Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Oct. 21, 2016 | |
Entity Registrant Name | KILROY REALTY CORP | |
Entity Central Index Key | 1,025,996 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 92,272,492 | |
Kilroy Realty, L.P. [Member] | ||
Entity Registrant Name | Kilroy Realty, L.P. | |
Entity Central Index Key | 1,493,976 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 | |
REAL ESTATE ASSETS (Note 2): | |||
Land and improvements | $ 1,017,591 | $ 875,794 | |
Buildings and improvements | 4,669,442 | 4,091,012 | |
Undeveloped land and construction in progress | 945,805 | 1,361,340 | |
Total real estate assets held for investment | 6,632,838 | 6,328,146 | |
Accumulated depreciation and amortization | (1,095,562) | (994,241) | |
Total real estate assets held for investment, net | 5,537,276 | 5,333,905 | |
REAL ESTATE ASSETS AND OTHER ASSETS HELD FOR SALE, NET (Note 3) | 9,440 | 117,666 | |
CASH AND CASH EQUIVALENTS (Notes 3 and 7) | 250,523 | 56,508 | |
RESTRICTED CASH (Notes 1 and 3) | 57,501 | 696 | |
MARKETABLE SECURITIES (Note 13) | 14,121 | 12,882 | |
CURRENT RECEIVABLES, NET (Note 5) | 9,709 | 11,153 | |
DEFERRED RENT RECEIVABLES, NET (Note 5) | [1] | 212,204 | 189,704 |
DEFERRED LEASING COSTS AND ACQUISITION-RELATED INTANGIBLE ASSETS, NET (Note 4) | 180,613 | 176,683 | |
PREPAID EXPENSES AND OTHER ASSETS, NET (Note 1) | 60,752 | 27,233 | |
TOTAL ASSETS | 6,332,139 | 5,926,430 | |
LIABILITIES: | |||
Secured debt, net (Notes 1, 6 and 13) | 370,666 | 380,835 | |
Unsecured debt, net (Notes 1, 6 and 13) | 1,846,672 | 1,844,634 | |
Accounts payable, accrued expenses and other liabilities | 252,122 | 246,323 | |
Accrued dividends and distributions (Note 19) | 37,749 | 34,992 | |
Deferred revenue and acquisition-related intangible liabilities, net (Note 4) | 134,436 | 128,156 | |
Rents received in advance and tenant security deposits | 48,518 | 49,361 | |
Liabilities and deferred revenue of real estate assets held for sale (Note 3) | 74 | 7,543 | |
Total liabilities | 2,690,237 | 2,691,844 | |
COMMITMENTS AND CONTINGENCIES (Note 12) | |||
Preferred stock, $.01 par value, 30,000,000 shares authorized: | |||
Common stock, $.01 par value, 150,000,000 shares authorized, 92,272,492 and 92,258,690 shares issued and outstanding, respectively | 923 | 923 | |
Additional paid-in capital | 3,191,718 | 3,047,894 | |
Retained earnings/(distributions in excess of earnings) | 78,107 | (70,262) | |
Total stockholders’ equity | 3,463,159 | 3,170,966 | |
Noncontrolling Interests: | |||
Common units of the Operating Partnership (Note 7) | 93,270 | 57,100 | |
Noncontrolling interests in consolidated property partnerships (Notes 1 and 7) | 85,473 | 6,520 | |
Total noncontrolling interests | 178,743 | 63,620 | |
Total equity | 3,641,902 | 3,234,586 | |
TOTAL LIABILITIES AND EQUITY | 6,332,139 | 5,926,430 | |
6.875% Series G Cumulative Redeemable Preferred stock, $.01 par value, 4,600,000 shares authorized, 4,000,000 shares issued and outstanding ($100,000 liquidation preference) [Member] | |||
Preferred stock, $.01 par value, 30,000,000 shares authorized: | |||
Cumulative Redeemable Preferred stock | 96,155 | 96,155 | |
6.375% Series H Cumulative Redeemable Preferred stock, $.01 par value, 4,000,000 shares authorized, issued and outstanding ($100,000 liquidation preference) [Member] | |||
Preferred stock, $.01 par value, 30,000,000 shares authorized: | |||
Cumulative Redeemable Preferred stock | $ 96,256 | $ 96,256 | |
[1] | Excludes deferred rent receivables related to real estate held for sale at December 31, 2015. |
Consolidated Balance Sheets (U3
Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares issued | 92,272,492 | 92,258,690 |
Common stock, shares outstanding | 92,272,492 | 92,258,690 |
Preferred Stock [Member] | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 30,000,000 | 30,000,000 |
Series G Cumulative Redeemable Preferred Stock [Member] | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 4,600,000 | 4,600,000 |
Preferred stock, shares issued | 4,000,000 | 4,000,000 |
Preferred stock, shares outstanding | 4,000,000 | 4,000,000 |
Preferred stock dividend rate percentage | 6.875% | 6.875% |
Preferred stock liquidation preference | $ 100,000,000 | $ 100,000,000 |
Series H Cumulative Redeemable Preferred Stock [Member] | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 4,000,000 | 4,000,000 |
Preferred stock, shares issued | 4,000,000 | 4,000,000 |
Preferred stock, shares outstanding | 4,000,000 | 4,000,000 |
Preferred stock dividend rate percentage | 6.375% | 6.375% |
Preferred stock liquidation preference | $ 100,000,000 | $ 100,000,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
REVENUES | ||||
Rental income | $ 146,539 | $ 129,510 | $ 423,947 | $ 391,892 |
Tenant reimbursements | 16,406 | 11,681 | 43,948 | 40,280 |
Other property income (Note 14) | 5,403 | 362 | 6,032 | 1,690 |
Total revenues | 168,348 | 141,553 | 473,927 | 433,862 |
EXPENSES | ||||
Property expenses | 30,050 | 26,684 | 85,236 | 78,264 |
Real estate taxes | 14,501 | 12,087 | 39,378 | 37,232 |
Provision for bad debts | 0 | 0 | 0 | 289 |
Ground leases | 909 | 862 | 2,506 | 2,451 |
General and administrative expenses | 13,533 | 10,799 | 40,949 | 36,200 |
Acquisition-related expenses | 188 | 4 | 964 | 397 |
Depreciation and amortization | 56,666 | 49,422 | 160,452 | 152,567 |
Total expenses | 115,847 | 99,858 | 329,485 | 307,400 |
OTHER (EXPENSES) INCOME | ||||
Interest income and other net investment gains (losses) (Note 13) | 538 | (694) | 1,120 | 177 |
Interest expense (Note 6) | (14,976) | (12,819) | (41,189) | (44,561) |
Total other (expenses) income | (14,438) | (13,513) | (40,069) | (44,384) |
INCOME FROM OPERATIONS BEFORE GAINS (LOSSES) ON SALES OF REAL ESTATE | 38,063 | 28,182 | 104,373 | 82,078 |
Net (loss) gain on sales of land (Note 3) | 0 | 0 | (295) | 17,268 |
Gains on sales of depreciable operating properties (Note 3) | 18,312 | 78,522 | 164,302 | 109,950 |
NET INCOME | 56,375 | 106,704 | 268,380 | 209,296 |
Net income attributable to noncontrolling common units of the Operating Partnership (Note 7) | (1,453) | (1,945) | (5,892) | (3,850) |
Net income attributable to noncontrolling interests in consolidated property partnerships (Note 7) | (1,027) | 0 | (1,438) | 0 |
Total income attributable to noncontrolling interests | (2,480) | (1,945) | (7,330) | (3,850) |
NET INCOME ATTRIBUTABLE TO KILROY REALTY CORPORATION | 53,895 | 104,759 | 261,050 | 205,446 |
PREFERRED DIVIDENDS | (3,313) | (3,313) | (9,938) | (9,938) |
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS | $ 50,582 | $ 101,446 | $ 251,112 | $ 195,508 |
Net income available to common stockholders per share – basic (Note 15) (in dollars per share) | $ 0.54 | $ 1.10 | $ 2.71 | $ 2.18 |
Net income available to common stockholders per share – diluted (Note 15) (in dollars per share) | $ 0.54 | $ 1.09 | $ 2.69 | $ 2.17 |
Weighted average common shares outstanding – basic (Note 15) (in shares) | 92,227,016 | 92,150,341 | 92,220,522 | 89,077,012 |
Weighted average common shares outstanding – diluted (Note 15) (in shares) | 92,920,406 | 92,639,065 | 92,831,538 | 89,593,261 |
Dividends declared per common share (in dollars per share) | $ 0.375 | $ 0.35 | $ 1.1 | $ 1.05 |
Consolidated Statements of Equi
Consolidated Statements of Equity (Unaudited) - USD ($) $ in Thousands | Total | Preferred Stock [Member] | Common Stock [Member] | Common Stock Additional Paid-in Capital [Member] | Common Stock Distributions in Excess of Earnings [Member] | Total Stockholders' Equity [Member] | Noncontrolling Interests in Consolidated Property Partnerships and Subsidiaries [Member] |
Beginning balance at Dec. 31, 2014 | $ 2,723,936 | $ 192,411 | $ 863 | $ 2,635,900 | $ (162,964) | $ 2,666,210 | $ 57,726 |
Beginning balance, shares at Dec. 31, 2014 | 86,259,684 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 209,296 | 205,446 | 205,446 | 3,850 | |||
Issuance of common stock during period, shares | 5,640,033 | ||||||
Issuance of common stock | 387,509 | $ 56 | 387,453 | 387,509 | |||
Issuance of share-based compensation awards | 1,268 | 1,268 | 1,268 | ||||
Non-cash amortization of share-based compensation | 13,621 | 13,621 | 13,621 | ||||
Exercise of stock options, shares | 265,000 | ||||||
Exercise of stock options | 11,292 | $ 3 | 11,289 | 11,292 | |||
Repurchase of common stock, stock options and restricted stock units, shares | (39,317) | ||||||
Repurchase of common stock, stock options and restricted stock units | (3,121) | (3,121) | (3,121) | ||||
Settlement of restricted stock units for shares of common stock, shares | 78,937 | ||||||
Settlement of restricted stock units for shares of common stock | 0 | 0 | 0 | ||||
