 94,928 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Expenditures for acquisition of operating properties (Note 2) | (481,756) | (373,574) |
Expenditures for operating properties | (41,087) | (56,393) |
Expenditures for development and redevelopment properties and undeveloped land | (18,682) | (14,681) |
Net increase in escrow deposits | (11,000) | (2,002) |
(Increase) decrease in restricted cash | (690) | 1,316 |
Receipt of principal payments on note receivable | 0 | 10,679 |
Net cash used in investing activities | (553,215) | (434,655) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Net proceeds from issuance of common units (Note 8) | 221,015 | 299,847 |
Borrowings on unsecured line of credit | 302,000 | 553,000 |
Repayments on unsecured line of credit | (461,000) | (445,000) |
Principal payments on secured debt | (5,295) | (101,653) |
Repurchase of exchangeable senior notes | 0 | (151,097) |
Proceeds from issuance of secured debt (Note 5) | 135,000 | 71,000 |
Proceeds from issuance of unsecured debt (Note 5) | 324,476 | 247,870 |
Repayments of unsecured debt | 0 | (61,000) |
Financing costs | (8,584) | (11,200) |
Decrease in loan deposits and other | 2,859 | 1,420 |
Repurchase of common stock and restricted stock units | (736) | (3,417) |
Proceeds from exercise of stock options | 395 | 83 |
Distributions paid to common unitholders | (58,942) | (50,299) |
Distributions paid to preferred unitholders | (11,397) | (11,397) |
Net cash provided by financing activities | 439,791 | 338,157 |
Net increase (decrease) in cash and cash equivalents | 641 | (1,570) |
Cash and cash equivalents, beginning of period | 14,840 | 9,883 |
Cash and cash equivalents, end of period | 15,481 | 8,313 |
SUPPLEMENTAL CASH FLOWS INFORMATION: | ||
Cash paid for interest, net of capitalized interest of $5,361 and $6,140 as of September 30, 2011 and 2010, respectively | 42,070 | 26,182 |
NONCASH INVESTING TRANSACTIONS: | ||
Accrual for expenditures for operating properties and development and redevelopment properties | 13,506 | 13,614 |
Tenant improvements funded directly by tenants to third parties | 3,037 | 2,520 |
Assumption of secured debt with property acquisition (Notes 2 and 5) | 30,042 | 51,079 |
Assumption of other liabilities with property acquisitions (Note 2) | 4,515 | 6,369 |
Net proceeds from disposition held by a qualified intermediary in connection wtih Section 1031 exchange (Note 14) | 23,285 | 0 |
NONCASH FINANCING TRANSACTIONS: | ||
Accrual of distributions payable to common unitholders | 21,064 | 18,925 |
Accrual of distributions payable to preferred unitholders | 1,909 | 1,909 |
Issuance of share-based compensation awards (Note 9) | $ 7,505 | $ 5,418 |
Receivables | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables | 4. Receivables Current Receivables, net Current receivables, net is primarily comprised of contractual rents and other lease-related obligations due from tenants. The balance consisted of the following as of September 30, 2011 and December 31, 2010:
Deferred Rent Receivables, net Deferred rent receivables, net consisted of the following as of September 30, 2011 and December 31, 2010:
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Fair Value Measurements and Disclosures (Details 1) (USD $) In Thousands | Sep. 30, 2011 | Dec. 31, 2010 | |||
---|---|---|---|---|---|
Liabilities | |||||
Secured Debt | $ 473,997 | $ 313,009 | |||
Exchangeable notes | 305,115 | 299,964 | |||
Unsecured senior notes | 980,487 | 655,803 | |||
Credit Facility | 0 | 159,000 | |||
Carrying Value [Member] | |||||
Liabilities | |||||
Secured Debt | 473,997 | 313,009 | |||
Exchangeable notes | 305,115 | 299,964 | |||
Unsecured senior notes | 980,487 | 655,803 | |||
Credit Facility | 0 | [1] | 159,000 | ||
Fair Value [Member] | |||||
Liabilities | |||||
Secured Debt | 487,807 | 329,456 | |||
Exchangeable notes | 321,183 | 312,598 | |||
Unsecured senior notes | 1,014,863 | 661,644 | |||
Credit Facility | $ 0 | $ 159,659 | |||
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Consolidated Statements of Cash Fiows (Kilroy Realty, L.P.) (Parenthetical) (USD $) In Thousands | 9 Months Ended | |
---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | |
SUPPLEMENTAL CASH FLOWS INFORMATION: | ||
Interest Paid, Capitalized | $ 5,361 | $ 6,140 |
Kilroy Realty, L.P. [Member] | ||
SUPPLEMENTAL CASH FLOWS INFORMATION: | ||
Interest Paid, Capitalized | $ 5,361 | $ 6,140 |
Subsequent Events | 3 Months Ended |
---|---|
Sep. 30, 2011 | |
Subsequent Events [Abstract] | |
Subsequent Events | 17. Subsequent Events On October 11, 2011, we used borrowings under the Credit Facility to repay a secured mortgage loan with an outstanding principal balance of $68.7 million that was scheduled to mature in December 2011. On October 17, 2011, aggregate dividends, distributions, and dividend equivalents of $21.4 million were paid to common stockholders and common unitholders of record on September 30, 2011 and RSU holders of record on October 17, 2011. On October 25, 2011, we paid $25.0 million as a non-refundable escrow deposit, subject only to the failure of satisfaction of conditions precedent to the closing, related to a potential future acquisition. The acquisition is currently anticipated to close in 2011 and is subject to customary closing conditions. On November 1, 2011, we used borrowings under the Credit Facility to repay a secured mortgage loan with an outstanding principal balance of $52.0 million that was scheduled to mature in April 2012 . As of the date of this report, we have outstanding borrowings of $165.0 million under our Credit Facility that were primarily used to fund the repayment of debt and a non-refundable escrow deposit as noted above. |
Consolidated Statements of Capital (KILROY REALTY, L.P.) (Parenthetical) (USD $) | 9 Months Ended | |
---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | |
Stated coupon rate | 3.25% | |
Kilroy Realty, L.P. [Member] | ||
Stated coupon rate | 3.25% | |
Distributions declared per common unit | $ 1.05 | $ 1.05 |
Organization and Basis of Presentation (Details Textuals) (USD $) In Millions, unless otherwise specified | 3 Months Ended | 9 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Sep. 30, 2011
NumberofBuildings
Share_Based_Incentive_Compensation_Plans | Sep. 30, 2011
NumberofTradingDays
Years
RSF
NumberofBuildings
Share_Based_Incentive_Compensation_Plans | Dec. 31, 2010 | Sep. 30, 2010 | |||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||||||||
Number of properties of the company in Washington | 6 | 6 | ||||||
Number of Buildings | 9 | 9 | ||||||
Cost of Buildings | $ 516.3 | [1] | $ 516.3 | [1] | ||||
Stabilized Occupancy | 95.00% | |||||||
Percentage of general partnership interest owned by the company in the Operating Partnership | 97.10% | 97.10% | 96.80% | 96.80% | ||||
Percentage of Common limited partnership interest owned by certain non-affiliated investors and certain directors and officers of the Company in the Operating Partnership | 2.90% | 2.90% | 3.20% | 3.20% | ||||
Percentage of General partnership interest owned by wholly-owned subsidiary of the Company | 1.00% | 1.00% | ||||||
Percentage of limited partnership interest owned by Operating Partnership | 99.00% | 99.00% | ||||||
Number of consolidated variable interest entities | 2 | 2 | ||||||
Number of days to complete Section 1031 Exchange | 180 | |||||||
Variable Interest Entity, Consolidated, Carrying Amount, Assets | 164.0 | 164.0 | ||||||
Variable Interest Entity, Consolidated, Carrying Amount, Liabilities | $ 63 | $ 63 | ||||||
Threshhold limits for segment reporting | 10.00% | |||||||
Kilroy Realty Northside Drive, LLC [Member] | ||||||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||||||||
Number of Buildings | 3 | 3 | ||||||
Office Properties [Member] | ||||||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||||||||
Number of Buildings | 9 | 9 | ||||||
Redevelopment Properties [Member] | ||||||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||||||||
Number of Buildings | 3 | 3 | ||||||
Rentable Square Feet | 508,000 | 508,000 | ||||||
Properties Under Repositioning [Member] | ||||||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||||||||
Number of Buildings | 1 | 1 | ||||||
Properties Commenced Redevelopment During the Period [Member] | ||||||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||||||||
Number of Buildings | 2 | 2 | ||||||
Lease Up Properties [Member] | ||||||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||||||||
Number of Buildings | 0 | 0 | ||||||
|
Consolidated Statements of Equity (Unaudited) (Parenthetical) (USD $) | 3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | |
Stated coupon rate | 3.25% | 3.25% | ||
Dividends declared, per common share and common unit | $ 0.35 | $ 0.35 | $ 1.05 | $ 1.05 |
Consolidated Balance Sheets (KILROY REALTY, L.P.) (USD $) In Thousands | Sep. 30, 2011 | Dec. 31, 2010 | |||||
---|---|---|---|---|---|---|---|
REAL ESTATE ASSETS: | |||||||
Land and improvements (Note 2) | $ 537,973 | $ 491,333 | |||||
Buildings and improvements (Note 2) | 2,881,504 | 2,435,173 | |||||
Undeveloped land and construction in progress (Note 1) | 328,785 | 290,365 | |||||
Total real estate held for investment | 3,748,262 | 3,216,871 | |||||
Accumulated depreciation and amortization | (732,162) | (672,429) | |||||
Total real estate assets, net | 3,016,100 | 2,544,442 | |||||
CASH AND CASH EQUIVALENTS | 15,481 | 14,840 | |||||
RESTRICTED CASH (Note 14) | 25,436 | 1,461 | |||||
MARKETABLE SECURITIES (Note 12) | 5,213 | 4,902 | |||||
CURRENT RECEIVABLES, NET (Note 4) | 6,860 | 6,258 | |||||
DEFERRED RENT RECEIVABLES, NET (Note 4) | 103,668 | 89,052 | |||||
DEFERRED LEASING COSTS AND ACQUISITION-RELATED INTANGIBLE ASSETS, NET (Notes 2 and 3) | 155,757 | [1] | 131,066 | ||||
DEFERRED FINANCING COSTS, NET (Note 5) | 19,638 | 16,447 | |||||
PREPAID EXPENSES AND OTHER ASSETS, NET (Note 11) | 19,531 | 8,097 | |||||
Total Assets | 3,367,684 | 2,816,565 | |||||
LIABILITIES: | |||||||
Secured debt, net (Notes 5 and 12) | 473,997 | 313,009 | |||||
Exchangeable senior notes, net (Notes 5 and 12) | 305,115 | 299,964 | |||||
Unsecured senior notes, net (Notes 5 and 12) | 980,487 | 655,803 | |||||
Unsecured line of credit (Notes 5 and 12) | 0 | 159,000 | |||||
Accounts payable, accrued expenses and other liabilities | 93,050 | 68,525 | |||||
Accrued distributions (Note 16) | 22,565 | 20,385 | |||||
Deferred revenue and acquisition-related intangible liabilities, net (Note 3) | 95,120 | 79,322 | |||||
Rents received in advance and tenant security deposits | 29,369 | 29,189 | |||||
Total liabilities | 1,999,703 | 1,625,197 | |||||
COMMITMENTS AND CONTINGENCIES (Note 11) | |||||||
7.45% SERIES A CUMULATIVE REDEEMABLE PREFERRED UNITS | 73,638 | 73,638 | |||||
Partners' Capital (Note 8): | |||||||
TOTAL LIABILITIES, NONCONTROLLING INTEREST AND EQUITY/CAPITAL | 3,367,684 | 2,816,565 | |||||
Kilroy Realty, L.P. [Member] | |||||||
REAL ESTATE ASSETS: | |||||||
Land and improvements (Note 2) | 537,973 | 491,333 | |||||
Buildings and improvements (Note 2) | 2,881,504 | 2,435,173 | |||||
Undeveloped land and construction in progress (Note 1) | 328,785 | 290,365 | |||||
Total real estate held for investment | 3,748,262 | 3,216,871 | |||||
Accumulated depreciation and amortization | (732,162) | (672,429) | |||||
Total real estate assets, net | 3,016,100 | 2,544,442 | |||||
CASH AND CASH EQUIVALENTS | 15,481 | 14,840 | |||||
RESTRICTED CASH (Note 14) | 25,436 | 1,461 | |||||
MARKETABLE SECURITIES (Note 12) | 5,213 | 4,902 | |||||
CURRENT RECEIVABLES, NET (Note 4) | 6,860 | 6,258 | |||||
DEFERRED RENT RECEIVABLES, NET (Note 4) | 103,668 | 89,052 | |||||
DEFERRED LEASING COSTS AND ACQUISITION-RELATED INTANGIBLE ASSETS, NET (Notes 2 and 3) | 155,757 | 131,066 | |||||
DEFERRED FINANCING COSTS, NET (Note 5) | 19,638 | 16,447 | |||||
PREPAID EXPENSES AND OTHER ASSETS, NET (Note 11) | 19,531 | 8,097 | |||||
Total Assets | 3,367,684 | 2,816,565 | |||||
LIABILITIES: | |||||||
Secured debt, net (Notes 5 and 12) | 473,997 | 313,009 | |||||
Exchangeable senior notes, net (Notes 5 and 12) | 305,115 | 299,964 | |||||
Unsecured senior notes, net (Notes 5 and 12) | 980,487 | 655,803 | |||||
Unsecured line of credit (Notes 5 and 12) | 0 | [2] | 159,000 | ||||
Accounts payable, accrued expenses and other liabilities | 93,050 | 68,525 | |||||
Accrued distributions (Note 16) | 22,565 | 20,385 | |||||
Deferred revenue and acquisition-related intangible liabilities, net (Note 3) | 95,120 | 79,322 | |||||
Rents received in advance and tenant security deposits | 29,369 | 29,189 | |||||
Total liabilities | 1,999,703 | 1,625,197 | |||||
COMMITMENTS AND CONTINGENCIES (Note 11) | |||||||
7.45% SERIES A CUMULATIVE REDEEMABLE PREFERRED UNITS | 73,638 | 73,638 | |||||
Partners' Capital (Note 8): | |||||||
Common units, 58,464,412 and 52,349,670 held by the general partner and 1,718,131 and 1,723,131 held by common limited partners issued and outstanding, respectively | 1,171,049 | 994,511 | |||||
Total Partners' Capital | 1,292,631 | 1,116,093 | |||||
Noncontrolling interests in consolidated subsidiaries | 1,712 | 1,637 | |||||
Total capital | 1,294,343 | 1,117,730 | |||||
TOTAL LIABILITIES, NONCONTROLLING INTEREST AND EQUITY/CAPITAL | 3,367,684 | 2,816,565 | |||||
Kilroy Realty, L.P. [Member] | Series E Cumulative Redeemable Preferred Stock | |||||||
Partners' Capital (Note 8): | |||||||
Cumulative Redeemable Preferred stock | 38,425 | 38,425 | |||||
Kilroy Realty, L.P. [Member] | Series F Cumulative Redeemable Preferred Stock | |||||||
Partners' Capital (Note 8): | |||||||
Cumulative Redeemable Preferred stock | 83,157 | 83,157 | |||||
Series E Cumulative Redeemable Preferred Stock | |||||||
Partners' Capital (Note 8): | |||||||
Cumulative Redeemable Preferred stock | 38,425 | 38,425 | |||||
Series F Cumulative Redeemable Preferred Stock | |||||||
Partners' Capital (Note 8): | |||||||
Cumulative Redeemable Preferred stock | $ 83,157 | $ 83,157 | |||||
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Secured and Unsecured Debt of the Operating Partnership (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance and significant terms of the exchangeable notes outstanding | The following table summarizes the balance and significant terms of the Company's 3.25% Exchangeable Notes due 2012 (the "3.25% Exchangeable Notes") and 4.25% Exchangeable Notes due 2014 (the "4.25% Exchangeable Notes" and together with the 3.25% Exchangeable Notes, the "Exchangeable Notes") outstanding as of September 30, 2011 and December 31, 2010:
_____________________
represents our conventional debt borrowing rate at the date of issuance.
