Build-to-Suit Deal in Mountain View Submarket Expands KRC Development Franchise into San Francisco Bay Area
LOS ANGELES–May. 9, 2012– 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.