Exchange of common units of the Operating Partnership, shares | 16,030 | ||||||
Exchange of common units of the Operating Partnership | 0 | 467 | 467 | (467) | |||
Adjustment for noncontrolling interest | 0 | (4,547) | (4,547) | 4,547 | |||
Contribution by noncontrolling interest in consolidated subsidiary | 474 | 474 | |||||
Preferred dividends | (9,938) | (9,938) | (9,938) | ||||
Dividends declared per common share and common unit ($1.10 and $1.05 per share/unit for the six months ended 2016 and 2015, respectively) | (97,275) | (95,394) | (95,394) | (1,881) | |||
Ending balance at Sep. 30, 2015 | 3,237,062 | 192,411 | $ 922 | 3,042,330 | (62,850) | 3,172,813 | 64,249 |
Ending balance, shares at Sep. 30, 2015 | 92,220,367 | ||||||
Beginning balance at Dec. 31, 2015 | $ 3,234,586 | 192,411 | $ 923 | 3,047,894 | (70,262) | 3,170,966 | 63,620 |
Beginning balance, shares at Dec. 31, 2015 | 92,258,690 | 92,258,690 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | $ 268,380 | 261,050 | 261,050 | 7,330 | |||
Issuance of share-based compensation awards | 1,339 | 1,339 | 1,339 | ||||
Non-cash amortization of share-based compensation | 19,303 | 19,303 | 19,303 | ||||
Exercise of stock options, shares | 51,000 | ||||||
Exercise of stock options | 2,173 | 2,173 | 2,173 | ||||
Repurchase of common stock, stock options and restricted stock units, shares | (110,528) | ||||||
Repurchase of common stock, stock options and restricted stock units | (6,874) | $ (1) | (6,873) | (6,874) | |||
Settlement of restricted stock units for shares of common stock, shares | 72,130 | ||||||
Settlement of restricted stock units for shares of common stock | 0 | $ 1 | (1) | 0 | |||
Issuance of common units in connection with acquisition (Note 2) | 48,033 | 48,033 | |||||
Exchange of common units of the Operating Partnership, shares | 1,200 | ||||||
Exchange of common units of the Operating Partnership | 0 | 39 | 39 | (39) | |||
Initial contribution from noncontrolling interest in consolidated property partnership, net of transaction costs (Note 7) | 191,676 | 113,022 | 113,022 | 78,654 | |||
Contribution from noncontrolling interest in consolidated property partnership | (1,139) | (1,139) | |||||
Adjustment for noncontrolling interest | 0 | 14,822 | 14,822 | (14,822) | |||
Preferred dividends | (9,938) | (9,938) | (9,938) | ||||
Dividends declared per common share and common unit ($1.10 and $1.05 per share/unit for the six months ended 2016 and 2015, respectively) | (105,637) | (102,743) | (102,743) | (2,894) | |||
Ending balance at Sep. 30, 2016 | $ 3,641,902 | $ 192,411 | $ 923 | $ 3,191,718 | $ 78,107 | $ 3,463,159 | $ 178,743 |
Ending balance, shares at Sep. 30, 2016 | 92,272,492 | 92,272,492 |
Consolidated Statements of Equ6
Consolidated Statements of Equity (Unaudited) (Parenthetical) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Statement of Stockholders' Equity [Abstract] | ||||
Dividends declared per common share and common unit (in dollars per share) | $ 0.375 | $ 0.35 | $ 1.1 | $ 1.05 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 268,380 | $ 209,296 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization of real estate assets and leasing costs | 157,587 | 150,531 |
Depreciation of non-real estate furniture, fixtures and equipment | 2,865 | 2,036 |
Increase in provision for bad debts | 0 | 289 |
Non-cash amortization of share-based compensation awards | 15,263 | 11,272 |
Non-cash amortization of deferred financing costs and debt discounts and premiums | 2,020 | 1,412 |
Non-cash amortization of net below market rents (Note 4) | (5,128) | (6,769) |
Gains on sales of depreciable operating properties (Note 3) | (164,302) | (109,950) |
Loss (gain) on sales of land (Note 3) | 295 | (17,268) |
Non-cash amortization of deferred revenue related to tenant-funded tenant improvements | (9,700) | (9,957) |
Straight-line rents | (22,856) | (35,530) |
Net change in other operating assets | (7,263) | (9,356) |
Net change in other operating liabilities | 15,444 | 16,606 |
Net cash provided by operating activities | 252,605 | 202,612 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Expenditures for development properties and undeveloped land | (222,719) | (311,916) |
Expenditures for acquisition of undeveloped land (Note 2) | (33,513) | (130,609) |
Expenditures for acquisition of operating properties (Note 2) | (55,415) | 0 |
Expenditures for operating properties and other capital assets | (81,688) | (71,756) |
Net proceeds received from dispositions (Note 3) | 325,031 | 319,639 |
(Increase) decrease in restricted cash (Note 3) | (56,805) | 57,776 |
Decrease in acquisition-related deposits | 1,902 | 3,200 |
Increase in note receivable | (1,000) | (3,000) |
Net cash used in investing activities | (124,207) | (136,666) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Borrowings on unsecured revolving credit facility | 305,000 | 250,000 |
Repayments on unsecured revolving credit facility | (305,000) | (390,000) |
Principal payments on secured debt | (7,254) | (67,335) |
Net proceeds from the issuance of unsecured debt (Note 6) | 0 | 397,776 |
Financing costs | (1,485) | (4,534) |
Net proceeds from issuance of common stock | 0 | 387,509 |
Repurchase of common stock and restricted stock units | (6,874) | (3,121) |
Proceeds from exercise of stock options | 2,173 | 11,292 |
Contributions from noncontrolling interests in consolidated property partnerships (Note 7) | 191,676 | 474 |
Distributions to noncontrolling interests in consolidated property partnerships | (1,139) | 0 |
Dividends and distributions paid to common stockholders and common unitholders | (101,542) | (93,910) |
Dividends and distributions paid to preferred stockholders and preferred unitholders | (9,938) | (9,938) |
Net cash provided by financing activities | 65,617 | 478,213 |
Net increase in cash and cash equivalents | 194,015 | 544,159 |
Cash and cash equivalents, beginning of period | 56,508 | 23,781 |
Cash and cash equivalents, end of period | $ 250,523 | $ 567,940 |
Consolidated Balance Sheets (KI
Consolidated Balance Sheets (KILROY REALTY, L.P.) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 | |
REAL ESTATE ASSETS (Note 2): | |||
Land and improvements | $ 1,017,591 | $ 875,794 | |
Buildings and improvements | 4,669,442 | 4,091,012 | |
Undeveloped land and construction in progress | 945,805 | 1,361,340 | |
Total real estate assets held for investment | 6,632,838 | 6,328,146 | |
Accumulated depreciation and amortization | (1,095,562) | (994,241) | |
Total real estate assets held for investment, net | 5,537,276 | 5,333,905 | |
REAL ESTATE ASSETS AND OTHER ASSETS HELD FOR SALE, NET (Note 3) | 9,440 | 117,666 | |
CASH AND CASH EQUIVALENTS (Notes 3 and 8) | 250,523 | 56,508 | |
RESTRICTED CASH (Notes 1 and 3) | 57,501 | 696 | |
MARKETABLE SECURITIES (Note 13) | 14,121 | 12,882 | |
CURRENT RECEIVABLES, NET (Note 5) | 9,709 | 11,153 | |
DEFERRED RENT RECEIVABLES, NET (Note 5) | [1] | 212,204 | 189,704 |
DEFERRED LEASING COSTS AND ACQUISITION-RELATED INTANGIBLE ASSETS, NET (Note 4) | 180,613 | 176,683 | |
PREPAID EXPENSES AND OTHER ASSETS, NET (Note 1) | 60,752 | 27,233 | |
TOTAL ASSETS | 6,332,139 | 5,926,430 | |
LIABILITIES: | |||
Secured debt, net (Notes 1, 6 and 13) | 370,666 | 380,835 | |
Unsecured debt, net (Notes 1, 6 and 13) | 1,846,672 | 1,844,634 | |
Accounts payable, accrued expenses and other liabilities | 252,122 | 246,323 | |
Accrued dividends and distributions (Note 19) | 37,749 | 34,992 | |
Deferred revenue and acquisition-related intangible liabilities, net (Note 4) | 134,436 | 128,156 | |
Rents received in advance and tenant security deposits | 48,518 | 49,361 | |
Liabilities and deferred revenue of real estate assets held for sale (Note 3) | 74 | 7,543 | |
Total liabilities | 2,690,237 | 2,691,844 | |
COMMITMENTS AND CONTINGENCIES (Note 12) | |||
Partners’ Capital (Note 10): | |||
TOTAL LIABILITIES AND EQUITY | 6,332,139 | 5,926,430 | |
Kilroy Realty, L.P. [Member] | |||
REAL ESTATE ASSETS (Note 2): | |||
Land and improvements | 1,017,591 | 875,794 | |
Buildings and improvements | 4,669,442 | 4,091,012 | |
Undeveloped land and construction in progress | 945,805 | 1,361,340 | |
Total real estate assets held for investment | 6,632,838 | 6,328,146 | |
Accumulated depreciation and amortization | (1,095,562) | (994,241) | |
Total real estate assets held for investment, net | 5,537,276 | 5,333,905 | |
REAL ESTATE ASSETS AND OTHER ASSETS HELD FOR SALE, NET (Note 3) | 9,440 | 117,666 | |
CASH AND CASH EQUIVALENTS (Notes 3 and 8) | 250,523 | 56,508 | |
RESTRICTED CASH (Notes 1 and 3) | 57,501 | 696 | |
MARKETABLE SECURITIES (Note 13) | 14,121 | 12,882 | |
CURRENT RECEIVABLES, NET (Note 5) | 9,709 | 11,153 | |
DEFERRED RENT RECEIVABLES, NET (Note 5) | 212,204 | 189,704 | |