common dividends. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Capped call Transactions | The following table summarizes our capped call option positions as of both September 30, 2011 and December 31, 2010:
________________________
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Interest expense for the exchangeable notes | The following table summarizes the total interest expense attributable to the Exchangeable Notes based on the effective interest rates set forth above, before the effect of capitalized interest, for the three and nine months ended September 30, 2011 and 2010:
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Terms of the Credit Facility | . The following table summarizes the terms of our Credit Facility as of December 31, 2010 and as amended as of September 30, 2011:
________________________ (1) As of September 30, 2011, there were no borrowings outstanding on the Credit Facility. (2) We may elect to borrow, subject to lender approval, up to an additional $200 million under an accordion feature under the terms of the Credit Facility. (3) The Credit Facility interest rate was calculated based on an annual rate of LIBOR plus 1.750% and 2.675% as of September 30, 2011 and December 31, 2010, respectively. No interest rate is shown as of September 30, 2011 because no borrowings were outstanding. (4) The facility fee is paid on a quarterly basis and is calculated based on the total borrowing capacity. In addition to the facility fee, we also incurred debt origination and legal costs of approximately $5.0 million when we entered into the Credit Facility in 2010 and an additional $3.3 million when we amended the Credit Facility in 2011. The unamortized balance of these costs will be amortized as additional interest expense over the extended term of the Credit Facility. (5) Under the original and amended terms of the Credit Facility, we may exercise an option to extend the maturity date by one year. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stated debt maturities and scheduled amortization payments, excluding debt discounts | The following table summarizes the stated debt maturities and scheduled amortization payments, excluding debt discounts and premiums, as of September 30, 2011:
________________________
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Capitalized interest and loan fees | The following table sets forth our gross interest expense, including debt discount/premium and loan cost amortization, net of capitalized interest, for the three and nine months ended September 30, 2011 and 2010. The capitalized amounts are a cost of development and redevelopment, and increase the carrying value of undeveloped land and construction in progress.
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Net Income (Loss) Available to Common Unitholders Per Unit of the Operating Partnership | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Earnings Per Unit [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net (Loss) Income Available to Common Unitholders per Unit of the Operating Partnership | 16. Net Income (Loss) Available to Common Unitholders Per Unit of the Operating Partnership The following table reconciles the numerator and denominator in computing the Operating Partnership's basic and diluted per-unit computations for net income (loss) available to common unitholders for the three and nine months ended September 30, 2011 and 2010:
The impact of the Exchangeable Notes and stock options was not considered in our diluted earnings per unit calculation for the three and nine months ended September 30, 2011 and the three months ended September 30, 2010 since the Operating Partnership had losses from continuing operations attributable to common unitholders in the respective periods and the effect was anti-dilutive. The impact of the Exchangeable Notes was not included in our diluted earnings per unit calculation for the nine months ended September 30, 2010 because the average trading price of the Company's common stock on the NYSE was below the respective Exchangeable Notes exchange price for the period. As a result, these instruments were not considered to be dilutive for the purposes of our diluted earnings per unit calculation for this period. |
Receivables (Details) (USD $) In Thousands | Sep. 30, 2011 | Dec. 31, 2010 |
---|---|---|
Current Receivables, net | ||
Current receivables | $ 10,001 | $ 9,077 |
Allowance for uncollectible tenant receivables | (3,141) | (2,819) |
Current receivables, net | 6,860 | 6,258 |
Deferred Rent Receivables, net | ||
Deferred rent receivables | 107,130 | 92,883 |
Allowance for deferred rent receivables | (3,462) | (3,831) |
Deferred rent receivables, net | $ 103,668 | $ 89,052 |
Secured and Unsecured Debt of the Operating Partnership (Details 1) (USD $) In Thousands, unless otherwise specified | 9 Months Ended | 12 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2011 | Dec. 31, 2010 | Sep. 30, 2011
Kilroy Realty, L.P. [Member] | Dec. 31, 2010
Kilroy Realty, L.P. [Member] | Sep. 30, 2011
Kilroy Realty, L.P. [Member]
Exchangeable Notes [Member] | Sep. 30, 2010
Kilroy Realty, L.P. [Member]
Exchangeable Notes [Member] | Sep. 30, 2011
Kilroy Realty, L.P. [Member]
Exchangeable Notes [Member] | Sep. 30, 2010
Kilroy Realty, L.P. [Member]
Exchangeable Notes [Member] | |||||||||||||
Interest Expense for the Exchangeable Notes | ||||||||||||||||||||
Contractual interest payments | $ 3,035 | $ 3,035 | $ 9,106 | $ 11,530 | ||||||||||||||||
Amortization of discount | 1,742 | 1,818 | 5,151 | 6,497 | ||||||||||||||||
Interest expense attributable to the Exchangeable Notes | 4,777 | 4,853 | 14,257 | 18,027 | ||||||||||||||||
Terms of the Credit Facility | ||||||||||||||||||||
Credit Facility | 0 | 159,000 | 0 | [1] | 159,000 | |||||||||||||||
Remaining borrowing capacity | 500,000 | 341,000 | ||||||||||||||||||
Total borrowing capacity | $ 500,000 | [2] | $ 500,000 | [2] | ||||||||||||||||
Interest rate | [3] | 2.99% | [3] | |||||||||||||||||
Facility fee - annual rate | 0.35% | [4] | 0.575% | [4] | ||||||||||||||||
Maturity date | August 2015 | [5] | August 2013 | [5] | ||||||||||||||||
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Organization and Basis of Presentation (Details) | Sep. 30, 2011
NumberofBuildings
Share_Based_Incentive_Compensation_Plans | |||
---|---|---|---|---|
Summary of stabilized portfolio of operating properties | ||||
Number of Buildings | 9 | |||
Stabilized Portfolio [Member] | ||||
Summary of stabilized portfolio of operating properties | ||||
Number of Buildings | 145 | |||
Rentable square feet | 15,179,651 | |||
Number of Tenants | 486 | |||
Percentage Occupied | 92.80% | |||
Stabilized Portfolio [Member] | Office Properties [Member] | ||||
Summary of stabilized portfolio of operating properties | ||||
Number of Buildings | 105 | [1] | ||
Rentable square feet | 11,574,244 | [1] | ||
Number of Tenants | 422 | [1] | ||
Percentage Occupied | 90.60% | [1] | ||
Stabilized Portfolio [Member] | Industrial Properties [Member] | ||||
Summary of stabilized portfolio of operating properties | ||||
Number of Buildings | 40 | |||
Rentable square feet | 3,605,407 | |||
Number of Tenants | 64 | |||
Percentage Occupied | 100.00% | |||
Office Properties [Member] | ||||
Summary of stabilized portfolio of operating properties | ||||
Number of Buildings | 9 | |||
|
Stockholders' Equity of the Company (Details) (USD $) | 3 Months Ended | 9 Months Ended | |
---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2011 | Sep. 30, 2010 | |
Stockholders' Equity of the Company [Abstract] | |||
Proceeds from Issuance of Common Stock | $ 221,015,000 | $ 299,847,000 | |
At Market Stock Offering Program Aggregate Value Of Common Stock | $ 200,000,000 | ||
Common Stock [Member] | |||
Stockholders' Equity of the Company [Abstract] | |||
Underwriting public offering of common stock, shares | 6,037,500 | 9,200,000 |
Consolidated Balance Sheets (KILROY REALTY, L.P.) (Parenthetical) (Kilroy Realty, L.P. [Member], USD $) In Thousands, except Share data, unless otherwise specified | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|---|
Sep. 30, 2011 | Dec. 31, 2010 | Sep. 30, 2011
Series E Cumulative Redeemable Preferred Stock | Dec. 31, 2010
Series E Cumulative Redeemable Preferred Stock | Sep. 30, 2011
Series F Cumulative Redeemable Preferred Stock | Dec. 31, 2010
Series F Cumulative Redeemable Preferred Stock | |
Partners' Capital (Note 8): | ||||||
General partner, units issued | 58,464,412 | 52,349,670 | ||||
General partners, units outstanding | 58,464,412 | 52,349,670 | ||||
Limited partners, units issued | 1,718,131 | 1,723,131 | ||||
Limited partnership units outstanding | 1,718,131 | 1,723,131 | ||||
Preferred stock, shares issued | 1,610,000 | 1,610,000 | 3,450,000 | 3,450,000 | ||
Preferred stock, shares outstanding | 1,610,000 | 1,610,000 | 3,450,000 | 3,450,000 | ||
Preferred stock dividend rate percentage | 7.80% | 7.80% | 7.50% | 7.50% | ||
Preferred Stock Liquidation preference | $ 40,250 | $ 40,250 | $ 86,250 | $ 86,250 |
Property Dispositions Reported as Discontinued Operations Property Dispositions Reported as Discontinued Operations (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2011
NumberofBuildings
Share_Based_Incentive_Compensation_Plans | Sep. 30, 2010 | Sep. 30, 2011
NumberofTradingDays
Years
RSF
NumberofBuildings
Share_Based_Incentive_Compensation_Plans | Sep. 30, 2010 | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||
Number of Buildings | 9 | 9 | ||||||||
Rental income | $ 89,306,000 | $ 72,135,000 | $ 252,102,000 | $ 196,883,000 | ||||||
Tenant reimbursements | 7,683,000 | 6,156,000 | 21,469,000 | 18,261,000 | ||||||
Property expenses | 19,361,000 | 15,802,000 | 54,548,000 | 42,255,000 | ||||||
Real estate taxes | 8,360,000 | 7,582,000 | 24,878,000 | 20,035,000 | ||||||
Depreciation and amortization | 36,152,000 | 29,951,000 | 97,513,000 | 74,405,000 | ||||||
Income from discontinued operations before net gain on dispositions of discontinued operations | 308,000 | 350,000 | 1,053,000 | 1,011,000 | ||||||
Net gain on dispositions of discontinued operations | 12,555,000 | 0 | 12,555,000 | 0 | ||||||
Total income from discontinued operations | 12,863,000 | [1] | 350,000 | [1] | 13,608,000 | [1] | 1,011,000 | [1] | ||
Net proceeds from disposition held by a qualified intermediary in connection wtih Section 1031 exchange | 23,285,000 | 0 | ||||||||
Total Property Dispositions [Member] | ||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||
Rental income | 413,000 | 473,000 | 1,359,000 | 1,419,000 | ||||||
Tenant reimbursements | 56,000 | 55,000 | 202,000 | 151,000 | ||||||
Total revenues | 469,000 | 528,000 | 1,561,000 | 1,570,000 | ||||||
Property expenses | 33,000 | 43,000 | 118,000 | 153,000 | ||||||
Real estate taxes | 29,000 | 32,000 | 93,000 | 97,000 | ||||||
Depreciation and amortization | 99,000 | 103,000 | 297,000 | 309,000 | ||||||
Total expenses | 161,000 | 178,000 | 508,000 | 559,000 | ||||||
Income from discontinued operations before net gain on dispositions of discontinued operations | 308,000 | 350,000 | 1,053,000 | 1,011,000 | ||||||
Net gain on dispositions of discontinued operations | 12,555,000 | 0 | 12,555,000 | 0 | ||||||
Total income from discontinued operations | 12,863,000 | 350,000 | 13,608,000 | 1,011,000 | ||||||
Barnes Canyon Pacific Heights Drive Disposition [Member] | ||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||
