LOS ANGELES--(BUSINESS WIRE)--Kilroy Realty Corporation (NYSE: KRC) today announced the purchase of 690 E. Middlefield Road in Mountain View, California, where it will develop, own and manage a 341,000 square-foot office campus under a 15-year lease for Synopsys, Inc. (NASDAQ: SNPS), the global leader in electronic design automation.
The Synopsys office campus represents KRC’s first ground-up development project in the greater San Francisco Bay Area and will have a projected total investment of approximately $200 million. The fully entitled office project includes two five-story Class A office buildings with state-of-the-art infrastructure and amenities, designed and pre-registered to meet LEED Gold certification requirements.
The project is situated in one of the most attractive submarkets in Silicon Valley, nearby such tech giants as Google Inc., Intuit, Inc. and Symantec Corporation. In addition, the property is adjacent to transportation infrastructure with direct, convenient access to both Light Rail and Caltrain and immediately adjacent to Highway 237.
“This build to suit opportunity with a top technology enterprise, located in the heart of Silicon Valley, highlights the success of KRC’s expanding organizational capabilities in high-value West Coast real estate markets from Seattle to San Diego,” said John Kilroy, Jr., the company’s president and chief executive officer.
“We’re now actively leveraging the market knowledge and resources of our enlarged management team and operating platform to extend KRC’s traditional development expertise into new West Coast submarkets. In doing so, we are expanding our opportunities to add properties to our portfolio at investment returns that can be significantly above those achievable solely through acquisition.”
KRC has been an active developer of commercial real estate for most of its 60 plus year history, preferring the heightened control over location, design and amenities, and the potentially higher long term returns that developing new properties can provide under the right market conditions.
Historically, KRC has focused its development in economically dynamic West Coast submarkets with clear long-term demand, habitually limited supply, and high barriers to entry. Much of the company’s current development pipeline is focused on coastal San Diego, where, over the last decade, KRC has established market-leading positions in the region’s principal coastal submarkets from Del Mar and Sorrento Mesa east to the I-15 Corridor.
With the completion of the Synopsys office campus, expected in the first quarter of 2015, KRC’s Bay Area commercial real estate portfolio will total approximately 3.0 million square feet from Silicon Valley to Marin County, with 2.1 million square feet centered in San Francisco’s vibrant South of Market (SOMA) district.
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are based on KRC’s current expectations, beliefs and assumptions, and are not guarantees of future performance, results or events. Forward-looking statements are inherently subject to uncertainties, risks, changes in circumstances, trends and factors that are difficult to predict, many of which are outside of KRC’s control. Accordingly, actual performance, results and events may vary materially from those indicated in forward-looking statements, and you should not rely on forward-looking statements as predictions of future performance, results or events. Numerous factors could cause actual future performance, results and events to differ materially from those indicated in forward-looking statements, including, among others: the ability to successfully complete development and redevelopment projects on schedule and within budgeted amounts; risks associated with investment in real estate assets, which are illiquid, and with trends in the real estate industry; environmental risks; loss of key personnel; government regulations; general economic conditions; and the availability of cash for debt service and exposure of risk of default under debt obligations. These factors are not exhaustive. For a discussion of additional risk factors that could adversely affect KRC’s business and financial performance, see the factors included under the caption “Risk Factors” in KRC’s annual report on Form 10-K for the year ended December 31, 2011, quarterly report on Form 10-Q for the quarter ended March 31, 2012, and KRC’s other filings with the Securities and Exchange Commission. All forward-looking statements are based on currently available information and speak only as of the date on which they are made. KRC assumes no obligation to update any forward-looking statement made in this press release that becomes untrue because of subsequent events, new information or otherwise, except to the extent it is required to do so in connection with its ongoing requirements under Federal securities laws.
Kilroy Realty Corporation, a member of the S&P Small Cap 600 Index, is a real estate investment trust active in premier office and industrial submarkets along the West Coast. For over 60 years, the company has owned, developed, acquired and managed real estate assets, consisting primarily of Class A real estate properties in the coastal regions of Los Angeles, Orange County, San Diego, greater Seattle and the San Francisco Bay Area. At March 31, 2012, the company owned 11.8 million rentable square feet of commercial office space and 3.4 million rentable square feet of industrial space. More information is available at http://www.kilroyrealty.com.