DEFERRED LEASING COSTS AND ACQUISITION-RELATED INTANGIBLE ASSETS, NET (Note 4) | 180,613 | 176,683 | |
PREPAID EXPENSES AND OTHER ASSETS, NET (Note 1) | 60,752 | 27,233 | |
TOTAL ASSETS | 6,332,139 | 5,926,430 | |
LIABILITIES: | |||
Secured debt, net (Notes 1, 6 and 13) | 370,666 | 380,835 | |
Unsecured debt, net (Notes 1, 6 and 13) | 1,846,672 | 1,844,634 | |
Accounts payable, accrued expenses and other liabilities | 252,122 | 246,323 | |
Accrued dividends and distributions (Note 19) | 37,749 | 34,992 | |
Deferred revenue and acquisition-related intangible liabilities, net (Note 4) | 134,436 | 128,156 | |
Rents received in advance and tenant security deposits | 48,518 | 49,361 | |
Liabilities and deferred revenue of real estate assets held for sale (Note 3) | 74 | 7,543 | |
Total liabilities | 2,690,237 | 2,691,844 | |
COMMITMENTS AND CONTINGENCIES (Note 12) | |||
Partners’ Capital (Note 10): | |||
Common units, 92,272,492 and 92,258,690 held by the general partner and 2,631,276 and 1,764,775 held by common limited partners issued and outstanding, respectively | 3,359,707 | 3,031,609 | |
Total partners’ capital | 3,552,118 | 3,224,020 | |
Noncontrolling interests in consolidated property partnerships and subsidiaries (Notes 1 and 8) | 89,784 | 10,566 | |
Total capital | 3,641,902 | 3,234,586 | |
TOTAL LIABILITIES AND EQUITY | 6,332,139 | 5,926,430 | |
Kilroy Realty, L.P. [Member] | Series G Cumulative Redeemable Preferred Units [Member] | |||
Partners’ Capital (Note 10): | |||
Cumulative Redeemable Preferred units | 96,155 | 96,155 | |
Kilroy Realty, L.P. [Member] | Series H Cumulative Redeemable Preferred Units [Member] | |||
Partners’ Capital (Note 10): | |||
Cumulative Redeemable Preferred units | $ 96,256 | $ 96,256 | |
[1] | Excludes deferred rent receivables related to real estate held for sale at December 31, 2015. |
Consolidated Balance Sheets (K9
Consolidated Balance Sheets (KILROY REALTY, L.P.) (Parenthetical) - Kilroy Realty, L.P. [Member] - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Series G Cumulative Redeemable Preferred Units [Member] | ||
Preferred units, issued | 4,000,000 | 4,000,000 |
Preferred units, outstanding | 4,000,000 | 4,000,000 |
Preferred stock dividend rate percentage | 6.875% | 6.875% |
Preferred stock liquidation preference | $ 100,000,000 | $ 100,000,000 |
Series H Cumulative Redeemable Preferred Units [Member] | ||
Preferred units, issued | 4,000,000 | 4,000,000 |
Preferred units, outstanding | 4,000,000 | 4,000,000 |
Preferred stock dividend rate percentage | 6.375% | 6.375% |
Preferred stock liquidation preference | $ 100,000,000 | $ 100,000,000 |
Common Units [Member] | ||
General partner, units issued | 92,272,492 | 92,258,690 |
General partners, units outstanding | 92,272,492 | 92,258,690 |
Limited partners, units issued | 2,631,276 | 1,764,775 |
Noncontrolling common units of the Operating Partnership | 2,631,276 | 1,764,775 |
Consolidated Statements of Op10
Consolidated Statements of Operations (KILROY REALTY, L.P.) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
REVENUES | ||||
Rental income | $ 146,539 | $ 129,510 | $ 423,947 | $ 391,892 |
Tenant reimbursements | 16,406 | 11,681 | 43,948 | 40,280 |
Other property income (Note 14) | 5,403 | 362 | 6,032 | 1,690 |
Total revenues | 168,348 | 141,553 | 473,927 | 433,862 |
EXPENSES | ||||
Property expenses | 30,050 | 26,684 | 85,236 | 78,264 |
Real estate taxes | 14,501 | 12,087 | 39,378 | 37,232 |
Provision for bad debts | 0 | 0 | 0 | 289 |
Ground leases | 909 | 862 | 2,506 | 2,451 |
General and administrative expenses | 13,533 | 10,799 | 40,949 | 36,200 |
Acquisition-related expenses | 188 | 4 | 964 | 397 |
Depreciation and amortization | 56,666 | 49,422 | 160,452 | 152,567 |
Total expenses | 115,847 | 99,858 | 329,485 | 307,400 |
OTHER (EXPENSES) INCOME | ||||
Interest income and other net investment gains (losses) (Note 13) | 538 | (694) | 1,120 | 177 |
Interest expense (Note 6) | (14,976) | (12,819) | (41,189) | (44,561) |
Total other (expenses) income | (14,438) | (13,513) | (40,069) | (44,384) |
Net (loss) gain on sales of land (Note 3) | 0 | 0 | (295) | 17,268 |
Gains on sales of depreciable operating properties (Note 3) | 18,312 | 78,522 | 164,302 | 109,950 |
NET INCOME | 56,375 | 106,704 | 268,380 | 209,296 |
Net income attributable to noncontrolling interests in consolidated property partnerships and subsidiaries (Notes 1 and 8) | (2,480) | (1,945) | (7,330) | (3,850) |
NET INCOME ATTRIBUTABLE TO KILROY REALTY CORPORATION | 53,895 | 104,759 | 261,050 | 205,446 |
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS | $ 50,582 | $ 101,446 | $ 251,112 | $ 195,508 |
Net income available to common unitholders per unit-basic (Note 16) (in dollars per unit) | $ 0.54 | $ 1.10 | $ 2.71 | $ 2.18 |
Net income available to common unitholders per unit-diluted (Note 16) (in dollars per unit) | $ 0.54 | $ 1.09 | $ 2.69 | $ 2.17 |
Weighted average common units outstanding - basic (Note 16) (in units) | 92,227,016 | 92,150,341 | 92,220,522 | 89,077,012 |
Weighted average common units outstanding - diluted (Note 16) (in units) | 92,920,406 | 92,639,065 | 92,831,538 | 89,593,261 |
Kilroy Realty, L.P. [Member] | ||||
REVENUES | ||||
Rental income | $ 146,539 | $ 129,510 | $ 423,947 | $ 391,892 |
Tenant reimbursements | 16,406 | 11,681 | 43,948 | 40,280 |
Other property income (Note 14) | 5,403 | 362 | 6,032 | 1,690 |
Total revenues | 168,348 | 141,553 | 473,927 | 433,862 |
EXPENSES | ||||
Property expenses | 30,050 | 26,684 | 85,236 | 78,264 |
Real estate taxes | 14,501 | 12,087 | 39,378 | 37,232 |
Provision for bad debts | 0 | 0 | 0 | 289 |
Ground leases | 909 | 862 | 2,506 | 2,451 |
General and administrative expenses | 13,533 | 10,799 | 40,949 | 36,200 |
Acquisition-related expenses | 188 | 4 | 964 | 397 |
Depreciation and amortization | 56,666 | 49,422 | 160,452 | 152,567 |
Total expenses | 115,847 | 99,858 | 329,485 | 307,400 |
OTHER (EXPENSES) INCOME | ||||
Interest income and other net investment gains (losses) (Note 13) | 538 | (694) | 1,120 | 177 |
Interest expense (Note 6) | (14,976) | (12,819) | (41,189) | (44,561) |
Total other (expenses) income | (14,438) | (13,513) | (40,069) | (44,384) |
INCOME FROM OPERATIONS BEFORE GAINS (LOSSES) ON SALES OF REAL ESTATE | 38,063 | 28,182 | 104,373 | 82,078 |
Net (loss) gain on sales of land (Note 3) | 0 | 0 | (295) | 17,268 |
Gains on sales of depreciable operating properties (Note 3) | 18,312 | 78,522 | 164,302 | 109,950 |
NET INCOME | 56,375 | 106,704 | 268,380 | 209,296 |
Net income attributable to noncontrolling interests in consolidated property partnerships and subsidiaries (Notes 1 and 8) | (1,121) | (64) | (1,703) | (211) |
NET INCOME ATTRIBUTABLE TO KILROY REALTY CORPORATION | 55,254 | 106,640 | 266,677 | 209,085 |
PREFERRED DISTRIBUTIONS | (3,313) | (3,313) | (9,938) | (9,938) |
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS | $ 51,941 | $ 103,327 | $ 256,739 | $ 199,147 |
Net income available to common unitholders per unit-basic (Note 16) (in dollars per unit) | $ 0.54 | $ 1.10 | $ 2.70 | $ 2.18 |
Net income available to common unitholders per unit-diluted (Note 16) (in dollars per unit) | $ 0.54 | $ 1.09 | $ 2.68 | $ 2.17 |
Weighted average common units outstanding - basic (Note 16) (in units) | 94,858,292 | 93,938,783 | 94,630,183 | 90,869,696 |
Weighted average common units outstanding - diluted (Note 16) (in units) | 95,551,682 | 94,427,507 | 95,241,199 | 91,385,945 |
Dividends declared per common unit (in dollars per unit) | $ 0.375 | $ 0.35 | $ 1.1 | $ 1.05 |
Consolidated Statements of Capi
Consolidated Statements of Capital (KILROY REALTY, L.P.) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income | $ 56,375 | $ 106,704 | $ 268,380 | $ 209,296 |
Non-cash amortization of share-based compensation | 19,303 | 13,621 | ||
Settlement of restricted stock units | 0 | 0 | ||
Initial contribution from noncontrolling interest in consolidated property partnership, net of transaction costs (Note 8) | 191,676 | |||
Contribution from noncontrolling interest in consolidated property partnership | 474 | |||
Contribution from noncontrolling interest in consolidated property partnership | (1,139) | |||
Preferred distributions | (9,938) | (9,938) | ||
Noncontrolling Interests in Consolidated Property Partnerships and Subsidiaries [Member] | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income | 7,330 | 3,850 | ||
Initial contribution from noncontrolling interest in consolidated property partnership, net of transaction costs (Note 8) | 78,654 | |||
Contribution from noncontrolling interest in consolidated property partnership | 474 | |||
Contribution from noncontrolling interest in consolidated property partnership | (1,139) | |||