Property Type | Office | |||||||||
Month of Disposition | September | September | ||||||||
Number of Buildings | 2 | 2 | ||||||||
Rentable Square Feet | 90,558 | 90,558 | ||||||||
Sales Price | 23,900,000 | |||||||||
Net proceeds from disposition held by a qualified intermediary in connection wtih Section 1031 exchange | $ 23,285,000 | |||||||||
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Future Minimum Rent (Tables) | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Future contractual minimum rent under operating lease | Future contractual minimum rent under operating leases as of September 30, 2011 for future periods is summarized as follows:
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Segment Disclosure | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Disclosure | 13. Segment Disclosure We have one reportable segment which is our Office Properties segment and we have one non-reportable segment which is our Industrial Properties segment. We also have certain corporate level activities including legal administration, accounting, finance, management information systems, and acquisitions, which are not considered separate operating segments. We evaluate the performance of our segments based upon Net Operating Income. “Net Operating Income” is defined as operating revenues (rental income, tenant reimbursements, and other property income) less property and related expenses (property expenses, real estate taxes, ground leases, and provisions for bad debts) and excludes other non-property related income and expenses such as interest income and interest expense, depreciation and amortization, acquisition-related expenses and corporate general and administrative expenses. There is no intersegment activity. The following tables reconcile our reportable segment activity to our consolidated net income for the three and nine months ended September 30, 2011 and 2010 and the assets by segment to the consolidated assets as of September 30, 2011 and December 31, 2010:
________________________
________________________
|
Share-Based Compensation (Details) (Restricted Stock [Member], USD $) In Thousands, except Share data | 9 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | |||||||
Restricted Stock [Member] | ||||||||
Summary of Nonvested Shares | ||||||||
Outstanding at January 1, 2011 , Shares | 50,032 | |||||||
Outstanding at January 1, 2011, Weighted Average Grant Date Fair Value Per Share | $ 58.40 | |||||||
Granted, Non-Vested Shares | 68,727 | 3,239 | ||||||
Granted, Weighted Average Grant Date Fair Value Per Share | $ 37.83 | $ 30.88 | ||||||
Vested, Shares | (9,474) | [1] | (16,358) | |||||
Vested, Weighted Average Grant Date Fair Value Per Share | $ 56.76 | |||||||
Outstanding as of September 30, 2011, Shares | 109,285 | |||||||
Outstanding as of September 30, 2011, Weighted Average Grant Date Fair Value Per Share | $ 45.61 | |||||||
Summary of Granted and Vested Shares | ||||||||
Granted, Non-Vested Shares | 68,727 | 3,239 | ||||||
Granted, Weighted Average Grant Date Fair Value Per Share | $ 37.83 | $ 30.88 | ||||||
Vested, Shares | (9,474) | [1] | (16,358) | |||||
Vested shares, total fair value | $ 370 | [2] | $ 474 | [2] | ||||
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Net Income (Loss) Available to Common Unitholders Per Unit of the Operating Partnership (Details) (USD $) In Thousands, except Share data | 3 Months Ended | 9 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | |||||||
Numerator: | ||||||||||
Income from continuing operations | $ 1,427 | $ 3,319 | $ 9,021 | $ 13,491 | ||||||
Preferred distributions | (3,799) | (3,799) | (11,397) | (11,397) | ||||||
Allocation to participating securities (nonvested units and RSUs) | (330) | (273) | (979) | (877) | ||||||
Numerator for basic and diluted (loss) income from continuing operations available to common unitholders | (2,635) | (738) | (3,290) | 1,123 | ||||||
Income from discontinued operations | 12,863 | [1] | 350 | [1] | 13,608 | [1] | 1,011 | [1] | ||
Numerator for basic and diluted net income (loss) available to common unitholders | 9,865 | (399) | 9,933 | 2,100 | ||||||
Denominator: | ||||||||||
Weighted average common units outstanding - basic (Note 16) | 58,355,127 | 52,274,316 | 56,136,477 | 48,561,614 | ||||||
Effect of dilutive securities - Exchangeable Notes and stock options | 0 | 0 | 0 | 3,414 | ||||||
Weighted average common units outstanding - diluted (Note 16) | 58,355,127 | 52,274,316 | 56,136,477 | 48,565,028 | ||||||
Basic earnings per unit: | ||||||||||
(Loss) income from continuing operations available to common unitholders per common unit-basic | $ (0.05) | $ (0.01) | $ (0.06) | $ 0.02 | ||||||
Income from discontinued operations per common unit | $ 0.22 | $ 0.00 | $ 0.24 | $ 0.02 | ||||||
Net income (loss) available to common unitholders per unit-basic | $ 0.17 | $ (0.01) | $ 0.18 | $ 0.04 | ||||||
Diluted earnings per unit: | ||||||||||
(Loss) income from continuing operations available to common unitholders per common unit-diluted | $ (0.05) | $ (0.01) | $ (0.06) | $ 0.02 | ||||||
Income from discontinued operations per common unit | $ 0.22 | $ 0.00 | $ 0.24 | $ 0.02 | ||||||
Net income (loss) available to common unitholders per unit-diluted | $ 0.17 | $ (0.01) | $ 0.18 | $ 0.04 | ||||||
Kilroy Realty, L.P. [Member] | ||||||||||
Numerator: | ||||||||||
Income from continuing operations | 1,427 | 3,319 | 9,021 | 13,491 | ||||||
Income from continuing operations attributable to noncontrolling interests in consolidated subsidiaries | (30) | (41) | (95) | (138) | ||||||
Preferred distributions | (3,799) | (3,799) | (11,397) | (11,397) | ||||||
Allocation to participating securities (nonvested units and RSUs) | (330) | (273) | (979) | (877) | ||||||
Numerator for basic and diluted (loss) income from continuing operations available to common unitholders | (2,732) | (794) | (3,450) | 1,079 | ||||||
Income from discontinued operations | 12,863 | 350 | 13,608 | 1,011 | ||||||
Numerator for basic and diluted net income (loss) available to common unitholders | $ 10,131 | $ (444) | $ 10,158 | $ 2,090 | ||||||
Denominator: | ||||||||||
Weighted average common units outstanding - basic (Note 16) | 60,073,258 | 53,997,447 | 57,857,538 | 50,284,745 | ||||||
Effect of dilutive securities - Exchangeable Notes and stock options | 0 | 0 | 0 | 3,414 | ||||||
Weighted average common units outstanding - diluted (Note 16) | 60,073,258 | 53,997,447 | 57,857,538 | 50,288,159 | ||||||
Basic earnings per unit: | ||||||||||
(Loss) income from continuing operations available to common unitholders per common unit-basic | $ (0.05) | $ (0.01) | $ (0.06) | $ 0.02 | ||||||
Income from discontinued operations per common unit | $ 0.22 | $ 0.00 | $ 0.24 | $ 0.02 | ||||||
Net income (loss) available to common unitholders per unit-basic | $ 0.17 | $ (0.01) | $ 0.18 | $ 0.04 | ||||||
Diluted earnings per unit: | ||||||||||
(Loss) income from continuing operations available to common unitholders per common unit-diluted | $ (0.05) | $ (0.01) | $ (0.06) | $ 0.02 | ||||||
Income from discontinued operations per common unit | $ 0.22 | $ 0.00 | $ 0.24 | $ 0.02 | ||||||
Net income (loss) available to common unitholders per unit-diluted | $ 0.17 | $ (0.01) | $ 0.18 | $ 0.04 | ||||||
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Secured and Unsecured Debt of the Operating Partnership (Details 3) (USD $) | 9 Months Ended | 9 Months Ended | 12 Months Ended | 1 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | 1 Months Ended | |||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2011
NumberofTradingDays
Years
RSF
NumberofBuildings
Share_Based_Incentive_Compensation_Plans | Sep. 30, 2010 | Apr. 30, 2011
Kilroy Realty, L.P. [Member]
Drive Lake Washington Boulevard Kirkland Member
4.94% Mortgage Payable due April 15, 2015 [Member]
NumberofBuildings | Sep. 30, 2011
Kilroy Realty, L.P. [Member] | Dec. 31, 2010
Kilroy Realty, L.P. [Member] | Sep. 30, 2010
Kilroy Realty, L.P. [Member] | Apr. 30, 2011
Kilroy Realty, L.P. [Member]
4.94% Mortgage Payable due April 15, 2015 [Member]
Years | Sep. 30, 2011
Kilroy Realty, L.P. [Member]
3.25% Exchangeable Notes [Member] | Dec. 31, 2010
Kilroy Realty, L.P. [Member]
3.25% Exchangeable Notes [Member] | Sep. 30, 2011
Kilroy Realty, L.P. [Member]
4.25% Exchangeable Notes [Member] | Dec. 31, 2010
Kilroy Realty, L.P. [Member]
4.25% Exchangeable Notes [Member] | Sep. 30, 2011
Kilroy Realty, L.P. [Member]
New Amendment to Credit Facility [Member] | Dec. 31, 2010
Kilroy Realty, L.P. [Member]
Prior Credit Facility [Member] | Jan. 31, 2011
Kilroy Realty, L.P. [Member]
4.27% Mortgage Payable due Feb 1, 2018 [Member]
Years | Jul. 31, 2011
Kilroy Realty, L.P. [Member]
4.80% Unsecured Senior Notes due July 15, 2018 [Member] | ||||||||||||||||
Secured and Unsecured Debt of the Operating Partnership (Textuals) (Abstract) | ||||||||||||||||||||||||||||||
Principal amount of secured debt | $ 30,000,000 | $ 135,000,000 | $ 325,000,000 | |||||||||||||||||||||||||||
Maturity Date | Apr. 15, 2015 | Apr. 15, 2012 | Apr. 15, 2012 | Nov. 15, 2014 | Nov. 15, 2014 | Feb. 01, 2018 | Jul. 15, 2018 | |||||||||||||||||||||||
Stated coupon rate | 3.25% | 3.25% | 4.94% | 3.25% | [1] | 3.25% | [1] | 4.25% | [2] | 4.25% | [2] | 4.27% | 4.80% | |||||||||||||||||
Debt Amortization Period in Number of Years | 30 | 30 | ||||||||||||||||||||||||||||
Number of Buildings | 9 | 4 | ||||||||||||||||||||||||||||
Debt premium | 1,000,000 | |||||||||||||||||||||||||||||
Debt discount | 1,714,000 | 4,004,000 | 13,671,000 | 16,532,000 | 505,000 | |||||||||||||||||||||||||
Debt Instrument, Interest Rate, Effective Percentage | 4.00% | 5.45% | [3] | 5.45% | [3] | 7.13% | [3] | 7.13% | [3] | 4.83% | ||||||||||||||||||||
Average Trading Price Of The Companys Stock | $ 37.92 | |||||||||||||||||||||||||||||
Debt Instrument, Convertible, Conversion Price | $ 88 | [4] | $ 88 | [4] | $ 35.93 | [4] | $ 35.93 | [4] | ||||||||||||||||||||||
Fair value of the shares upon conversion if Exchangeable Notes were converted on specified date | 180,400,000 | |||||||||||||||||||||||||||||
Principal amount | 1,776,900,000 | [5] | 148,000,000 | 148,000,000 | 172,500,000 | 172,500,000 | ||||||||||||||||||||||||
Amount by which fair value of the shares upon conversion exceeds principal amount of the Exchangeable Notes on the specified date | 7,900,000 | |||||||||||||||||||||||||||||
Additional line of credit under Credit Facility | 200,000,000 | |||||||||||||||||||||||||||||
Credit facility spread | 1.75% | 2.675% | ||||||||||||||||||||||||||||
Amount Incurred In Debt Origination And Legal Costs | $ 3,300,000 | $ 5,000,000 | ||||||||||||||||||||||||||||
Line of Credit Facility Maturity Extension | 1 year | 1 year | ||||||||||||||||||||||||||||
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Pro Forma Results of the Company | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pro Forma Results of the Company | 18. Pro Forma Results of the Company The following pro forma consolidated results of operations of the Company for the three and nine months ended September 30, 2011 and 2010 assumes that the acquisitions of 601 108th Avenue N.E., Bellevue, WA, and 201 Third Street, San Francisco, CA, were completed as of January 1, 2010. Pro forma data may not be indicative of the results that would have been reported had the acquisitions actually occurred as of January 1, 2010, nor does it intend to be a projection of future results.
