LOS ANGELES--(BUSINESS WIRE)--Kilroy Realty Corporation (NYSE: KRC) today announced that Dropbox, a leading global collaboration platform, has signed a 15-year lease for 100% of the office space at The Exchange on 16th. The four-building, 750,000 square-foot development by KRC consists of 736,000 square feet of creative office space and 14,000 square feet of retail space. The project is currently under construction in the Mission Bay neighborhood of San Francisco.
Under the terms of the lease, which is the largest single Class A commercial transaction ever completed in San Francisco, Dropbox will take possession in three phases beginning in the fourth quarter of 2018 through the fourth quarter of 2019. KRC's $570 million office project is a prime example of the creative, collaborative and regionally-rooted design the company has become known for. Designed by Rios Clementi Hale Studios, a multidisciplinary design firm based in Los Angeles, The Exchange’s four buildings take cues from the surrounding environment with buildings that are interconnected yet distinct, and materials that bridge the area’s rich history. At the street level, The Exchange creates a fluid outdoor village with deep courtyards, bike plazas, and gardens activated by retail and amenities. The LEED-Platinum design features vast, light-filled open office space that comes to life through framed views, glimpses of adjacent buildings, and rooftop gardens with remarkable views of San Francisco Bay and the City.
“We’re delighted to have Dropbox as our tenant at The Exchange,” said John Kilroy, the company’s Chairman and Chief Executive Officer. “This dynamic organization and their highly skilled workforce inspires us and our design as we look to the future and anticipate the needs of today’s creative workforce. Dropbox’s expansion at The Exchange is an excellent example of the entrepreneurship and innovation that drives San Francisco’s economy and has made the City one of the strongest commercial real estate markets in the world.”
“We’re excited to partner with Kilroy to create a new home for our growing team. The Exchange is a space that will reflect our creative culture and inspire us to continue building great products for our users,” said Drew Houston, Co-Founder and Chief Executive Officer, Dropbox.
The Exchange on 16th is located in Mission Bay, a vibrant neighborhood that has rapidly emerged as one of the most coveted in the City, admired for its interesting mix of residential and retail amenities. Its location, along the 16th Street Corridor adjacent to the 280 Freeway and near Muni’s T–Line, makes it highly accessible and convenient to adjoining residential neighborhoods, including Potrero Hill, the Mission District and Dogpatch. The Exchange is also within walking distance of the San Francisco Giants and new Golden State Warriors stadium along with other world-class entertainment.
About Kilroy Realty Corporation. Kilroy Realty Corporation (KRC), a publicly traded real estate investment trust and member of the S&P MidCap 400 Index, is one of the West Coast’s premier landlords. The company has over 70 years of experience developing, acquiring and managing office and mixed-use real estate assets. The company provides physical work environments that foster creativity and productivity and serves a broad roster of dynamic, innovation-driven tenants, including technology, entertainment, digital media and health care companies.
At June 30, 2017, the company’s stabilized portfolio totaled approximately 14.4 million square feet of office space and 200 residential units located in the coastal regions of Los Angeles, Orange County, San Diego, the San Francisco Bay Area and Greater Seattle. In addition, KRC had four projects totaling approximately 1.8 million square feet of office space, 237 residential units and 96,000 square feet of retail space under construction.
The company has been recognized by GRESB as the North American leader in office sustainability for the last four years and is listed in the Dow Jones Sustainability World Index. At the end of the second quarter, the company’s stabilized portfolio was 52% LEED certified and 71% of eligible properties were ENERGY STAR certified. More information is available at http://www.kilroyrealty.com.
Forward-Looking Statements. This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are based on our current expectations, beliefs and assumptions, and are not guarantees of future performance. Forward-looking statements are inherently subject to uncertainties, risks, changes in circumstances, trends and factors that are difficult to predict, many of which are outside of our control. Accordingly, actual performance, results and events may vary materially from those indicated in the forward-looking statements, and you should not rely on the forward-looking statements as predictions of future performance, results or events. Numerous factors could cause actual future performance, results and events to differ materially from those indicated in the forward-looking statements, including, among others: global market and general economic conditions and their effect on our liquidity and financial conditions and those of our tenants; adverse economic or real estate conditions generally, and specifically, in the States of California and Washington; risks associated with our investment in real estate assets, which are illiquid, and with trends in the real estate industry; defaults on or non-renewal of leases by tenants; any significant downturn in tenants’ businesses; our ability to re-lease property at or above current market rates; costs to comply with government regulations, including environmental remediation; the availability of cash for distribution and debt service and exposure to risk of default under debt obligations; increases in interest rates and our ability to manage interest rate exposure; the availability of financing on attractive terms or at all, which may adversely impact our future interest expense and our ability to pursue development, redevelopment and acquisition opportunities and refinance existing debt; a decline in real estate asset valuations, which may limit our ability to dispose of assets at attractive prices or obtain or maintain debt financing, and which may result in write offs or impairment charges; significant competition, which may decrease the occupancy and rental rates of properties; potential losses that may not be covered by insurance; the ability to successfully complete acquisitions and dispositions on announced terms; the ability to successfully operate acquired, developed and redeveloped properties; the ability to successfully complete development and redevelopment projects on schedule and within budgeted amounts; delays or refusals in obtaining all necessary zoning, land use and other required entitlements, governmental permits and authorizations for our development and redevelopment properties; increases in anticipated capital expenditures, tenant improvement and/or leasing costs; defaults on leases for land on which some of our properties are located; adverse changes to, or implementations of, applicable laws, regulations or legislation; risks associated with joint venture investments, including our lack of sole decision-making authority, our reliance on co-venturers’ financial condition and disputes between us and our co-venturers; environmental uncertainties and risks related to natural disasters; and our ability to maintain our status as a REIT. These factors are not exhaustive and additional factors could adversely affect our business and financial performance. For a discussion of additional factors that could materially adversely affect our business and financial performance, see the factors included under the caption “Risk Factors” in our annual report on Form 10-K for the year ended December 31, 2016 and our 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. We assume no obligation to update any forward-looking statement made in this press release that becomes untrue because of subsequent events, new information or otherwise, except to the extent we are required to do so in connection with our ongoing requirements under federal securities laws.