Kilroy Realty, L.P. [Member] | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning balance | 3,234,586 | 2,723,936 | ||
Net income | 56,375 | 106,704 | 268,380 | 209,296 |
Issuance of common units | 387,509 | |||
Issuance of common units in connection with acquisition (Note 2) | 48,033 | |||
Issuance of share-based compensation awards | 1,339 | 1,268 | ||
Non-cash amortization of share-based compensation | 19,303 | 13,621 | ||
Exercise of stock options | 2,173 | 11,292 | ||
Repurchase of common units, stock options and restricted stock units | (6,874) | (3,121) | ||
Settlement of restricted stock units | 0 | 0 | ||
Initial contribution from noncontrolling interest in consolidated property partnership, net of transaction costs (Note 8) | 191,676 | |||
Contribution from noncontrolling interest in consolidated property partnership | 474 | |||
Contribution from noncontrolling interest in consolidated property partnership | (1,139) | |||
Preferred distributions | (9,938) | (9,938) | ||
Distributions declared per common unit ($1.10 and $1.05 per unit for the six months ended 2016 and 2015, respectively) | (105,637) | (97,275) | ||
Ending balance | 3,641,902 | 3,237,062 | 3,641,902 | 3,237,062 |
Kilroy Realty, L.P. [Member] | Partners Capital Preferred Units [Member] | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning balance | 192,411 | 192,411 | ||
Ending balance | 192,411 | 192,411 | 192,411 | 192,411 |
Kilroy Realty, L.P. [Member] | Partners Capital Common Unit [Member] | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning balance | $ 3,031,609 | $ 2,521,900 | ||
Beginning balance, units | 94,023,465 | 88,063,884 | ||
Net income | $ 266,677 | $ 209,085 | ||
Issuance of common units, units | 5,640,033 | |||
Issuance of common units | $ 387,509 | |||
Issuance of common units in connection with acquisition (Note 2), units | 867,701 | |||
Issuance of common units in connection with acquisition (Note 2) | $ 48,033 | |||
Issuance of share-based compensation awards | 1,339 | 1,268 | ||
Non-cash amortization of share-based compensation | $ 19,303 | $ 13,621 | ||
Exercise of stock options, units | 51,000 | 265,000 | ||
Exercise of stock options | $ 2,173 | $ 11,292 | ||
Repurchase of common units and restricted stock units, units | (110,528) | (39,317) | ||
Repurchase of common units, stock options and restricted stock units | $ (6,874) | $ (3,121) | ||
Settlement of restricted stock units, units | 72,130 | 78,937 | ||
Settlement of restricted stock units | $ 0 | $ 0 | ||
Initial contribution from noncontrolling interest in consolidated property partnership, net of transaction costs (Note 8) | 113,022 | |||
Preferred distributions | (9,938) | (9,938) | ||
Distributions declared per common unit ($1.10 and $1.05 per unit for the six months ended 2016 and 2015, respectively) | (105,637) | (97,275) | ||
Ending balance | $ 3,359,707 | $ 3,034,341 | $ 3,359,707 | $ 3,034,341 |
Ending balance, units | 94,903,768 | 94,008,537 | 94,903,768 | 94,008,537 |
Kilroy Realty, L.P. [Member] | Total Partners Capital [Member] | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning balance | $ 3,224,020 | $ 2,714,311 | ||
Net income | 266,677 | 209,085 | ||
Issuance of common units | 387,509 | |||
Issuance of common units in connection with acquisition (Note 2) | 48,033 | |||
Issuance of share-based compensation awards | 1,339 | 1,268 | ||
Non-cash amortization of share-based compensation | 19,303 | 13,621 | ||
Exercise of stock options | 2,173 | 11,292 | ||
Repurchase of common units, stock options and restricted stock units | (6,874) | (3,121) | ||
Settlement of restricted stock units | 0 | 0 | ||
Initial contribution from noncontrolling interest in consolidated property partnership, net of transaction costs (Note 8) | 113,022 | |||
Preferred distributions | (9,938) | (9,938) | ||
Distributions declared per common unit ($1.10 and $1.05 per unit for the six months ended 2016 and 2015, respectively) | (105,637) | (97,275) | ||
Ending balance | $ 3,552,118 | $ 3,226,752 | 3,552,118 | 3,226,752 |
Kilroy Realty, L.P. [Member] | Noncontrolling Interests in Consolidated Property Partnerships and Subsidiaries [Member] | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Beginning balance | 10,566 | 9,625 | ||
Net income | 1,703 | 211 | ||
Initial contribution from noncontrolling interest in consolidated property partnership, net of transaction costs (Note 8) | 78,654 | |||
Contribution from noncontrolling interest in consolidated property partnership | 474 | |||
Contribution from noncontrolling interest in consolidated property partnership | (1,139) | |||
Ending balance | $ 89,784 | $ 10,310 | $ 89,784 | $ 10,310 |
Consolidated Statements of Ca12
Consolidated Statements of Capital (KILROY REALTY, L.P.) (Parenthetical) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Kilroy Realty, L.P. [Member] | ||||
Dividends declared per common unit (in dollars per unit) | $ 0.375 | $ 0.35 | $ 1.1 | $ 1.05 |
Consolidated Statements of Ca13
Consolidated Statements of Cash Flows (KILROY REALTY, L.P.) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 268,380 | $ 209,296 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization of real estate assets and leasing costs | 157,587 | 150,531 |
Depreciation of non-real estate furniture, fixtures and equipment | 2,865 | 2,036 |
Increase in provision for bad debts | 0 | 289 |
Non-cash amortization of share-based compensation awards | 15,263 | 11,272 |
Non-cash amortization of deferred financing costs and debt discounts and premiums | 2,020 | 1,412 |
Non-cash amortization of net below market rents (Note 4) | (5,128) | (6,769) |
Gains on sales of depreciable operating properties (Note 3) | (164,302) | (109,950) |
Loss (gain) on sales of land (Note 3) | 295 | (17,268) |
Non-cash amortization of deferred revenue related to tenant-funded tenant improvements | (9,700) | (9,957) |
Straight-line rents | (22,856) | (35,530) |
Net change in other operating assets | (7,263) | (9,356) |
Net change in other operating liabilities | 15,444 | 16,606 |
Net cash provided by operating activities | 252,605 | 202,612 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Expenditures for development properties and undeveloped land | (222,719) | (311,916) |
Expenditures for acquisition of undeveloped land (Note 2) | (33,513) | (130,609) |
Expenditures for acquisition of operating properties (Note 2) | (55,415) | 0 |
Expenditures for operating properties and other capital assets | (81,688) | (71,756) |
Net proceeds received from dispositions (Note 3) | 325,031 | 319,639 |
(Increase) decrease in restricted cash (Note 3) | (56,805) | 57,776 |
Decrease in acquisition-related deposits | 1,902 | 3,200 |
Increase in note receivable | (1,000) | (3,000) |
Net cash used in investing activities | (124,207) | (136,666) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Borrowings on unsecured revolving credit facility | 305,000 | 250,000 |
Repayments on unsecured revolving credit facility | (305,000) | (390,000) |
Principal payments on secured debt | (7,254) | (67,335) |
Net proceeds from the issuance of unsecured debt (Note 6) | 0 | 397,776 |
Financing costs | (1,485) | (4,534) |
Repurchase of common stock and restricted stock units | (6,874) | (3,121) |
Proceeds from exercise of stock options | 2,173 | 11,292 |
Contributions from noncontrolling interests in consolidated property partnerships (Note 8) | 191,676 | 474 |
Distributions to noncontrolling interests in consolidated property partnerships | (1,139) | 0 |
Dividends and distributions paid to common stockholders and common unitholders | (101,542) | (93,910) |
Dividends and distributions paid to preferred stockholders and preferred unitholders | (9,938) | (9,938) |
Net cash provided by financing activities | 65,617 | 478,213 |
Net increase in cash and cash equivalents | 194,015 | 544,159 |
Cash and cash equivalents, beginning of period | 56,508 | 23,781 |
Cash and cash equivalents, end of period | 250,523 | 567,940 |
Kilroy Realty, L.P. [Member] | ||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | 268,380 | 209,296 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization of real estate assets and leasing costs | 157,587 | 150,531 |
Depreciation of non-real estate furniture, fixtures and equipment | 2,865 | 2,036 |
Increase in provision for bad debts | 0 | 289 |
Non-cash amortization of share-based compensation awards | 15,263 | 11,272 |
Non-cash amortization of deferred financing costs and debt discounts and premiums | 2,020 | 1,412 |
Non-cash amortization of net below market rents (Note 4) | (5,128) | (6,769) |
Gains on sales of depreciable operating properties (Note 3) | (164,302) | (109,950) |