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The following table summarizes the results of operations for the properties at 601 108th Avenue N.E., Bellevue, WA, and 201 Third Street, San Francisco, CA, from June 3, 2011 and September 15, 2011, the dates of acquisition, respectively, through September 30, 2011:
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Share-Based Compensation (Tables) | 9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of nonvested shares | A summary of our nonvested shares activity from January 1, 2011 through September 30, 2011 is presented below:
________________________
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Summary of nonvested and vested shares | A summary of our nonvested and vested shares activity for the nine months ended September 30, 2011 and 2010 is presented below:
(1) Total fair value of shares vested was calculated based on the quoted closing share price of the Company's common stock on the NYSE on the day of vesting. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Restricted Stock Units | A summary of our restricted stock unit ("RSU") activity from January 1, 2011 through September 30, 2011 is presented below:
________________________
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Summary of Nonvested and Vested Restricted Stock Units | A summary of our RSU activity for the nine months ended September 30, 2011 and 2010 is presented below:
_______________________ (1) Total fair value of RSUs vested was calculated based on the quoted closing share price of the Company's common stock on the NYSE on the day of vesting. |
Net Income (Loss) Available to Common Stockholders Per Share of the Company | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net (Loss) Income Available to Common Stockholders Per Share of the Company | 15. Net Income (Loss) Available to Common Stockholders Per Share of the Company The following table reconciles the numerator and denominator in computing the Company's basic and diluted per-share computations for net income (loss) available to common stockholders for the three and nine months ended September 30, 2011 and 2010:
The impact of the Exchangeable Notes and stock options was not considered in our diluted earnings per share calculation for the three and nine months ended September 30, 2011 and the three months ended September 30, 2010 since the Company had losses from continuing operations attributable to common stockholders in the respective periods and the effect was anti-dilutive. The impact of the Exchangeable Notes was not included in our diluted earnings per share calculation for the nine months ended September 30, 2010 because the average trading price of the Company's common stock on the NYSE was below the respective Exchangeable Notes exchange price for the period. As a result, these instruments were not considered to be dilutive for the purposes of our diluted earnings per share calculation for this period. |
Deferred Leasing Costs and Acquisition-related Intangible Assets and Liabilities, net | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Leasing Costs and Acquisition-related Intangible Assets and Liabilities, net | 3. Deferred Leasing Costs and Acquisition-related Intangible Assets and Liabilities, net The following table summarizes our deferred leasing costs and acquisition-related intangible assets (acquired value of leasing costs, above-market leases, and in-place leases) and intangible liabilities (acquired value of below-market leases and above-market ground lease) as of September 30, 2011 and December 31, 2010:
________________________
(2) Included in deferred revenue and acquisition-related intangible liabilities, net in the consolidated balance sheets. The following table sets forth amortization related to deferred leasing costs and acquisition-related intangibles for the three and nine months ended September 30, 2011 and 2010:
_________________________ (1) The amortization of deferred leasing costs and in-place leases is recorded to depreciation and amortization expense in the consolidated statements of operations for the periods presented. (2) The amortization of net above-market leases is recorded as a decrease to rental income in the consolidated statements of operations for the periods presented. (3) The amortization of the above-market ground lease obligation is recorded as a decrease to ground lease expense in the consolidated statements of operations for the periods presented. The following table sets forth the estimated annual amortization expense related to deferred leasing costs and acquisition-related intangibles as of September 30, 2011 for future periods:
_______________________
|
Deferred Leasing Costs and Acquisition-related Intangible Assets and Liabilities, net (Details 1) (USD $) In Thousands | 3 Months Ended | 9 Months Ended | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | |||||||||||||
Amortization for the period related to deferred leasing costs and acquisition-related intangibles | ||||||||||||||||
Amortization for the period related to deferred leasing costs and acquisition-related intangibles | $ 7,833 | $ 5,770 | $ 21,831 | $ 11,760 | ||||||||||||
Deferred Leasing Costs [Member] | ||||||||||||||||
Amortization for the period related to deferred leasing costs and acquisition-related intangibles | ||||||||||||||||
Amortization for the period related to deferred leasing costs and acquisition-related intangibles | 4,317 | [1] | 3,886 | [1] | 12,053 | [1] | 9,559 | [1] | ||||||||
Estimated annual amortization related to acquisition-related intangibles | ||||||||||||||||
Remaining 2011 | 4,748 | |||||||||||||||
2012 | 17,689 | |||||||||||||||
2013 | 15,823 | |||||||||||||||
2014 | 13,796 | |||||||||||||||
2015 | 10,387 | |||||||||||||||
Thereafter | 25,641 | |||||||||||||||
Total | 88,084 | |||||||||||||||
Net Above (Below)-Market Leases [Member] | ||||||||||||||||
Amortization for the period related to deferred leasing costs and acquisition-related intangibles | ||||||||||||||||
Amortization for the period related to deferred leasing costs and acquisition-related intangibles | 121 | [2] | 664 | [2] | 1,519 | [2] | 696 | [2] | ||||||||
Estimated annual amortization related to acquisition-related intangibles | ||||||||||||||||
Remaining 2011 | (78) | [3] | ||||||||||||||
2012 | (1,534) | [3] | ||||||||||||||
2013 | (1,690) | [3] | ||||||||||||||
2014 | (1,339) | [3] | ||||||||||||||
2015 | (790) | [3] | ||||||||||||||
Thereafter | (4,684) | [3] | ||||||||||||||
Total | (10,115) | [3] | ||||||||||||||
In-Place Leases [Member] | ||||||||||||||||
Amortization for the period related to deferred leasing costs and acquisition-related intangibles | ||||||||||||||||
Amortization for the period related to deferred leasing costs and acquisition-related intangibles | 3,379 | [1] | 1,220 | [1] | 8,238 | [1] | 1,505 | [1] | ||||||||
Estimated annual amortization related to acquisition-related intangibles | ||||||||||||||||
Remaining 2011 | 3,643 | |||||||||||||||
2012 | 12,863 | |||||||||||||||
2013 | 10,578 | |||||||||||||||
2014 | 7,830 | |||||||||||||||
2015 | 4,366 | |||||||||||||||
Thereafter | 6,500 | |||||||||||||||
Total | 45,780 | |||||||||||||||
Above-Market Ground Lease Obligation [Member] | ||||||||||||||||
Amortization for the period related to deferred leasing costs and acquisition-related intangibles | ||||||||||||||||
Amortization for the period related to deferred leasing costs and acquisition-related intangibles | 16 | [4] | 0 | [4] | 21 | [4] | 0 | [4] | ||||||||
Estimated annual amortization related to acquisition-related intangibles | ||||||||||||||||
Remaining 2011 | 16 | |||||||||||||||
2012 | 63 | |||||||||||||||
2013 | 63 | |||||||||||||||
2014 | 63 | |||||||||||||||
2015 | 63 | |||||||||||||||
Thereafter | 4,911 | |||||||||||||||
Total | $ 5,179 | |||||||||||||||
|
Pro Forma Results of the Operating Partnership (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011
Kilroy Realty, L.P. [Member]
Material Acquisitions [Member] | Sep. 30, 2011
Kilroy Realty, L.P. [Member]
Material Acquisitions [Member] | Sep. 30, 2011
Kilroy Realty, L.P. [Member]
Material Acquisitions [Member] | Sep. 30, 2011
Material Acquisitions [Member] | Sep. 30, 2011
Material Acquisitions [Member] | Sep. 30, 2011
Material Acquisitions [Member] | Sep. 30, 2011
Kilroy Realty, L.P. [Member] | Sep. 30, 2010
Kilroy Realty, L.P. [Member] | Sep. 30, 2011
Kilroy Realty, L.P. [Member] | Sep. 30, 2010
Kilroy Realty, L.P. [Member] | |||||||||||||||||||||
Pro Forma Results of the Operating Partnership | ||||||||||||||||||||||||||||||||||
Revenues | $ 99,938 | [1] | $ 86,490 | [1] | $ 291,600 | [1] | $ 239,270 | [1] | $ 99,938 | [1] | $ 86,490 | [1] | $ 291,600 | [1] | $ 239,270 | [1] | ||||||||||||||||||
Net income (loss) available to common unitholders | 11,692 | [1],[2],[3] | (1,284) | [1],[2],[3] | 9,896 | [1],[2],[3] | 2,692 | [1],[2],[3] | 12,001 | [1],[3],[4] | (1,367) | [1],[3],[4] | 10,090 | [1],[3],[4] | 2,672 | [1],[3],[4] | ||||||||||||||||||
Net income (loss) available to common unitholders per unit - basic | $ 0.19 | [1],[2],[3] | $ (0.03) | [1],[2],[3] | $ 0.16 | [1],[2],[3] | $ 0.04 | [1],[2],[3] | $ 0.19 | [1],[3],[4] | $ (0.03) | [1],[3],[4] | $ 0.16 | [1],[3],[4] | $ 0.04 | [1],[3],[4] | ||||||||||||||||||
Net income (loss) available to common unitholders per unit - diluted | $ 0.19 | [1],[2],[3] | $ (0.03) | [1],[2],[3] | $ 0.16 | [1],[2],[3] | $ 0.04 | [1],[2],[3] | $ 0.19 | [1],[3],[4] | $ (0.03) | [1],[3],[4] | $ 0.16 | [1],[3],[4] | $ 0.04 | [1],[3],[4] | ||||||||||||||||||
Actual results for material acquisitions | ||||||||||||||||||||||||||||||||||
Revenues | 6,481 | 6,481 | ||||||||||||||||||||||||||||||||
Net loss | (31) | [5] | (31) | [5] | ||||||||||||||||||||||||||||||
Pro Forma Results of the Operating Partnership (Textuals) [Abstract] | ||||||||||||||||||||||||||||||||||
Purchase price for material acquistions as a percentage of the total purchase price of all acquisitions | 61.70% | 61.70% | 61.70% | 61.70% | 61.70% | 61.70% | ||||||||||||||||||||||||||||
Acquisition-related expenses | $ 1,163 | $ 354 | $ 2,829 | $ 1,624 | $ 400 | $ 600 | $ 400 | $ 600 | $ 1,163 | $ 354 | $ 2,829 | $ 1,624 | ||||||||||||||||||||||
|
Segment Disclosure (Details) (USD $) In Thousands, unless otherwise specified | 3 Months Ended | 9 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | |||||||||
Consolidated net income | ||||||||||||
Operating revenues | $ 97,337 | [1] | $ 79,276 | [1] | $ 276,434 | [1] | $ 217,469 | [1] | ||||
Property and related expenses | 28,219 | 22,863 | 80,833 | 62,095 | ||||||||
Net Operating Income | 69,118 | 56,413 | 195,601 | 155,374 | ||||||||
Reconciliation to Consolidated Net Income: | ||||||||||||
Total Net Operating Income for segments | 69,118 | 56,413 | 195,601 | 155,374 | ||||||||
Unallocated Expenses Income [Abstract] | ||||||||||||
General and administrative expenses | (6,355) | (7,273) | (20,355) | (21,096) | ||||||||
Acquisition-related expenses | (1,163) | (354) | (2,829) | (1,624) | ||||||||
Depreciation and Amortization | (36,152) | (29,951) | (97,513) | (74,405) | ||||||||
Interest income and other net investment gains (Note 12) | 30 | 337 | 272 | 703 | ||||||||
Interest expense (Note 5) | (24,051) | (15,853) | (66,155) | (40,897) | ||||||||
Loss on early extinguishment of debt | 0 | 0 | 0 | (4,564) | ||||||||
INCOME FROM CONTINUING OPERATIONS | 1,427 | 3,319 | 9,021 | 13,491 | ||||||||
Total income from discontinued operations | 12,863 | [2] | 350 | [2] | 13,608 | [2] | 1,011 | [2] | ||||
Net income | 14,290 | 3,669 | 22,629 | 14,502 | ||||||||
Reportable Segment - Office Properties [Member] | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Business Segment | 1 | 1 | ||||||||||
Consolidated net income | ||||||||||||
Operating revenues | 89,754 | [1] | 71,646 | [1] | 254,041 | [1] | 194,923 | [1] | ||||
Property and related expenses | 26,709 | 21,091 | 74,199 | 56,678 | ||||||||
Net Operating Income | 63,045 | 50,555 | 179,842 | 138,245 | ||||||||
Reconciliation to Consolidated Net Income: | ||||||||||||
Total Net Operating Income for segments | 63,045 | 50,555 | 179,842 | 138,245 | ||||||||
Non-Reportable Segment - Industrial Properties [Member] | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Business Segment | 1 | 1 | ||||||||||
Consolidated net income | ||||||||||||
Operating revenues | 7,583 | [1] | 7,630 | [1] | 22,393 | [1] | 22,546 | [1] | ||||
Property and related expenses | 1,510 | 1,772 | 6,634 | 5,417 | ||||||||
Net Operating Income | 6,073 | 5,858 | 15,759 | 17,129 | ||||||||
Reconciliation to Consolidated Net Income: | ||||||||||||
Total Net Operating Income for segments | $ 6,073 | $ 5,858 | $ 15,759 | $ 17,129 | ||||||||
|
Secured and Unsecured Debt of the Operating Partnership (Details 2) (USD $) In Thousands | 3 Months Ended | 9 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | |||||
Capitalized interest and loan fees | ||||||||
Interest expense (Note 5) | $ 24,051 | $ 15,853 | $ 66,155 | $ 40,897 | ||||
Kilroy Realty, L.P. [Member] | ||||||||
Stated debt maturities and scheduled amortization payments, excluding debt discounts | ||||||||
