(EDITOR’S NOTE: The seller was Multi-Employer Property Trust, a Bentall Kennedy open-end commingled real estate equity fund that invests in a diversified portfolio of institutional-quality real estate assets in the United States, and its trustee, the Bethesda, MD-based NewTower Trust Company. The acquisition came in at $760 per square foot. Kilroy expects that it will achieve a mid-six percent yield once it reaches stabilization, which is generally expected around 90 percent occupancy; the property now is 80 percent leased, and one of the tenants is 23andMe, a DNA genetic testing and analsys firm. There is significant re-development poential with this property going forward. The current zoning on the property allow Kilroy to expand the property by more than double the current size of the property, which is now 146,000 square feet.)
Kilroy Realty Corporation (NYSE: KRC) announced today that it acquired 345-349 Oyster Point Boulevard (“Oyster Point Tech Center”), a 146,000 square foot laboratory and office project for approximately $111 million. Oyster Point Tech Center is located on the north end of the burgeoning South San Francisco submarket. The project is comprised of three, two-story buildings and is approximately 80% leased. Two-thirds of the project is leased on a long-term basis to an investment grade, global health care diagnostics company.
South San Francisco is a leading hub for the life science industry and the strongest West Coast life science submarket. It currently has a 2% vacancy rate, demand reaching three million square feet, and modest levels of supply.
“KRC is committed to the strategic growth of our life science platform. This acquisition represents an attractive, off-market opportunity to establish a presence in the premier West Coast life science market while generating strong returns,” said John Kilroy, KRC’s Chairman and Chief Executive Officer.
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 December 31, 2017, the company’s stabilized portfolio totaled approximately 13.7 million square feet of office space located in the coastal regions of Los Angeles, Orange County, San Diego, the San Francisco Bay Area and Greater Seattle and 200 residential units located in the Hollywood submarket of Los Angeles. 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 fourth quarter, the company’s stabilized portfolio was 58% LEED certified and 72% of eligible properties were ENERGY STAR certified. More information is available at http://www.kilroyrealty.com .