Loss (gain) on sales of land (Note 3) | 295 | (17,268) |
Non-cash amortization of deferred revenue related to tenant-funded tenant improvements | (9,700) | (9,957) |
Straight-line rents | (22,856) | (35,530) |
Net change in other operating assets | (7,263) | (9,356) |
Net change in other operating liabilities | 15,444 | 16,606 |
Net cash provided by operating activities | 252,605 | 202,612 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Expenditures for development properties and undeveloped land | (222,719) | (311,916) |
Expenditures for acquisition of undeveloped land (Note 2) | (33,513) | (130,609) |
Expenditures for acquisition of operating properties (Note 2) | (55,415) | 0 |
Expenditures for operating properties and other capital assets | (81,688) | (71,756) |
Net proceeds received from dispositions (Note 3) | 325,031 | 319,639 |
(Increase) decrease in restricted cash (Note 3) | (56,805) | 57,776 |
Decrease in acquisition-related deposits | 1,902 | 3,200 |
Increase in note receivable | (1,000) | |
Net cash used in investing activities | (124,207) | (136,666) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Borrowings on unsecured revolving credit facility | 305,000 | 250,000 |
Repayments on unsecured revolving credit facility | (305,000) | (390,000) |
Principal payments on secured debt | (7,254) | (67,335) |
Net proceeds from the issuance of unsecured debt (Note 6) | 0 | 397,776 |
Financing costs | (1,485) | (4,534) |
Net proceeds from issuance of common stock | 0 | 387,509 |
Repurchase of common stock and restricted stock units | (6,874) | (3,121) |
Proceeds from exercise of stock options | 2,173 | 11,292 |
Contributions from noncontrolling interests in consolidated property partnerships (Note 8) | 191,676 | 474 |
Distributions to noncontrolling interests in consolidated property partnerships | (1,139) | 0 |
Dividends and distributions paid to common stockholders and common unitholders | (101,542) | (93,910) |
Dividends and distributions paid to preferred stockholders and preferred unitholders | (9,938) | (9,938) |
Net cash provided by financing activities | 65,617 | 478,213 |
Net increase in cash and cash equivalents | 194,015 | 544,159 |
Cash and cash equivalents, beginning of period | 56,508 | 23,781 |
Cash and cash equivalents, end of period | $ 250,523 | $ 567,940 |
Organization and Basis of Prese
Organization and Basis of Presentation | 9 Months Ended |
Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Presentation | Organization and Basis of Presentation Organization Kilroy Realty Corporation (the “Company”) is a self-administered real estate investment trust (“REIT”) active in premier office submarkets along the West Coast. We own, develop, acquire and manage real estate assets, consisting primarily of Class A properties in the coastal regions of Los Angeles, Orange County, San Diego County, the San Francisco Bay Area and Greater Seattle, which we believe have strategic advantages and strong barriers to entry. Class A real estate encompasses attractive and efficient buildings of high quality that are attractive to tenants, are well-designed and constructed with above-average material, workmanship and finishes and are well-maintained and managed. We qualify as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”). The Company’s common stock is publicly traded on the New York Stock Exchange (“NYSE”) under the ticker symbol “KRC.” We own our interests in all of our real estate assets through Kilroy Realty, L.P. (the “Operating Partnership”) and Kilroy Realty Finance Partnership, L.P. (the “Finance Partnership”). We generally conduct substantially all of our operations through the Operating Partnership. Unless stated otherwise or the context indicates otherwise, the terms “Kilroy Realty Corporation” or the “Company,” “we,” “our,” and “us” refer to Kilroy Realty Corporation and its consolidated subsidiaries and the term “Operating Partnership” refers to Kilroy Realty, L.P. and its consolidated subsidiaries. The descriptions of our business, employees and properties apply to both the Company and the Operating Partnership. Our stabilized portfolio of operating properties was comprised of the following office properties at September 30, 2016 : Number of Buildings Rentable Square Feet Number of Tenants Percentage Occupied Stabilized Office Properties 101 13,605,597 530 96.6 % Our stabilized office portfolio includes all of our properties with the exception of development and redevelopment properties currently under construction or committed for construction, “lease-up” properties, real estate assets held for sale, undeveloped land and our recently completed residential property. We define redevelopment properties as those properties for which we expect to spend significant development and construction costs on the existing or acquired buildings pursuant to a formal plan, the intended result of which is a higher economic return on the property. We define “lease-up” properties as office properties we recently developed or redeveloped that have not yet reached 95% occupancy and are within one year following cessation of major construction activities. During the nine months ended September 30, 2016 , we stabilized two development projects consisting of 455,340 rentable square feet and 185,602 rentable square feet in San Francisco, California, which were included in our stabilized office portfolio as of September 30, 2016 . As of September 30, 2016 , the following properties, in addition to our recently completed residential property, were excluded from our stabilized office portfolio. We did not have any redevelopment properties at September 30, 2016 . Number of Properties/Projects Estimated Rentable Square Feet (1) Properties held for sale (2) 1 67,995 Development projects in “ lease-up ” 2 450,000 Development projects under construction 1 700,000 ________________________ (1) Estimated rentable square feet upon completion. (2) See Note 3 “Dispositions and Real Estate Assets Held for Sale” for additional information. Our stabilized office portfolio also excludes our near-term and future development pipeline, which as of September 30, 2016 was comprised of eight development sites, representing approximately 70 gross acres of undeveloped land. As of September 30, 2016 , we owned 100% of our properties and development projects, excluding three office properties owned by two consolidated property partnerships. One property partnership, 100 First Street Member, LLC (“100 First LLC”), owned one office property through a subsidiary REIT (see Notes 7 and 8 for additional information). The other property partnership, Redwood City Partners, LLC (“Redwood LLC”) owned two office properties. Both property partnerships are consolidated entities. As of September 30, 2016 , all of our properties and development projects were owned and all of our business was conducted in the state of California with the exception of twelve office properties and one future development project located in the state of Washington. Ownership and Basis of Presentation The consolidated financial statements of the Company include the consolidated financial position and results of operations of the Company, the Operating Partnership, the Finance Partnership, KSLLC, 100 First LLC, Redwood LLC and all of our wholly-owned and controlled subsidiaries. The consolidated financial statements of the Operating Partnership include the consolidated financial position and results of operations of the Operating Partnership, the Finance Partnership, KSLLC, Redwood LLC, 100 First LLC and all wholly-owned and controlled subsidiaries of the Operating Partnership. All intercompany balances and transactions have been eliminated in the consolidated financial statements. As of September 30, 2016 , the Company owned an approximate 97.2% common general partnership interest in the Operating Partnership. The remaining approximate 2.8% common limited partnership interest in the Operating Partnership as of September 30, 2016 , was owned by non-affiliated investors and certain of our executive officers and directors (see Note 7). Both the general and limited common partnership interests in the Operating Partnership are denominated in common units. Generally, the number of common units held by the Company is equivalent to the number of outstanding shares of the Company’s common stock, and the rights of all the common units to quarterly distributions and payments in liquidation mirror those of the Company’s common stockholders. The common limited partners have certain redemption rights as provided in the Operating Partnership’s Seventh Amended and Restated Agreement of Limited Partnership, as amended, the “Partnership Agreement” (see Note 7). Kilroy Realty Finance, Inc., which is