Remaining 2011 | 70,371 | 70,371 | ||||||
2012 | 305,303 | 305,303 | ||||||
2013 | 6,373 | 6,373 | ||||||
2014 | 262,443 | 262,443 | ||||||
2015 | 357,382 | 357,382 | ||||||
Thereafter | 775,028 | 775,028 | ||||||
Total | 1,776,900 | [1] | 1,776,900 | [1] | ||||
Capitalized interest and loan fees | ||||||||
Gross interest expense | 26,449 | 18,543 | 72,597 | 48,980 | ||||
Capitalized interest | (2,398) | (2,690) | (6,442) | (8,083) | ||||
Interest expense (Note 5) | $ 24,051 | $ 15,853 | $ 66,155 | $ 40,897 | ||||
|
Consolidated Statements of Operations (KILROY REALTY, L.P.) (USD $) In Thousands, except Share data | 3 Months Ended | 9 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | |||||||||
REVENUES: | ||||||||||||
Rental income | $ 89,306 | $ 72,135 | $ 252,102 | $ 196,883 | ||||||||
Tenant reimbursements | 7,683 | 6,156 | 21,469 | 18,261 | ||||||||
Other property income | 348 | 985 | 2,863 | 2,325 | ||||||||
Total revenues | 97,337 | [1] | 79,276 | [1] | 276,434 | [1] | 217,469 | [1] | ||||
EXPENSES: | ||||||||||||
Property expenses | 19,361 | 15,802 | 54,548 | 42,255 | ||||||||
Real estate taxes | 8,360 | 7,582 | 24,878 | 20,035 | ||||||||
Provision for bad debts | (5) | (857) | 141 | (843) | ||||||||
Ground leases (Note 11) | 503 | 336 | 1,266 | 648 | ||||||||
General and administrative expenses | 6,355 | 7,273 | 20,355 | 21,096 | ||||||||
Acquisition-related expenses | 1,163 | 354 | 2,829 | 1,624 | ||||||||
Depreciation and amortization | 36,152 | 29,951 | 97,513 | 74,405 | ||||||||
Total expenses | 71,889 | 60,441 | 201,530 | 159,220 | ||||||||
OTHER (EXPENSES) INCOME: | ||||||||||||
Interest income and other net investment gains (Note 12) | 30 | 337 | 272 | 703 | ||||||||
Interest expense (Note 5) | (24,051) | (15,853) | (66,155) | (40,897) | ||||||||
Loss on early extinguishment of debt | 0 | 0 | 0 | (4,564) | ||||||||
Total other (expenses) income | (24,021) | (15,516) | (65,883) | (44,758) | ||||||||
INCOME FROM CONTINUING OPERATIONS | 1,427 | 3,319 | 9,021 | 13,491 | ||||||||
DISCONTINUED OPERATIONS (Note 14) | ||||||||||||
Net income from discontinued operations | 308 | 350 | 1,053 | 1,011 | ||||||||
Net gain on dispositions of discontinued operations | 12,555 | 0 | 12,555 | 0 | ||||||||
Total income from discontinued operations | 12,863 | [2] | 350 | [2] | 13,608 | [2] | 1,011 | [2] | ||||
NET INCOME | 14,290 | 3,669 | 22,629 | 14,502 | ||||||||
NET INCOME ATTRIBUTABLE TO KILROY REALTY, L.P. | 13,994 | 3,673 | 22,309 | 14,374 | ||||||||
Preferred distributions | (3,799) | (3,799) | (11,397) | (11,397) | ||||||||
NET INCOME (LOSS) AVAILABLE TO COMMON UNITHOLDERS | 10,195 | (126) | 10,912 | 2,977 | ||||||||
(Loss) income from continuing operations available to common unitholders per common unit-basic | $ (0.05) | $ (0.01) | $ (0.06) | $ 0.02 | ||||||||
(Loss) income from continuing operations available to common unitholders per common unit-diluted | $ (0.05) | $ (0.01) | $ (0.06) | $ 0.02 | ||||||||
Net income (loss) available to common unitholders per unit-basic | $ 0.17 | $ (0.01) | $ 0.18 | $ 0.04 | ||||||||
Net income (loss) available to common unitholders per unit-diluted | $ 0.17 | $ (0.01) | $ 0.18 | $ 0.04 | ||||||||
Weighted average common units outstanding - basic (Note 16) | 58,355,127 | 52,274,316 | 56,136,477 | 48,561,614 | ||||||||
Weighted average common units outstanding - diluted (Note 16) | 58,355,127 | 52,274,316 | 56,136,477 | 48,565,028 | ||||||||
Kilroy Realty, L.P. [Member] | ||||||||||||
REVENUES: | ||||||||||||
Rental income | 89,306 | 72,135 | 252,102 | 196,883 | ||||||||
Tenant reimbursements | 7,683 | 6,156 | 21,469 | 18,261 | ||||||||
Other property income | 348 | 985 | 2,863 | 2,325 | ||||||||
Total revenues | 97,337 | 79,276 | 276,434 | 217,469 | ||||||||
EXPENSES: | ||||||||||||
Property expenses | 19,361 | 15,802 | 54,548 | 42,255 | ||||||||
Real estate taxes | 8,360 | 7,582 | 24,878 | 20,035 | ||||||||
Provision for bad debts | (5) | (857) | 141 | (843) | ||||||||
Ground leases (Note 11) | 503 | 336 | 1,266 | 648 | ||||||||
General and administrative expenses | 6,355 | 7,273 | 20,355 | 21,096 | ||||||||
Acquisition-related expenses | 1,163 | 354 | 2,829 | 1,624 | ||||||||
Depreciation and amortization | 36,152 | 29,951 | 97,513 | 74,405 | ||||||||
Total expenses | 71,889 | 60,441 | 201,530 | 159,220 | ||||||||
OTHER (EXPENSES) INCOME: | ||||||||||||
Interest income and other net investment gains (Note 12) | 30 | 337 | 272 | 703 | ||||||||
Interest expense (Note 5) | (24,051) | (15,853) | (66,155) | (40,897) | ||||||||
Loss on early extinguishment of debt | 0 | 0 | 0 | (4,564) | ||||||||
Total other (expenses) income | (24,021) | (15,516) | (65,883) | (44,758) | ||||||||
INCOME FROM CONTINUING OPERATIONS | 1,427 | 3,319 | 9,021 | 13,491 | ||||||||
DISCONTINUED OPERATIONS (Note 14) | ||||||||||||
Net income from discontinued operations | 308 | 350 | 1,053 | 1,011 | ||||||||
Net gain on dispositions of discontinued operations | 12,555 | 0 | 12,555 | 0 | ||||||||
Total income from discontinued operations | 12,863 | 350 | 13,608 | 1,011 | ||||||||
NET INCOME | 14,290 | 3,669 | 22,629 | 14,502 | ||||||||
Net income attributable to noncontrolling interests in consolidated subsidiaries | (30) | (41) | (95) | (138) | ||||||||
NET INCOME ATTRIBUTABLE TO KILROY REALTY, L.P. | 14,260 | 3,628 | 22,534 | 14,364 | ||||||||
Preferred distributions | (3,799) | (3,799) | (11,397) | (11,397) | ||||||||
NET INCOME (LOSS) AVAILABLE TO COMMON UNITHOLDERS | $ 10,461 | $ (171) | $ 11,137 | $ 2,967 | ||||||||
(Loss) income from continuing operations available to common unitholders per common unit-basic | $ (0.05) | $ (0.01) | $ (0.06) | $ 0.02 | ||||||||
(Loss) income from continuing operations available to common unitholders per common unit-diluted | $ (0.05) | $ (0.01) | $ (0.06) | $ 0.02 | ||||||||
Net income (loss) available to common unitholders per unit-basic | $ 0.17 | $ (0.01) | $ 0.18 | $ 0.04 | ||||||||
Net income (loss) available to common unitholders per unit-diluted | $ 0.17 | $ (0.01) | $ 0.18 | $ 0.04 | ||||||||
Weighted average common units outstanding - basic (Note 16) | 60,073,258 | 53,997,447 | 57,857,538 | 50,284,745 | ||||||||
Weighted average common units outstanding - diluted (Note 16) | 60,073,258 | 53,997,447 | 57,857,538 | 50,288,159 | ||||||||
Distributions declared per common unit | $ 0.35 | $ 0.35 | $ 1.05 | $ 1.05 | ||||||||
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Noncontrolling Interests on the Company's Consolidated Financial Statements | 9 Months Ended |
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Sep. 30, 2011 | |
Noncontrolling Interest [Abstract] | |
Noncontrolling Interests on the Company's Consolidated Financial Statements | 6. Noncontrolling Interests on the Company's Consolidated Financial Statements 7.45% Series A Cumulative Redeemable Preferred Units of the Operating Partnership As of both September 30, 2011 and December 31, 2010, the Operating Partnership had outstanding 1,500,000 7.45% Series A Cumulative Redeemable Preferred Units representing preferred limited partnership interests in the Operating Partnership with a redemption value of $50.00 per unit. There were no changes to this noncontrolling interest during the three and nine months ended September 30, 2011 and 2010. Common Units of the Operating Partnership The Company owned a 97.1%, 96.8% and 96.8% common general partnership interest in the Operating Partnership as of September 30, 2011, December 31, 2010, and September 30, 2010, respectively. The remaining 2.9%, 3.2% and 3.2% common limited partnership interest as of September 30, 2011, December 31, 2010 and September 30, 2010, respectively, was owned in the form of common units by non-affiliate investors and certain of our officers and directors. There were 1,718,131, 1,723,131 and 1,723,131 common units outstanding held by these investors, officers and directors as of September 30, 2011, December 31, 2010 and September 30, 2010, respectively. The noncontrolling common units may be redeemed by unitholders for cash. We, at our option, may satisfy the cash redemption obligation with shares of the Company's common stock on a one-for-one basis. Whether satisfied in cash or shares of the Company's common stock, the value for each noncontrolling common unit upon redemption is the amount equal to the average of the closing quoted price per share of the Company's common stock, par value $.01 per share, as reported on the NYSE for the ten trading days immediately preceding the applicable redemption date. The aggregate value upon redemption of the then-outstanding noncontrolling common units was $56.2 million and $61.4 million as of September 30, 2011 and December 31, 2010, respectively. This redemption value does not necessarily represent the amount that would be distributed with respect to each common unit in the event of our termination or liquidation. In the event of our termination or liquidation, it is expected in most cases that each common unit would be entitled to a liquidating distribution equal to the amount payable with respect to each share of the Company's common stock. |
Partners' Capital of the Operating Partnership (Details) (USD $) In Thousands, except Share data, unless otherwise specified | 9 Months Ended | 12 Months Ended | |
---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Dec. 31, 2010 | |
Partners Capital of the Operating Partnership [Abstract] | |||
Net proceeds from issuance of common stock | $ 221,015 | $ 299,847 | |
Limited partnership units outstanding | 1,718,131 | 1,723,131 | 1,723,131 |
Kilroy Realty, L.P. [Member] | |||
Partners Capital of the Operating Partnership [Abstract] | |||
Common units in Operating Partnership held by the Company, the general partner | 58,464,412 | 52,349,670 | 52,349,670 |
Common general partnership interest in operating partnership | 97.10% | 96.80% | 96.80% |
Common limited partnership interest in the operating partnership | 2.90% | 3.20% | 3.20% |
Limited partnership units outstanding | 1,718,131 | 1,723,131 | 1,723,131 |
Kilroy Realty, L.P. [Member] | Partners Capital Common Unit [Member] | |||
Partners Capital of the Operating Partnership [Abstract] | |||
Issuance of common units, units (Note 8) | 6,037,500 | 9,200,000 | |
Common Stock [Member] | |||
Partners Capital of the Operating Partnership [Abstract] | |||
Underwriting public offering of common stock, shares | 6,037,500 | 9,200,000 |
Noncontrolling Interests on the Company's Consolidated Financial Statements (Details) (USD $) | 9 Months Ended | ||
---|---|---|---|
Sep. 30, 2011
NumberofTradingDays
Years
RSF
NumberofBuildings
Share_Based_Incentive_Compensation_Plans | Dec. 31, 2010 | Sep. 30, 2010 | |
Noncontrolling Interest (Textuals) [Abstract] | |||
Percentage of general partnership interest owned by the company in the Operating Partnership | 97.10% | 96.80% | 96.80% |
Percentage of Common limited partnership interest owned by certain non-affiliated investors and certain directors and officers of the Company in the Operating Partnership | 2.90% | 3.20% | 3.20% |
Common units outstanding held by common limited partners | 1,718,131 | 1,723,131 | 1,723,131 |
Conversion ratio of common units for common stock | one-for-one basis | ||
Common stock, par value | $ 0.01 | $ 0.01 | |
Number of trading days | 10 | ||
Aggregate value upon redemption of outstanding noncontrolling common units | $ 56,200,000 | $ 61,400,000 | |
Series A Preferred Units [Member] | |||
Temporary Equity [Line Items] | |||
7.45% Series A cumulative redeemable preferred units of the Operating Partnership outstanding | 1,500,000 | 1,500,000 | |
Preferred units redemption value per unit | $ 50 | $ 50 | |
Changes to noncontrolling interest | $ 0 |
Receivables (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Current Receivables, net | Current receivables, net is primarily comprised of contractual rents and other lease-related obligations due from tenants. The balance consisted of the following as of September 30, 2011 and December 31, 2010:
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Deferred Rent Receivables, net | Deferred rent receivables, net consisted of the following as of September 30, 2011 and December 31, 2010:
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Commitments and Contingencies (Details) (USD $) In Thousands | Sep. 30, 2011 | |||||
---|---|---|---|---|---|---|
Summary of minimum commitment | ||||||
Remaining 2011 | $ 481 | |||||
2012 | 1,926 | |||||
2013 | 1,926 | |||||
2014 | 1,870 | |||||
2015 | 1,830 | |||||
Thereafter | 133,212 | [1],[2] | ||||
Total | $ 141,245 | |||||
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Property Dispositions Reported as Discontinued Operations Property Dispositions Reported as Discontinued Operations | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property dispositions reported as discontinued operations | Note 14. Property Dispositions Reported as Discontinued Operations The following table summarizes the properties sold during the nine months ended September 30, 2011.
The following table summarizes the components that comprise income from discontinued operations for the three and nine months ended September 30, 2011 and 2010.
