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Kilroy Realty Corporation Prices Public Offering of Common Stock

LOS ANGELES--(BUSINESS WIRE)--

Kilroy Realty Corporation (KRC) announced today that it has priced its public offering of 5,000,000 shares of its common stock at a public offering price of $72.10 per share (before deducting underwriting discounts and commissions) in connection with the forward sale agreements described below. The forward purchasers (as defined below) or their respective affiliates have granted the underwriters a 30-day option to purchase up to an additional 750,000 shares of common stock.

Barclays and Citigroup are acting as joint book-running managers of the offering.

The Company has entered into forward sale agreements with affiliates of each of Barclays and Citigroup (in such capacity, the “forward purchasers”) with respect to 5,000,000 shares of the Company’s common stock (or an aggregate of 5,750,000 shares of its common stock if the underwriters exercise their option to purchase additional shares in full). In connection with the forward sale agreements, the forward purchasers or their respective affiliates, at the Company’s request, are expected to borrow from third parties and sell to the underwriters an aggregate of 5,000,000 shares of the Company’s common stock (or an aggregate of 5,750,000 shares of its common stock if the underwriters exercise their option to purchase additional shares in full) for resale by the underwriters in such offering. However, a forward purchaser or its respective affiliate, as applicable, is not required to borrow shares if, after using commercially reasonable efforts, it is unable to borrow such shares, or if borrowing costs exceed a specified threshold or if certain specified conditions have not been satisfied. If any forward purchaser or its respective affiliate, as applicable, does not deliver and sell all of the shares of the Company’s common stock to be sold by it to the underwriters, the Company will issue and sell to the underwriters a number of shares of its common stock equal to the number of shares that such forward purchaser or its respective affiliate, as applicable, does not deliver and sell, and the number of shares underlying the relevant forward sale agreement will be decreased by the number of shares that the Company issues and sells.

The Company will not receive any proceeds from the sale of shares of its common stock by the forward purchasers or their respective affiliates to the underwriters. Instead, subject to its right to elect cash or net share settlement subject to certain conditions, the Company intends to issue and deliver to the forward purchasers, upon physical settlement of such forward sale agreements on one or more dates specified by the Company occurring on or prior to August 1, 2019, an aggregate of 5,000,000 shares of its common stock (or an aggregate of 5,750,000 shares of its common stock if the underwriters exercise their option to purchase additional shares in full) in exchange for cash proceeds per share equal to the applicable forward sale price per share, which will initially be equal to the public offering price per share of common stock in the offering less underwriting discounts and commissions. The initial forward sale price is subject to subsequent adjustments from time to time as provided in the forward sale agreements.

The Company intends to use the net proceeds, if any, it receives upon the settlement of the forward sale agreements for general corporate purposes, which may include funding development projects, acquiring land and properties and repaying outstanding indebtedness, which may include borrowings, if any, under the operating partnership’s revolving credit facility and borrowings under the operating partnership’s term loan facility. Pending application of the net proceeds for those purposes, the operating partnership may temporarily invest such proceeds in marketable securities.

The offering is being made pursuant to an effective shelf registration statement and a prospectus supplement and accompanying prospectus filed by the Company with the Securities and Exchange Commission (“SEC”). The preliminary prospectus supplement and accompanying prospectus related to the offering have been filed with the SEC and are available on the SEC’s website at http://www.sec.gov. When available, copies of the final prospectus supplement and accompanying prospectus for the offering may be obtained by contacting Barclays Capital Inc., via email: barclaysprospectus@broadridge.com, telephone: (888) 603-5847 or standard mail: c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717; or Citigroup Global Markets Inc., via telephone: (800) 831-9146 or standard mail: Attention: Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities nor will there be any offer or sale of these securities in any jurisdiction in which or to any person to whom such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

About Kilroy Realty Corporation. With over 70 years’ experience owning, developing, acquiring and managing real estate assets in West Coast real estate markets, Kilroy Realty Corporation (KRC), a publicly traded real estate investment trust and member of the S&P MidCap 400 Index.

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, as well as business and consumer reactions to such changes; 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, 2017 and in the prospectus supplement and accompanying prospectus related to the offering, as well as our other filings with the SEC that are incorporated by reference in such prospectus supplement and accompanying prospectus. 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.

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