a wholly-owned subsidiary of the Company, is the sole general partner of the Finance Partnership and owns a 1.0% common general partnership interest in the Finance Partnership. The Operating Partnership owns the remaining 99.0% common limited partnership interest. Kilroy Services, LLC (“KSLLC”), which is a wholly-owned subsidiary of the Operating Partnership, is the entity through which we generally conduct substantially all of our development activities. As of September 30, 2016 , the Company owned an approximate 56% equity interest in 100 First LLC. The remaining interest was owned by an unrelated third party. As of September 30, 2016 , the Company owned an approximate 93% equity interest in Redwood LLC. The remaining interest was owned by an unrelated third party. With the exception of the Operating Partnership, Redwood LLC and 100 First LLC, all of our subsidiaries are wholly-owned. The accompanying interim financial statements have been prepared by management in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and in conjunction with the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures required for annual financial statements have been condensed or excluded pursuant to SEC rules and regulations. Accordingly, the interim financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the accompanying interim financial statements reflect all adjustments of a normal and recurring nature that are considered necessary for a fair presentation of the results for the interim periods presented. However, the results of operations for the interim periods are not necessarily indicative of the results that may be expected for the year ending December 31, 2016 . The interim financial statements for the Company and the Operating Partnership should be read in conjunction with the audited consolidated financial statements and notes thereto included in our annual report on Form 10-K for the year ended December 31, 2015 . Adoption of New Accounting Pronouncements Variable Interest Entities Effective January 1, 2016, the Company adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) No. 2015-02 (“ASU 2015-02”), which amended certain guidance with respect to the evaluation of Variable Interest Entities (“VIEs”) and when a reporting entity is required to consolidate certain legal entities. Specifically, the amendments: (i) modify the evaluation of whether limited partnerships and similar legal entities are VIEs or voting interest entities, (ii) eliminate the presumption that a general partner should consolidate a limited partnership, (iii) affect the consolidation analysis of reporting entities that are involved with VIEs, and (iv) provide a scope exception for certain entities. Under the new guidance, effective January 1, 2016, the Operating Partnership was determined to be a VIE of the Company as the Operating Partnership is a limited partnership in which the common limited partners do not have substantive kick-out rights or participating rights. However, given that the Company was deemed to be the primary beneficiary of the Operating Partnership because the Company has the ability to control the activities that most significantly impact the Operating Partnership's economic performance, the adoption of this new guidance and the conclusion that the Operating Partnership was a VIE did not have any impact on our consolidated financial statements since the conclusion to consolidate the Operating Partnership still applied. The Operating Partnership was the only new VIE identified as part of the adoption of the guidance as of January 1, 2016. At September 30, 2016 , the consolidated financial statements of the Company included one VIE in addition to the Operating Partnership, 100 First LLC (see Note 7 for further discussion of the formation transaction for this VIE), and the consolidated financial statements of the Operating Partnership included only one VIE, 100 First LLC. The Operating Partnership was determined to be the primary beneficiary of 100 First LLC because it has the ability to control the activities that most significantly impact the VIE’s economic performance. As of September 30, 2016 , the VIE’s total assets, liabilities and noncontrolling interest included on our consolidated balance sheet were approximately $191.3 million (of which $173.2 million related to real estate held for investment), approximately $11.8 million and approximately $79.0 million , respectively. Revenues, income and net assets generated by 100 First LLC may only be used to settle its contractual obligations, which primarily consist of operating expenses, capital expenditures and required distributions. At December 31, 2015 , the consolidated financial statements of the Company and the Operating Partnership included two VIEs in which we were deemed to be the primary beneficiary: Redwood LLC and one other VIE to facilitate a potential future Section 1031 Exchange to defer taxable gains on property dispositions for federal income tax purposes. At December 31, 2015 , the impact of consolidating the VIEs increased the Company’s total assets, liabilities and noncontrolling interests by approximately $203.3 million (of which $187.3 million related to real estate held for investment on our consolidated balance sheet), approximately $28.8 million and approximately $6.5 million , respectively. During the nine months ended September 30, 2016 , Redwood LLC had a VIE reconsideration event and was determined to no longer be a VIE and the VIE to facilitate a potential future Section 1031 Exchange was terminated. Reclassification of Debt Issuance Costs Effective January 1, 2016, the Company adopted FASB ASU No. 2015-03 and No. 2015-15, which requires that debt issuance costs related to a recognized debt liability be presented on the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. However, for line-of-credit arrangements, entities may defer and present debt issuance costs as an asset and amortize the costs ratably over the term of the line of credit arrangement, regardless of whether there are any outstanding borrowings on the line of credit arrangement. As a result of our adoption of the guidance, $1.1 million of deferred financing costs as of December 31, 2015 were reclassified to reduce secured debt, net and $12.0 million of deferred financing costs as of December 31, 2015 were reclassified to reduce unsecured debt, net in the December 31, 2015 balances on our consolidated balance sheets. In addition, $4.6 million of deferred financing costs relating to our unsecured line of credit as of December 31, 2015 were reclassified to prepaid expenses and other assets, net in the December 31, 2015 balances on our consolidated balance sheets. The guidance did not have a material impact on our consolidated financial statements. Recently Issued Accounting Pronouncements On August 26, 2016, the FASB issued ASU No. 2016-15 (“ASU 2016-15”) to provide guidance for areas where there is diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. ASU 2016-15 is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company does not currently anticipate that the guidance will have a material impact on our consolidated financial statements or notes to our consolidated financial statements. On June 16, 2016, the FASB issued ASU No. 2016-13 (“ASU 2016-13”) to amend the accounting for credit losses for certain financial instruments. Under the new guidance, an entity recognizes its estimate of expected credit losses as an allowance, which the FASB believes will result in more timely recognition of such losses. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company does not currently anticipate that the guidance will have a material impact on our consolidated financial statements or notes to our consolidated financial statements. On May 9, 2016, the FASB issued ASU No. 2016-12, which clarifies and provides practical expedients for certain aspects of ASU No. 2014-09, which outlines a single comprehensive model for entities to use in accounting for revenues arising from contracts with customers and notes that lease contracts with customers are a scope exception. Public business entities may elect to adopt the amendments as of the original effective date; however, adoption is required for annual reporting periods beginning after December 15, 2017. The Company is currently assessing the impact of the guidance on our consolidated financial statements and notes to our consolidated financial statements. On March 30, 2016, the FASB issued ASU No. 2016-09 (“ASU 2016-09”) to amend the accounting guidance for share-based payment accounting. The areas for simplification in ASU 2016-09 involve several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 is effective for annual periods beginning after December 15, 2016 and interim periods within those annual periods and early adoption is permitted. The Company does not currently anticipate that the guidance will have a material impact on our consolidated financial statements or notes to our consolidated financial statements. On February 25, 2016, the FASB issued ASU No. 2016-02 (“ASU 2016-02”) to amend the accounting guidance for leases. The accounting applied by a lessor is largely unchanged under ASU 2016-02. However, the standard requires lessees to recognize lease assets and lease liabilities for leases classified as operating leases on the balance sheet. Lessees will recognize in the statement of financial position a liability to make lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. If a lessee makes this election, it will recognize lease expense for such leases generally on a straight-line basis over the lease term. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018 and early adoption is permitted. The Company is currently assessing the impact of the guidance on our consolidated financial statements and notes to our consolidated financial statements. On January 5, 2016, the FASB issued ASU No. 2016-01 (“ASU 2016-01”) to amend the accounting guidance on the classification and measurement of financial instruments. The standard requires that all investments in equity securities, including other ownership interests, are carried at fair value through net income. This requirement does not apply to investments that qualify for equity method accounting or to those that result in consolidation of the investee or for which the entity has elected the predictability exception to fair value measurement. Additionally, the standard requires that the portion of the total fair value change caused by a change in instrument-specific credit risk for financial liabilities for which the fair value option has been elected would be recognized in other comprehensive income. Any accumulated amount remaining in other comprehensive income is reclassified to earnings when the liability is extinguished. ASU 2016-01 is effective for fiscal years beginning after December 15, 2017. The Company does not currently anticipate that the guidance will have a material impact on our consolidated financial statements or notes to our consolidated financial statements. |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2016 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions Operating Property Acquisitions During the nine months ended September 30, 2016 , we acquired the one operating property listed below from an unrelated third party. The acquisition was funded with proceeds from the Company’s unsecured revolving credit facility as well as proceeds from our capital recycling program. Property Date of Acquisition Number of Buildings Rentable Square Feet (unaudited) Purchase Price (in millions) (1) 1290-1300 Terra Bella Avenue, Mountain View, CA June 8, 2016 1 114,175 $ 55.4 ________________________ (1) In connection with this acquisition, we assumed $0.2 million in accrued liabilities that are not included in the purchase price above. The related assets, liabilities and results of operations of the acquired property are included in the consolidated financial statements as of the date of acquisition. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed as of the date of acquisition: Total 2016 Operating Property Acquisitions (1) Assets Land and improvements $ 28,730 Buildings and improvements (2) 27,555 Deferred leasing costs and acquisition-related intangible assets (3) 4,180 Total assets acquired 60,465 Liabilities Accounts payable, accrued expenses and other liabilities 170 Deferred revenue and acquisition-related intangible liabilities (4) 4,880 Total liabilities assumed 5,050 Net assets and liabilities acquired $ 55,415 ________________________ (1) The purchase price of the acquisition completed during the nine months ended September 30, 2016 was less than 5% of the Company’s total assets as of September 30, 2016 . (2) Represents buildings, building improvements and tenant improvements. (3) Represents in-place leases (approximately $2.5 million with a weighted average amortization period of 3.6 years) and leasing commissions (approximately $1.7 million with a weighted average amortization period of 3.7 years). (4) Represents below-market leases (approximately $4.9 million with a weighted average amortization period of 3.4 years). Development Project Acquisitions On March 11, 2016 , we acquired an approximately 1.75 acre development site located at 610-620 Brannan Street in San Francisco, California from an unrelated third party. This land parcel is immediately adjacent to our Flower Mart project in the SOMA submarket of San Francisco. The acquisition was funded through $31.0 million in cash and the issuance of 867,701 common units in the Operating Partnership valued at approximately $48.0 million (see Note 10). In addition, the Company paid $2.4 million in seller transaction costs and recorded $4.7 million in accrued liabilities in connection with this acquisition. As of September 30, 2016 , the underlying assets were included as undeveloped land and construction in progress on our consolidated balance sheets. |
Dispositions and Real Estate As
Dispositions and Real Estate Assets Held for Sale | 9 Months Ended |
Sep. 30, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Dispositions and Real Estate Assets Held for Sale | Dispositions and Real Estate Assets Held for Sale Operating Property Dispositions The following table summarizes the operating properties sold during the nine months ended September 30, 2016 . Location Property Type Month of Disposition Number of Buildings Rentable Square Feet Sales Price (1) (in millions) Torrey Santa Fe Properties (2) Office January 4 465,812 $ 262.3 4930, 4939 & 4955 Directors Place, San Diego, CA (3) Office July 2 136,908 49.0 Total Dispositions 6 602,720 $ 311.3 ________________________ (1) Represents gross sales price before the impact of broker commissions and closing costs. (2) The Torrey Santa Fe Properties include the following: 7525 Torrey Santa Fe, 7535 Torrey Santa Fe, 7545 Torrey Santa Fe, and 7555 Torrey Santa Fe. These properties were classified as held for sale at December 31, 2015 . (3) These properties include two operating properties totaling 136,908 rentable square feet and a 7.0 acre undeveloped land parcel. The total gain on the six operating properties sold during the nine months ended September 30, 2016 was $164.3 million . During the three months ended September 30, 2016 , $258.1 million of net proceeds related to January 2016 operating property disposition were released from qualified intermediaries. As of September 30, 2016 , approximately $48.4 million of net proceeds related to operating property dispositions were temporarily being held at qualified intermediaries, at our direction, for the purpose of facilitating potential future Section 1031 Exchanges. The $48.4 million of cash proceeds are included in restricted cash on our consolidated balance sheets at September 30, 2016 . Land Dispositions The following table summarizes the land dispositions completed during the nine months ended September 30, 2016 : Property Submarket Month of Disposition Gross Site Acreage (unaudited) Sales Price (1) (in millions) Carlsbad Oaks - Lot 7 (2) Carlsbad January 7.6 $ 4.5 Carlsbad Oaks - Lots 4 & 5 Carlsbad June 11.2 6.0 Carlsbad Oaks - Lot 8 Carlsbad June 13.2 8.9 Total Land Dispositions (3)(4) 32.0 $ 19.4 ________________________ (1) Represents gross sales price before the impact of broker commissions and closing costs. (2) This land parcel was classified as held for sale as of December 31, 2015. (3) In connection with these land dispositions, $2.3 million of secured debt was assumed by the buyers. See Note 6 “Secured and Unsecured Debt of the Operating Partnership” for additional information. (4) The Company also disposed of a 7.0 acre undeveloped land parcel in connection with the disposition of 4930, 4939 & 4955 Directors Place, San Diego, CA included in the operating property dispositions above. The net loss on the undeveloped land parcels sold during the nine months ended September 30, 2016 was approximately $0.3 million . Real Estate Assets Held for Sale As of September 30, 2016 , the following property was classified as held for sale: Location Submarket Property Type Number of Buildings Rentable Square Feet 5717 Pacific Center Boulevard, San Diego, CA Sorrento Mesa Office 1 67,995 The sale of this property is scheduled to close in January of 2017. The major classes of assets and liabilities of the property held for sale as of September 30, 2016 were as follows: Real estate assets and other assets held for sale (in thousands) Land and improvements $ 2,693 Buildings and improvements 10,500 Total real estate held for sale 13,193 Accumulated depreciation and amortization (3,829 ) Total real estate held for sale, net 9,364 Prepaid expenses and other assets, net 76 Real estate and other assets held for sale, net $ 9,440 Liabilities of real estate assets held for sale Accounts payable, accrued expenses and other liabilities $ 74 Liabilities of real estate assets held for sale $ 74 |