As of September 30, 2011, the net cash proceeds from this disposition of approximately $23.3 million, after the payment of selling commissions and other closing costs, are being temporarily held at a qualified intermediary, at our direction, for the purpose of facilitating a potential Section 1031 Exchange. The $23.3 million cash proceeds are included in restricted cash on the consolidated balance sheets at September 30, 2011. |
Consolidated Statements of Equity (Unaudited) (USD $) In Thousands, except Share data | Total | Total Stockholders' Equity | Preferred Stock [Member] | Common Stock [Member] | Common Stock Additional Paid-in Capital | Common Stock Distributions in Excess of Earnings | Noncontrolling Interests - Common Units of the Operating Partnership |
---|---|---|---|---|---|---|---|
Beginning Balance at Dec. 31, 2009 | $ 883,838 | $ 854,948 | $ 121,582 | $ 431 | $ 913,657 | $ (180,722) | $ 28,890 |
Beginning Balance, shares at Dec. 31, 2009 | 43,148,762 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 14,502 | 14,374 | 14,374 | 128 | |||
Issuance of common stock (Note 7) | 299,847 | 299,847 | 92 | 299,755 | |||
Issuance of common stock, shares (Note 7) | 9,200,000 | ||||||
Issuance of share-based compensation awards (Note 9) | 1,904 | 1,904 | 1,904 | ||||
Issuance of share-based compensation awards, shares (Note 9) | 3,239 | ||||||
Noncash amortization of share-based compensation | 5,050 | 5,050 | 5,050 | ||||
Exercise of stock options | 83 | 83 | 83 | ||||
Exercise of stock options, shares | 4,000 | ||||||
Repurchase of common stock and restricted stock units (Note9) | (2,121) | (2,121) | (2,121) | ||||
Repurchase of common stock and restricted stock units, shares (Note9) | (59,782) | ||||||
Settlement of restricted stock units for shares of common stock | (1,296) | (1,296) | (1,296) | ||||
Settlement of restricted stock units for shares of common stock, shares | 53,451 | ||||||
Allocation to the equity component of cash paid upon repurchase of 3.25% Exchangeable Notes | (2,694) | (2,694) | (2,694) | ||||
Adjustment for noncontrolling interest | 0 | (4,665) | (4,665) | 4,665 | |||
Preferred distributions and dividends | (11,397) | (11,397) | (11,397) | ||||
Dividends declared per common share and common unit ($1.05 per share/ unit) | (54,280) | (52,470) | (52,470) | (1,810) | |||
Ending Balance at Sep. 30, 2010 | 1,133,436 | 1,101,563 | 121,582 | 523 | 1,209,673 | (230,215) | 31,873 |
Ending Balance, shares at Sep. 30, 2010 | 52,349,670 | ||||||
Beginning Balance at Dec. 31, 2010 | 1,117,730 | 1,086,351 | 121,582 | 523 | 1,211,498 | (247,252) | 31,379 |
Beginning Balance, shares at Dec. 31, 2010 | 52,349,670 | 52,349,670 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 22,629 | 22,309 | 22,309 | 320 | |||
Issuance of common stock (Note 7) | 221,015 | 221,015 | 61 | 220,954 | |||
Issuance of common stock, shares (Note 7) | 6,037,500 | ||||||
Issuance of share-based compensation awards (Note 9) | 2,447 | 2,447 | 1 | 2,446 | |||
Issuance of share-based compensation awards, shares (Note 9) | 68,727 | ||||||
Noncash amortization of share-based compensation | 4,201 | 4,201 | 4,201 | ||||
Exercise of stock options | 395 | 395 | 395 | ||||
Exercise of stock options, shares | 15,000 | ||||||
Repurchase of common stock and restricted stock units (Note9) | (736) | (736) | (736) | ||||
Repurchase of common stock and restricted stock units, shares (Note9) | (11,485) | ||||||
Exchange of common units of the Operating Partnership | 0 | 91 | 91 | (91) | |||
Exchange of common units of the Operating Partnership, shares | 5,000 | ||||||
Adjustment for noncontrolling interest | 0 | 3,269 | 3,269 | (3,269) | |||
Preferred distributions and dividends | (11,397) | (11,397) | (11,397) | ||||
Dividends declared per common share and common unit ($1.05 per share/ unit) | (61,941) | (60,136) | (60,136) | (1,805) | |||
Ending Balance at Sep. 30, 2011 | $ 1,294,343 | $ 1,261,271 | $ 121,582 | $ 585 | $ 1,435,580 | $ (296,476) | $ 33,072 |
Ending Balance, shares at Sep. 30, 2011 | 58,464,412 | 58,464,412 |
Stockholders' Equity of the Company | 9 Months Ended |
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Sep. 30, 2011 | |
Equity [Abstract] | |
Stockholders' Equity of the Company | 7. Stockholders' Equity of the Company Issuance of Common Stock In April 2011, the Company completed an underwritten public offering of 6,037,500 shares of its common stock. The net offering proceeds, after deducting underwriting discounts and commissions and offering expenses, were approximately $221.0 million. We used a portion of the net proceeds from the offering to fund acquisitions and for general corporate purposes. Periodic Stock Offering Program In July 2011, the Company commenced a periodic stock offering program under which it may sell up to $200.0 million aggregate gross sales price of the Company's common stock from time to time in “at the market” ("ATM") offerings. The Company may sell common stock under this program in amounts and at times to be determined by the Company and the Company has no obligation to sell common stock under this program. As of the date of this report, there have been no sales of common stock under the ATM program. |
Fair Value Measurements and Disclosures (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value of the company's marketable securities | The following table sets forth the fair value of our marketable securities and related deferred compensation plan liability as of September 30, 2011 and December 31, 2010:
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Fair value adjustment of marketable securities and deferred compensation plan liability | The following table sets forth the related amounts recorded during the three and nine months ended September 30, 2011 and 2010:
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Carrying value and fair value of company's remaining financial assets and liabilities | The following table sets forth the carrying value and the fair value of our other financial instruments as of September 30, 2011 and December 31, 2010:
________________________ (1) As of September 30, 2011, there were no outstanding borrowings on the Credit Facility. |
Share-Based Compensation | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Compensation | 9. Share-Based Compensation Stockholder Approved Equity Compensation Plans As of September 30, 2011, we had one share-based incentive compensation plan, the Kilroy Realty 2006 Incentive Award Plan as amended (the “2006 Plan”). As of September 30, 2011, 3,799,737 shares were available for grant under the 2006 Plan. The number of shares that remains available for grant is calculated using the weighted share counting provisions set forth in the 2006 Plan, which are based on the type of awards that are granted. The maximum number of shares available for grant subject to full value awards (which generally include equity awards other than options and stock appreciation rights) was 1,301,280 shares as of September 30, 2011. Summary of Nonvested Shares A summary of our nonvested shares activity from January 1, 2011 through September 30, 2011 is presented below:
________________________
A summary of our nonvested and vested shares activity for the nine months ended September 30, 2011 and 2010 is presented below:
(1) Total fair value of shares vested was calculated based on the quoted closing share price of the Company's common stock on the NYSE on the day of vesting. Summary of Restricted Stock Units A summary of our restricted stock unit ("RSU") activity from January 1, 2011 through September 30, 2011 is presented below:
________________________
A summary of our RSU activity for the nine months ended September 30, 2011 and 2010 is presented below:
_______________________ (1) Total fair value of RSUs vested was calculated based on the quoted closing share price of the Company's common stock on the NYSE on the day of vesting. Compensation Cost Recorded During the Period The total compensation cost for all share-based compensation programs was $1.4 million and $2.2 million for the three months ended September 30, 2011 and 2010, respectively, and $4.2 million and $6.4 million for the nine months ended September 30, 2011 and 2010, respectively. Of the total share-based compensation cost, $0.3 million was capitalized as part of real estate assets for the three months ended September 30, 2011 and 2010, and $0.8 million and $1.1 million was capitalized as part of real estate assets for the nine months ended September 30, 2011 and 2010, respectively. As of September 30, 2011, there was approximately $5.7 million of total unrecognized compensation cost related to nonvested incentive awards granted under share-based compensation arrangements that is expected to be recognized over a weighted-average period of 1.6 years. The remaining compensation cost related to these nonvested incentive awards had been recognized in periods prior to September 30, 2011. |
Fair Value Measurements and Disclosures (Details) (USD $) In Thousands | 3 Months Ended | 9 Months Ended | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | Sep. 30, 2011 | Sep. 30, 2010 | Dec. 31, 2010 | ||||||||||
Assets and Liabilities Reported at Fair Value | ||||||||||||||
Marketable securities | $ 5,213 | $ 5,213 | $ 4,902 | |||||||||||
Fair value adjustment of marketable securities and deferred compensation plan liability | ||||||||||||||
Net loss (gain) on marketable securities | (642) | 311 | (429) | 190 | ||||||||||
Decrease (increase) to compensation cost | 642 | (364) | 429 | (206) | ||||||||||
Fair Value (Level 1) [Member] | ||||||||||||||
Assets and Liabilities Reported at Fair Value | ||||||||||||||
Marketable securities | 5,213 | [1],[2] | 5,213 | [1],[2] | 4,902 | [1],[2] | ||||||||
Deferred compensation plan liability | $ 5,118 | [1],[3] | $ 5,118 | [1],[3] | $ 4,809 | [1],[3] | ||||||||
|
Share-Based Compensation (Details Textuals) (USD $) In Millions, except Share data, unless otherwise specified | 3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2011
NumberofBuildings
Share_Based_Incentive_Compensation_Plans | Sep. 30, 2010 | Sep. 30, 2011
NumberofTradingDays
Years
RSF
NumberofBuildings
Share_Based_Incentive_Compensation_Plans | Sep. 30, 2010 | |
Share-Based Compensation (Textuals) [Abstract] | ||||
Share-Based Compensation Plans | 1 | 1 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 3,799,737 | 3,799,737 | ||
Share based compensation available for grant full value awards subject to full value awards | 1,301,280 | 1,301,280 | ||
Share-based compensation programs, total compensation cost | $ 1.4 | $ 2.2 | $ 4.2 | $ 6.4 |
Share-based compensation cost capitalized as part of real estate assets | 0.3 | 0.3 | 0.8 | 1.1 |
Total unrecognized compensation cost related to nonvested incentive awards granted | $ 5.7 | $ 5.7 | ||
Total unrecognized compensation cost weighted-average period | 1.6 | |||
Restricted Stock [Member] | ||||
Share-Based Compensation (Textuals) [Abstract] | ||||
Number of shares that were tendered to satisfy minimum statutory tax withholding requirements | 2,198 |
Consolidated Statements of Cash Flows (Unaudited) (USD $) In Thousands | 9 Months Ended | |
---|---|---|
Sep. 30, 2011 | Sep. 30, 2010 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 22,629 | $ 14,502 |
Adjustments to reconcile net income to net cash provided by operating activities (including discontinued operations): | ||
Depreciation and amortization of building and improvements and leasing costs | 96,971 | 74,049 |
Increase (decrease) in provision for bad debts | 141 | (843) |
Depreciation of furniture, fixtures and equipment | 839 | 665 |
Noncash amortization of share-based compensation awards | 3,365 | 5,328 |
Noncash amortization of deferred financing costs and debt discounts and premiums | 10,164 | 9,098 |
Noncash amortization of above/(below) market rents (Note 3) | 1,519 | 696 |
Net gain on dispositions of discontinued operations (Note 14) | (12,555) | 0 |
Loss on early extinguishment of debt | 0 | 4,564 |
Noncash amortization of deferred revenue related to tenant-funded tenant improvements | (7,005) | (7,108) |
Other | (630) | 0 |
Changes in operating assets and liabilities: | ||
Marketable securities | (311) | (1,029) |
Current receivables | (1,022) | (706) |
Deferred rent receivables | (15,543) | (8,441) |
Other deferred leasing costs | 535 | (2,516) |
Prepaid expenses and other assets | (3,528) | (2,765) |
Accounts payable, accrued expenses and other liabilities | 18,914 | 3,049 |
Deferred revenue | (598) | 5,546 |
Rents received in advance and tenant security deposits | 180 | 839 |
Net cash provided by operating activities | 114,065 | 94,928 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Expenditures for acquisition of operating properties (Note 2) | (481,756) | (373,574) |
Expenditures for operating properties | (41,087) | (56,393) |
Expenditures for development and redevelopment properties and undeveloped land | (18,682) | (14,681) |
Net increase in escrow deposits | (11,000) | (2,002) |
(Increase) decrease in restricted cash | (690) | 1,316 |
Receipt of principal payments on note receivable | 0 | 10,679 |
Net cash used in investing activities | (553,215) | (434,655) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Net proceeds from issuance of common stock (Note 7) | 221,015 | 299,847 |
Borrowings on unsecured line of credit | 302,000 | 553,000 |
Repayments on unsecured line of credit | (461,000) | (445,000) |
Principal payments on secured debt | (5,295) | (101,653) |
Repurchase of exchangeable senior notes | 0 | (151,097) |
Proceeds from issuance of secured debt (Note 5) | 135,000 | 71,000 |
Proceeds from issuance of unsecured debt (Note 5) | 324,476 | 247,870 |
Repayments of unsecured debt | 0 | (61,000) |
Financing costs | (8,584) | (11,200) |
Decrease in loan deposits and other | 2,859 | 1,420 |
Repurchase of common stock and restricted stock units | (736) | (3,417) |
Proceeds from exercise of stock options | 395 | 83 |
Dividends and distributions paid to common stockholders and common unitholders | (58,942) | (50,299) |
Dividends and distributions paid to preferred stockholders and preferred unitholders | (11,397) | (11,397) |
Net cash provided by financing activities | 439,791 | 338,157 |
Net increase (decrease) in cash and cash equivalents | 641 | (1,570) |
Cash and cash equivalents, beginning of period | 14,840 | 9,883 |
Cash and cash equivalents, end of period | 15,481 | 8,313 |
SUPPLEMENTAL CASH FLOWS INFORMATION: | ||
Cash paid for interest, net of capitalized interest of $5,361 and $6,140 as of September 30, 2011 and 2010, respectively | 42,070 | 26,182 |
NONCASH INVESTING TRANSACTIONS: | ||
Accrual for expenditures for operating properties and development and redevelopment properties | 13,506 | 13,614 |
Tenant improvements funded directly by tenants to third parties | 3,037 | 2,520 |
Assumption of secured debt with property acquisition (Notes 2 and 5) | 30,042 | 51,079 |
Assumption of other liabilities with property acquisitions (Note 2) | 4,515 | 6,369 |
Net proceeds from disposition held by a qualified intermediary in connection wtih Section 1031 exchange (Note 14) | 23,285 | 0 |
NONCASH FINANCING TRANSACTIONS: | ||
Accrual of dividends and distributions payable to common stockholders and common unitholders | 21,064 | 18,925 |
Accrual of dividends and distributions payable to preferred stockholders and preferred unitholders | 1,909 | 1,909 |
Issuance of share-based compensation awards (Note 9) | 7,505 | 5,418 |
Exchange of common units of the Operating Partnership into shares of the Company's common stock | $ 91 | $ 0 |
Organization and Basis of Presentation | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization and Basis of Presentation | 1. Organization and Basis of Presentation Organization Kilroy Realty Corporation (the "Company") is a self-administered real estate investment trust (“REIT”) active in office and industrial submarkets along the West Coast. We own, develop, acquire and manage real estate assets, consisting primarily of Class A properties in the coastal regions of Los Angeles, Orange County, San Diego, greater Seattle and the San Francisco Bay Area, which we believe have strategic advantages and strong barriers to entry. We qualify as a REIT under the Internal Revenue Code of 1986, as amended (the "Code"). The Company's common stock is publicly traded on the New York Stock Exchange (“NYSE”) under the ticker symbol “KRC.” We own our interests in all of our real estate assets through Kilroy Realty, L.P. (the "Operating Partnership") and Kilroy Realty Finance Partnership, L.P. (the "Finance Partnership"). We conduct substantially all of our operations through the Operating Partnership. Unless stated otherwise or the context indicates otherwise, the terms "Kilroy Realty Corporation" or the "Company," "we," "our," and "us" refer to Kilroy Realty Corporation and its consolidated subsidiaries and the term "Operating Partnership" refers to Kilroy Realty, L.P. and its consolidated subsidiaries. The descriptions of our business, employees, and properties apply to both the Company and the Operating Partnership. The following table of office buildings (the "Office Properties") and industrial buildings (the "Industrial Properties") summarizes our stabilized portfolio of operating properties as of September 30, 2011. As of September 30, 2011, all of our properties and all of our business is currently conducted in the state of California with the exception of the operation of six office properties located in the state of Washington.
