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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:

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.

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.