________________________ (1) Includes nine office properties acquired during the nine months ended September 30, 2011 for a total amount of $516.3 million (see Note 2 for additional information). Our stabilized portfolio excludes undeveloped land, development and redevelopment properties currently under construction or committed for construction, "lease-up" properties, and one property we are currently in the process of repositioning for residential use. As of September 30, 2011, we had three office redevelopment properties under construction encompassing approximately 508,000 rentable square feet. We commenced redevelopment on two of the three redevelopment properties in the third quarter of 2011. We define "lease-up" properties as properties we recently developed or redeveloped that have not yet reached 95% occupancy and are within one year following cessation of major construction activities. We had no "lease-up" properties as of September 30, 2011. In addition, as of September 30, 2011 we had one industrial property that we were in the process of demolishing to prepare the land for potential sale. We successfully obtained entitlements to reposition this site for residential use in 2011. Ultimate timing of the potential sale will depend upon market conditions and other factors. As of September 30, 2011, the Company owned a 97.1% general partnership interest in the Operating Partnership. The remaining 2.9% common limited partnership interest in the Operating Partnership as of September 30, 2011 was owned by non-affiliated investors and certain of our directors and officers (see Note 6). Both the general and limited common partnership interests in the Operating Partnership are denominated in common units. The number of common units held by the Company is at all times equivalent to the number of outstanding shares of the Company's common stock, and the rights of all the common units to quarterly distributions and payments in liquidation mirror those of the Company's common stockholders. The common limited partners have certain redemption rights as provided in the Operating Partnership's Fifth Amended and Restated Agreement of Limited Partnership (as amended, the “Partnership Agreement”) (see Note 6). Kilroy Realty Finance, Inc., our wholly-owned subsidiary, is the sole general partner of the Finance Partnership and owns a 1.0% general partnership interest. The Operating Partnership owns the remaining 99.0% limited partnership interest. Kilroy Services, LLC ("KSLLC"), which is a wholly-owned subsidiary of the Operating Partnership, is the entity through which we conduct substantially all of our development activities. With the exception of the Operating Partnership, all of our subsidiaries, which include Kilroy Realty TRS, Inc., Kilroy Realty Management, L.P., Kilroy RB, LLC, Kilroy RB II, LLC, Kilroy Realty Northside Drive, LLC and Kilroy Realty 303, LLC are wholly-owned. Basis of Presentation The consolidated financial statements of the Company include the consolidated financial position and results of operations of the Company, the Operating Partnership, the Finance Partnership, KSLLC, and all of our wholly-owned subsidiaries. The consolidated financial statements of the Operating Partnership include the consolidated financial position and results of operations of the Operating Partnership, the Finance Partnership, KSLLC, and all wholly-owned subsidiaries of the Operating Partnership. All intercompany balances and transactions have been eliminated in the consolidated financial statements. The consolidated financial statements of the Company and the Operating Partnership also include two variable interest entities ("VIE") in which we are deemed to be the primary beneficiary. We had one bankruptcy-remote VIE, which was formed in 2010 to hold three properties that secure the debt we assumed when we acquired the properties in 2010. The assets held by this entity are not available to satisfy the debts and other obligations of the Company or the Operating Partnership. In September 2011, we acquired a building which was transferred to a special purpose VIE to facilitate a potential tax-deferred property exchange pursuant to Section 1031 of the Code for federal and state income tax purposes ("Section 1031 Exchange"). The Company is obligated to complete the Section 1031 Exchange and take title to the property within 180 days of the initial acquisition date. The VIE will be terminated upon the completion of the Section 1031 Exchange. The impact of consolidating both VIEs increased the Company's total assets and liabilities by approximately $164.0 million and $63.0 million, respectively, at September 30, 2011. The accompanying interim financial statements have been prepared by management in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and in conjunction with the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures required for annual financial statements have been condensed or excluded pursuant to SEC rules and regulations. Accordingly, the interim financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the accompanying interim financial statements reflect all adjustments of a normal and recurring nature that are considered necessary for a fair presentation of the results for the interim periods presented. However, the results of operations for the interim periods are not necessarily indicative of the results that may be expected for the year ending December 31, 2011. The interim financial statements for the Company and the Operating Partnership should be read in conjunction with the audited consolidated financial statements and notes thereto included in our annual report on Form 10-K for the year ended December 31, 2010. Change in Reportable Segments from Form 10-K for the year ended December 31, 2010 Our chief operating decision-makers internally evaluate the operating performance and financial results of our portfolio based on Net Operating Income for the following two segments of commercial real estate property: Office Properties and Industrial Properties. We define “Net Operating Income” as operating revenues (rental income, tenant reimbursements, and other property income) less operating expenses (property expenses, real estate taxes, provision for bad debts, and ground leases). During the three and nine months ended September 30, 2011, the amount of revenues and Net Operating Income generated by our Industrial Properties, in relation to our total consolidated operating portfolio revenues and Net Operating Income fell below the required 10% quantitative reporting thresholds for the Industrial Properties to be considered a reportable segment under GAAP. Therefore, for the three and nine months ended September 30, 2011, our only reportable segment is our Office Properties segment. See Note 13 for a reconciliation of our Office Properties segment to our consolidated revenues, Net Operating Income, net income and consolidated assets. |
Deferred Leasing Costs and Acquisition-related Intangible Assets and Liabilities, net (Details) (USD $) In Thousands | Sep. 30, 2011 | Dec. 31, 2010 | ||||||
---|---|---|---|---|---|---|---|---|
Deferred Leasing Costs and Acquisition-related Intangible Assets and Liabilities, Net | ||||||||
Total deferred leasing costs and acquisition-related intangible assets, net | $ 155,757 | [1] | $ 131,066 | |||||
Total acquisitions-related intangible liabilities, net | 37,187 | [1],[2] | 16,844 | [2] | ||||
Deferred Leasing Costs [Member] | ||||||||
Deferred Leasing Costs and Acquisition-related Intangible Assets and Liabilities, Net | ||||||||
Finite-lived intangible assets/liabilities, gross | 136,374 | [1] | 128,980 | |||||
Accumulated amortization | (48,290) | [1] | (45,869) | |||||
Finite-lived intangible assets/liabilities, net | 88,084 | [1] | 83,111 | |||||
Above-Market Leases [Member] | ||||||||
Deferred Leasing Costs and Acquisition-related Intangible Assets and Liabilities, Net | ||||||||
Finite-lived intangible assets/liabilities, gross | 28,143 | 21,321 | ||||||
Accumulated amortization | (6,250) | (2,163) | ||||||
Finite-lived intangible assets/liabilities, net | 21,893 | 19,158 | ||||||
In-Place Leases [Member] | ||||||||
Deferred Leasing Costs and Acquisition-related Intangible Assets and Liabilities, Net | ||||||||
Finite-lived intangible assets/liabilities, gross | 57,195 | [1] | 36,964 | |||||
Accumulated amortization | (11,415) | [1] | (8,167) | |||||
Finite-lived intangible assets/liabilities, net | 45,780 | [1] | 28,797 | |||||
Below-Market Leases [Member] | ||||||||
Deferred Leasing Costs and Acquisition-related Intangible Assets and Liabilities, Net | ||||||||
Finite-lived intangible assets/liabilities, gross | 35,852 | [1],[2] | 21,938 | [2] | ||||
Accumulated amortization | (3,844) | [1],[2] | (5,094) | [2] | ||||
Finite-lived intangible assets/liabilities, net | 32,008 | [1],[2] | 16,844 | [2] | ||||
Above-Market Ground Lease Obligation [Member] | ||||||||
Deferred Leasing Costs and Acquisition-related Intangible Assets and Liabilities, Net | ||||||||
Finite-lived intangible assets/liabilities, gross | 5,200 | [2] | 0 | [2] | ||||
Accumulated amortization | (21) | [2] | 0 | [2] | ||||
Finite-lived intangible assets/liabilities, net | $ 5,179 | [2] | $ 0 | [2] | ||||
|
Secured and Unsecured Debt of the Operating Partnership (Details) (USD $) In Thousands, except Share data, unless otherwise specified | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2011 | Dec. 31, 2010 | Sep. 30, 2010 | Sep. 30, 2011
Kilroy Realty, L.P. [Member] | Dec. 31, 2010
Kilroy Realty, L.P. [Member] | Sep. 30, 2010
Kilroy Realty, L.P. [Member] | Sep. 30, 2011
Kilroy Realty, L.P. [Member]
3.25% Exchangeable Notes [Member] | Dec. 31, 2010
Kilroy Realty, L.P. [Member]
3.25% Exchangeable Notes [Member] | Sep. 30, 2011
Kilroy Realty, L.P. [Member]
4.25% Exchangeable Notes [Member] | Dec. 31, 2010
Kilroy Realty, L.P. [Member]
4.25% Exchangeable Notes [Member] | ||||||||||||||||||||
Balance and significant terms of the Exchangeable Notes outstanding | |||||||||||||||||||||||||||||
Principal amount | $ 1,776,900 | [1] | $ 148,000 | $ 148,000 | $ 172,500 | $ 172,500 | |||||||||||||||||||||||
Unamortized discount | (1,714) | (4,004) | (13,671) | (16,532) | |||||||||||||||||||||||||
Net carrying amount of liability component | 305,115 | 299,964 | 305,115 | 299,964 | 146,286 | 143,996 | 158,829 | 155,968 | |||||||||||||||||||||
Carrying amount of equity component | $ 33,675 | $ 33,675 | $ 19,835 | $ 19,835 | |||||||||||||||||||||||||
Maturity Date | Apr. 15, 2012 | Apr. 15, 2012 | Nov. 15, 2014 | Nov. 15, 2014 | |||||||||||||||||||||||||
Stated coupon rate | 3.25% | 3.25% | 3.25% | [2] | 3.25% | [2] | 4.25% | [3] | 4.25% | [3] | |||||||||||||||||||
Effective interest rate | 5.45% | [4] | 5.45% | [4] | 7.13% | [4] | 7.13% | [4] | |||||||||||||||||||||
Exchange rate per $1,000 principal value of the Exchangeable Notes, as adjusted | 11.3636 | [5] | 11.3636 | [5] | 27.8307 | [5] | 27.8307 | [5] | |||||||||||||||||||||
Exchange price, as adjusted | $ 88 | [5] | $ 88 | [5] | $ 35.93 | [5] | $ 35.93 | [5] | |||||||||||||||||||||
Number of Shares on which aggregate consideration to be delivered upon conversion is determined | 1,681,813 | [5] | 1,681,813 | [5] | 4,800,796 | [5] | 4,800,796 | [5] | |||||||||||||||||||||
Capped call transactions | |||||||||||||||||||||||||||||
Referenced shares of common stock under capped call options | 1,121,201 | [6] | 1,121,201 | [6] | 4,800,796 | [7] | 4,800,796 | [7] | |||||||||||||||||||||
Exchange price including effect of capped calls | $ 102.72 | [6] | $ 102.72 | [6] | $ 42.81 | [7] | $ 42.81 | [7] | |||||||||||||||||||||
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Future Minimum Rent (Details) (USD $) In Thousands | Sep. 30, 2011 |
---|---|
Future contractual minimum rent under operating lease | |
Remaining 2011 | $ 79,636 |
2012 | 323,174 |
2013 | 307,751 |
2014 | 275,387 |
2015 | 220,593 |
Thereafter | 687,083 |
Total | $ 1,893,624 |
Pro Forma Results of the Operating Partnership | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Acquisition, Equity Interests Issued or Issuable [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pro Forma Results of the Operating Partnership | 18. Pro Forma Results of the Company The following pro forma consolidated results of operations of the Company for the three and nine months ended September 30, 2011 and 2010 assumes that the acquisitions of 601 108th Avenue N.E., Bellevue, WA, and 201 Third Street, San Francisco, CA, were completed as of January 1, 2010. Pro forma data may not be indicative of the results that would have been reported had the acquisitions actually occurred as of January 1, 2010, nor does it intend to be a projection of future results.
________________________
The following table summarizes the results of operations for the properties at 601 108th Avenue N.E., Bellevue, WA, and 201 Third Street, San Francisco, CA, from June 3, 2011 and September 15, 2011, the dates of acquisition, respectively, through September 30, 2011:
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Kilroy Realty, L.P. [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Acquisition, Equity Interests Issued or Issuable [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pro Forma Results of the Operating Partnership | 19. Pro Forma Results of the Operating Partnership The following pro forma consolidated results of operations of the Operating Partnership for the three and nine months ended September 30, 2011 and 2010 assumes that the acquisitions of 601 108th Avenue N.E., Bellevue, WA, and 201 Third Street, San Francisco, CA, were completed as of January 1, 2010. Pro forma data may not be indicative of the results that would have been reported had the acquisitions actually occurred as of January 1, 2010, nor does it intend to be a projection of future results.
________________________
The following table summarizes the results of operations for the properties at 601 108th Avenue N.E., Bellevue, WA, and 201 Third Street, San Francisco, CA, from June 3, 2011 and September 15, 2011, the dates of acquisition, respectively, through September 30, 2011:
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Secured and Unsecured Debt of the Operating Partnership | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Secured and Unsecured Debt of the Operating Partnership | 5. Secured and Unsecured Debt of the Operating Partnership Secured Debt In January 2011, the Operating Partnership borrowed $135.0 million under a mortgage loan that is scheduled to mature on February 1, 2018. The mortgage loan is secured by our 303 Second Street property in San Francisco, bears interest at an annual rate of 4.27%, and requires interest-only payments for the first two years with a 30-year amortization schedule thereafter. We used a portion of the proceeds to repay borrowings under the Operating Partnership's unsecured line of credit (the "Credit Facility"). In April 2011, in connection with the acquisition of four office buildings in Kirkland, Washington, the Operating Partnership assumed a mortgage loan that is secured by the project. The assumed mortgage loan had a principal balance of $30.0 million at the acquisition date and is scheduled to mature on April 15, 2015. The loan bears contractual interest at an annual rate of 4.94% and requires monthly principal and interest payments based on a 30-year amortization period. This mortgage loan was recorded at fair value at the date of acquisition resulting in a premium of approximately $1.0 million. This premium will be accreted on a straight-line basis, which approximates the effective interest method, as a reduction to interest expense from the acquisition date through the maturity date of the mortgage loan. This will result in interest being recorded at an effective interest rate of 4.00% for financial reporting purposes. Although both new mortgage loans are secured and non-recourse to the Company and the Operating Partnership, the Company provides limited customary secured debt guarantees for items such as voluntary bankruptcy, fraud, misapplication of payments, and environmental liabilities. Exchangeable Senior Notes The following table summarizes the balance and significant terms of the Company's 3.25% Exchangeable Notes due 2012 (the "3.25% Exchangeable Notes") and 4.25% Exchangeable Notes due 2014 (the "4.25% Exchangeable Notes" and together with the 3.25% Exchangeable Notes, the "Exchangeable Notes") outstanding as of September 30, 2011 and December 31, 2010:
_____________________
represents our conventional debt borrowing rate at the date of issuance.
common dividends. Capped Call Transactions In connection with the offerings of the Exchangeable Notes, we entered into capped call option transactions ("capped calls") to mitigate the dilutive impact of the potential exchange of the Exchangeable Notes. The following table summarizes our capped call option positions as of both September 30, 2011 and December 31, 2010:
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For the nine months ended September 30, 2011, the per share average trading price of the Company's common stock on the NYSE of $37.92 was higher than the $35.93 exchange price for the 4.25% Exchangeable Notes. Even though the 4.25% Exchangeable Notes were not convertible as of September 30, 2011, if they were convertible as of September 30, 2011, the approximate fair value of the shares upon conversion at that date would have been equal to approximately $180.4 million, which would exceed the $172.5 million principal amount of the 4.25% Exchangeable Notes by approximately $7.9 million. See Notes 15 and 16 for a discussion of the impact of the Exchangeable Notes on our diluted earnings per share and unit calculations for the periods presented. Interest Expense for the Exchangeable Notes The unamortized discount on the Exchangeable Notes is accreted as additional interest expense from the date of issuance through the maturity date of the applicable Exchangeable Notes. The following table summarizes the total interest expense attributable to the Exchangeable Notes based on the effective interest rates set forth above, before the effect of capitalized interest, for the three and nine months ended September 30, 2011 and 2010:
Unsecured Senior Notes In July 2011, the Operating Partnership issued unsecured senior notes in a public offering with an aggregate principal balance of $325.0 million that are scheduled to mature on July 15, 2018. The unsecured senior notes require semi-annual interest payments each January and July based on a stated annual interest rate of 4.80%. The unsecured senior notes are shown net of the initial issuance discount of $0.5 million on the consolidated balance sheets. This discount is being amortized on a straight-line basis, which approximates the effective interest method, as additional interest expense from the date of issuance through the maturity date of the unsecured senior notes, resulting in interest expense being recorded at a net effective interest rate of 4.83%, before the impact of debt issuance costs, for financial reporting purposes. The Company used a portion of the net proceeds for general corporate purposes, including the repayment of borrowings under the Operating Partnership's Credit Facility. Unsecured Line of Credit In June 2011, we amended the terms of our Credit Facility to extend the maturity date, and reduce the interest rate and facility fee. The following table summarizes the terms of our Credit Facility as of December 31, 2010 and as amended as of September 30, 2011:
________________________ (1) As of September 30, 2011, there were no borrowings outstanding on the Credit Facility. (2) We may elect to borrow, subject to lender approval, up to an additional $200 million under an accordion feature under the terms of the Credit Facility. (3) The Credit Facility interest rate was calculated based on an annual rate of LIBOR plus 1.750% and 2.675% as of September 30, 2011 and December 31, 2010, respectively. No interest rate is shown as of September 30, 2011 because no borrowings were outstanding. (4) The facility fee is paid on a quarterly basis and is calculated based on the total borrowing capacity. In addition to the facility fee, we also incurred debt origination and legal costs of approximately $5.0 million when we entered into the Credit Facility in 2010 and an additional $3.3 million when we amended the Credit Facility in 2011. The unamortized balance of these costs will be amortized as additional interest expense over the extended term of the Credit Facility. (5) Under the original and amended terms of the Credit Facility, we may exercise an option to extend the maturity date by one year. The Company intends to borrow amounts under the Credit Facility from time to time for general corporate purposes, to fund potential acquisitions, to finance development and redevelopment expenditures, and to potentially repay long-term debt. Debt Covenants and Restrictions The Credit Facility, the unsecured senior notes, and certain other secured debt arrangements contain covenants and restrictions requiring us to meet certain financial ratios and reporting requirements. Some of the more restrictive financial covenants include a maximum ratio of total debt to total asset value, a minimum fixed-charge coverage ratio, a minimum unsecured debt ratio, and a minimum unencumbered asset pool debt service coverage ratio. Noncompliance with one or more of the covenants and restrictions could result in the full or partial principal balance of the associated debt becoming immediately due and payable. We believe we were in compliance with all of our debt covenants as of September 30, 2011. Debt Maturities The following table summarizes the stated debt maturities and scheduled amortization payments, excluding debt discounts and premiums, as of September 30, 2011:
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Capitalized Interest and Loan Fees The following table sets forth our gross interest expense, including debt discount/premium and loan cost amortization, net of capitalized interest, for the three and nine months ended September 30, 2011 and 2010. The capitalized amounts are a cost of development and redevelopment, and increase the carrying value of undeveloped land and construction in progress.
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Consolidated Balance Sheets (Unaudited) (USD $) In Thousands | Sep. 30, 2011 | Dec. 31, 2010 | |||
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REAL ESTATE ASSETS: | |||||
Land and improvements (Note 2) | $ 537,973 | $ 491,333 | |||
Buildings and improvements (Note 2) | 2,881,504 | 2,435,173 | |||
Undeveloped land and construction in progress (Note 1) | 328,785 | 290,365 | |||
Total real estate held for investment | 3,748,262 | 3,216,871 | |||
Accumulated depreciation and amortization | (732,162) | (672,429) | |||
Total real estate assets, net | 3,016,100 | 2,544,442 | |||
CASH AND CASH EQUIVALENTS | 15,481 | 14,840 | |||
RESTRICTED CASH (Note 14) | 25,436 | 1,461 | |||
MARKETABLE SECURITIES (Note 12) | 5,213 | 4,902 | |||
CURRENT RECEIVABLES, NET (Note 4) | 6,860 | 6,258 | |||
DEFERRED RENT RECEIVABLES, NET (Note 4) | 103,668 | 89,052 | |||
DEFERRED LEASING COSTS AND ACQUISITION-RELATED INTANGIBLE ASSETS, NET (Notes 2 and 3) | 155,757 | [1] | 131,066 | ||
DEFERRED FINANCING COSTS, NET (Note 5) | 19,638 | 16,447 | |||
PREPAID EXPENSES AND OTHER ASSETS, NET (Note 11) | 19,531 | 8,097 | |||
TOTAL ASSETS | 3,367,684 | 2,816,565 | |||
LIABILITIES: | |||||
Secured debt, net (Notes 5 and 12) | 473,997 | 313,009 | |||
Exchangeable senior notes, net (Notes 5 and 12) | 305,115 | 299,964 | |||
Unsecured senior notes, net (Notes 5 and 12) | 980,487 | 655,803 | |||
Unsecured line of credit (Notes 5 and 12) | 0 | 159,000 | |||
Accounts payable, accrued expenses and other liabilities | 93,050 | 68,525 | |||
Accrued distributions (Note 16) | 22,565 | 20,385 | |||
Deferred revenue and acquisition-related intangible liabilities, net (Note 3) | 95,120 | 79,322 | |||
Rents received in advance and tenant security deposits | 29,369 | 29,189 | |||
Total liabilities | 1,999,703 | 1,625,197 | |||
COMMITMENTS AND CONTINGENCIES (Note 11) | |||||
NONCONTROLLING INTEREST (Note 6): | |||||
7.45% Series A Cumulative Redeemable Preferred units of the Operating Partnership | 73,638 | 73,638 | |||
Preferred stock, $.01 par value, 30,000,000 shares authorized: | |||||
Common stock, $.01 par value, 150,000,000 shares authorized, 58,464,412 and 52,349,670 shares issued and outstanding, respectively | 585 | 523 | |||
Additional paid-in capital | 1,435,580 | 1,211,498 | |||
Distributions in excess of earnings | (296,476) | (247,252) | |||
Total stockholders' equity | 1,261,271 | 1,086,351 | |||
Noncontrolling interest : | |||||
Common units of the Operating Partnership ( Note 6 ) | 33,072 | 31,379 | |||
Total equity | 1,294,343 | 1,117,730 | |||
TOTAL LIABILITIES, NONCONTROLLING INTEREST AND EQUITY | 3,367,684 | 2,816,565 | |||
Series A Cumulative Redeemable Preferred Stock | |||||
Preferred stock, $.01 par value, 30,000,000 shares authorized: | |||||
Cumulative Redeemable Preferred stock | 0 | 0 | |||
Series E Cumulative Redeemable Preferred Stock | |||||
Preferred stock, $.01 par value, 30,000,000 shares authorized: | |||||
Cumulative Redeemable Preferred stock | 38,425 | 38,425 | |||
Series F Cumulative Redeemable Preferred Stock | |||||
Preferred stock, $.01 par value, 30,000,000 shares authorized: | |||||
Cumulative Redeemable Preferred stock | $ 83,157 | $ 83,157 | |||
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Organization and Basis of Presentation (Tables) | 9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2011 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of stabilized portfolio of operating properties | The following table of office buildings (the "Office Properties") and industrial buildings (the "Industrial Properties") summarizes our stabilized portfolio of operating properties as of September 30, 2011. As of September 30, 2011, all of our properties and all of our business is currently conducted in the state of California with the exception of the operation of six office properties located in the state of Washington.
________________________ (1) Includes nine office properties acquired during the nine months ended September 30, 2011 for a total amount of $516.3 million (see Note 2 for additional information). |
Subsequent Events (Details) (USD $) | 9 Months Ended | 3 Months Ended | 9 Months Ended | |||||||||||
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Sep. 30, 2011 | Sep. 30, 2010 | Dec. 31, 2010 | Sep. 30, 2011
Kilroy Realty, L.P. [Member]
6.70% Mortgage Payable due Dec 27, 2011 [Member]
Repayment of Debt [Member] | Sep. 30, 2011
Kilroy Realty, L.P. [Member]
5.10% Mortgage Payable due April 1, 2012 [Member]
Repayment of Debt [Member] | Sep. 30, 2011
Dividend Paid [Member] | Sep. 30, 2011
Acquisition [Member] | Sep. 30, 2011
Kilroy Realty, L.P. [Member]
Line of Credit [Member] | Sep. 30, 2011
Kilroy Realty, L.P. [Member] | Sep. 30, 2010
Kilroy Realty, L.P. [Member] | Dec. 31, 2010
Kilroy Realty, L.P. [Member] | ||||
Subsequent Events (Textuals) [Abstract] | ||||||||||||||
Secured Debt | $ 473,997,000 | $ 313,009,000 | $ 68,700,000 | $ 52,000,000 | $ 473,997,000 | $ 313,009,000 | ||||||||
Debt Instrument, Maturity Date | Dec. 27, 2011 | Apr. 01, 2012 | ||||||||||||
Aggregate dividends, distributions, and dividend equivalents paid to common stockholders and common unitholders | 58,942,000 | 50,299,000 | 21,400,000 | 58,942,000 | 50,299,000 | |||||||||
Non-refundable escrow deposits related to potential future acquisitions | 11,000,000 | 25,000,000 | ||||||||||||
Credit Facility | $ 0 | $ 159,000,000 | $ 165,000,000 | $ 0 | [1] | $ 159,000,000 | ||||||||
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Segment Disclosure (Details 1) (USD $) In Thousands | Sep. 30, 2011 | Dec. 31, 2010 | Sep. 30, 2010 | Dec. 31, 2009 | ||||
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Assets: | ||||||||
Land, buildings and improvement, net | $ 2,687,315 | $ 2,254,077 | ||||||
Undeveloped land and construction in progress | 328,785 | 290,365 | ||||||
Total Assets | 3,367,684 | 2,816,565 | ||||||
Reconciliation to Consolidated Assets: | ||||||||
Total assets allocated to segments | 3,367,684 | 2,816,565 | ||||||
Other unallocated asset: | ||||||||
Cash and cash equivalents | 15,481 | 14,840 | 8,313 | 9,883 | ||||
Restricted cash | 25,436 | 1,461 | ||||||
Marketable securities | 5,213 | 4,902 | ||||||
Deferred financing costs, net | 19,638 | 16,447 | ||||||
Prepaid expenses and other assets, net | 19,531 | 8,097 | ||||||
Total Assets | 3,367,684 | 2,816,565 | ||||||
Operating Segments [Member] | ||||||||
Assets: | ||||||||
Total Assets | 3,282,385 | [1] | 2,770,818 | [1] | ||||
Reconciliation to Consolidated Assets: | ||||||||
Total assets allocated to segments | 3,282,385 | [1] | 2,770,818 | [1] | ||||
Other unallocated asset: | ||||||||
Total Assets | 3,282,385 | [1] | 2,770,818 | [1] | ||||
Reportable Segment - Office Properties [Member] | ||||||||
Assets: | ||||||||
Land, buildings and improvement, net | 2,541,029 | 2,108,019 | ||||||
Undeveloped land and construction in progress | 328,785 | 290,365 | ||||||
Total Assets | 3,121,084 | [1] | 2,611,206 | [1] | ||||
Reconciliation to Consolidated Assets: | ||||||||
Total assets allocated to segments | 3,121,084 | [1] | 2,611,206 | [1] | ||||
Other unallocated asset: | ||||||||
Total Assets | 3,121,084 | [1] | 2,611,206 | [1] | ||||
Non-Reportable Segment - Industrial Properties [Member] | ||||||||
Assets: | ||||||||
Land, buildings and improvement, net | 146,286 | 146,058 | ||||||
Total Assets | 161,301 | [1] | 159,612 | [1] | ||||
Reconciliation to Consolidated Assets: | ||||||||
Total assets allocated to segments | 161,301 | [1] | 159,612 | [1] | ||||
Other unallocated asset: | ||||||||
Total Assets | $ 161,301 | [1] | $ 159,612 | [1] | ||||
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