Deferred Leasing Costs and Acqu
Deferred Leasing Costs and Acquisition-Related Intangible Assets and Liabilities, net | 9 Months Ended |
Sep. 30, 2016 | |
Intangible Assets and Liabilities Disclosure [Abstract] | |
Deferred Leasing Costs and Acquisition-Related Intangible Assets and Liabilities, net | Deferred Leasing Costs and Acquisition-Related Intangible Assets and Liabilities, net The following table summarizes our deferred leasing costs and acquisition-related intangible assets (acquired value of leasing costs, above-market operating leases, in-place leases and below-market ground lease obligation) and intangible liabilities (acquired value of below-market operating leases and above-market ground lease obligation) as of September 30, 2016 and December 31, 2015 : September 30, 2016 December 31, 2015 (in thousands) Deferred Leasing Costs and Acquisition-Related Intangible Assets, net: (1) Deferred leasing costs $ 229,252 $ 205,888 Accumulated amortization (85,154 ) (72,745 ) Deferred leasing costs, net 144,098 133,143 Above-market operating leases 10,209 10,989 Accumulated amortization (7,111 ) (6,739 ) Above-market operating leases, net 3,098 4,250 In-place leases 72,084 72,639 Accumulated amortization (39,121 ) (33,810 ) In-place leases, net 32,963 38,829 Below-market ground lease obligation 490 490 Accumulated amortization (36 ) (29 ) Below-market ground lease obligation, net 454 461 Total deferred leasing costs and acquisition-related intangible assets, net $ 180,613 $ 176,683 Acquisition-Related Intangible Liabilities, net: (2) Below-market operating leases $ 56,885 $ 53,502 Accumulated amortization (31,877 ) (27,074 ) Below-market operating leases, net 25,008 26,428 Above-market ground lease obligation 6,320 6,320 Accumulated amortization (500 ) (424 ) Above-market ground lease obligation, net 5,820 5,896 Total acquisition-related intangible liabilities, net $ 30,828 $ 32,324 ________________________ (1) Excludes deferred leasing costs and acquisition-related intangible assets, net related to properties held for sale as of December 31, 2015 . (2) Included in deferred revenue and acquisition-related intangible liabilities, net in the consolidated balance sheets. The following table sets forth amortization related to deferred leasing costs and acquisition-related intangibles for the three and nine months ended September 30, 2016 and 2015 : Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 (in thousands) Deferred leasing costs (1) $ 7,599 $ 6,932 $ 21,343 $ 20,847 Above-market operating leases (2) 376 487 1,152 2,135 In-place leases (1) 2,753 3,073 8,310 11,710 Below-market ground lease obligation (3) 2 2 6 6 Below-market operating leases (4) (2,261 ) (2,228 ) (6,280 ) (8,905 ) Above-market ground lease obligation (5) (26 ) (26 ) (76 ) (76 ) Total $ 8,443 $ 8,240 $ 24,455 $ 25,717 ________________________ (1) The amortization of deferred leasing costs and in-place leases is recorded to depreciation and amortization expense in the consolidated statements of operations for the periods presented. (2) The amortization of above-market operating leases is recorded as a decrease to rental income in the consolidated statements of operations for the periods presented. (3) The amortization of the below-market ground lease obligation is recorded as an increase to ground lease expense in the consolidated statements of operations for the periods presented. (4) The amortization of below-market operating leases is recorded as an increase to rental income in the consolidated statements of operations for the periods presented. (5) The amortization of the above-market ground lease obligation is recorded as a decrease to ground lease expense in the consolidated statements of operations for the periods presented. The following table sets forth the estimated annual amortization expense related to deferred leasing costs and acquisition-related intangibles as of September 30, 2016 for future periods: Year Deferred Leasing Costs Above-Market Operating Leases (1) In-Place Leases Below-Market Ground Lease Obligation (2) Below-Market Operating Leases (3) Above-Market Ground Lease Obligation (4) (in thousands) Remaining 2016 $ 7,258 $ 349 $ 2,697 $ 2 $ (2,236 ) $ (25 ) 2017 26,971 1,241 9,739 8 (8,438 ) (101 ) 2018 23,649 831 6,998 8 (7,159 ) (101 ) 2019 19,468 643 5,148 8 (4,581 ) (101 ) 2020 15,174 16 2,923 8 (2,169 ) (101 ) Thereafter 51,578 18 5,458 420 (425 ) (5,391 ) Total $ 144,098 $ 3,098 $ 32,963 $ 454 $ (25,008 ) $ (5,820 ) ________________________ (1) Represents estimated annual amortization related to above-market operating leases. Amounts will be recorded as a decrease to rental income in the consolidated statements of operations. (2) Represents estimated annual amortization related to below-market ground lease obligations. Amounts will be recorded as an increase to ground lease expense in the consolidated statements of operations. (3) Represents estimated annual amortization related to below-market operating leases. Amounts will be recorded as an increase to rental income in the consolidated statements of operations. (4) Represents estimated annual amortization related to above-market ground lease obligations. Amounts will be recorded as a decrease to ground lease expense in the consolidated statements of operations. |
Receivables
Receivables | 9 Months Ended |
Sep. 30, 2016 | |
Receivables [Abstract] | |
Receivables | Receivables Current Receivables, net Current receivables, net is primarily comprised of contractual rents and other lease-related obligations due from tenants. The balance consisted of the following as of September 30, 2016 and December 31, 2015 : September 30, 2016 December 31, 2015 (in thousands) Current receivables $ 11,434 $ 13,233 Allowance for uncollectible tenant receivables (1,725 ) (2,080 ) Current receivables, net (1) $ 9,709 $ 11,153 ________________________ (1) Excludes current receivables, net related to real estate held for sale at December 31, 2015 . Deferred Rent Receivables, net Deferred rent receivables, net consisted of the following as of September 30, 2016 and December 31, 2015 : September 30, 2016 December 31, 2015 (in thousands) Deferred rent receivables $ 213,730 $ 191,586 Allowance for deferred rent receivables (1,526 ) (1,882 ) Deferred rent receivables, net (1) $ 212,204 $ 189,704 ________________________ (1) Excludes deferred rent receivables related to real estate held for sale at December 31, 2015 . |
Secured and Unsecured Debt of t
Secured and Unsecured Debt of the Operating Partnership | 9 Months Ended |
Sep. 30, 2016 | |
Kilroy Realty, L.P. [Member] | |
Debt Instrument [Line Items] | |
Secured and Unsecured Debt of the Operating Partnership | Secured and Unsecured Debt of the Operating Partnership Secured Debt The following table sets forth the composition of our secured debt as of September 30, 2016 and December 31, 2015 : Type of Debt Annual Stated Interest Rate (1) Effective Interest Rate (1)(2) Maturity Date September 30, 2016 December 31, 2015 (in thousands) Mortgage note payable (3) 4.27% 4.27% February 2018 $ 126,405 $ 128,315 Mortgage note payable (3) 4.48% 4.48% July 2027 95,161 96,354 Mortgage note payable (3) (4) 6.05% 3.50% June 2019 83,314 85,890 Mortgage note payable 6.51% 6.51% February 2017 64,703 65,563 Mortgage note payable 7.15% 7.15% May 2017 1,926 3,987 Other (5) Various Various Various — 1,809 Total secured debt $ 371,509 $ 381,918 Unamortized deferred financing costs (843 ) (1,083 ) Total secured debt, net $ 370,666 $ 380,835 ________________________ (1) All interest rates presented are fixed-rate interest rates. (2) Represents the effective interest rate including the amortization of initial issuance discounts/premiums excluding the amortization of deferred financing costs. (3) The secured debt and the related properties that secure the debt are held in a special purpose entity and the properties are not available to satisfy the debts and other obligations of the Company or the Operating Partnership. (4) Amounts reported include the amounts of unamortized debt premiums of $4.9 million and $6.2 million as of September 30, 2016 and December 31, 2015 , respectively. (5) Balance of $1.8 million as of December 31, 2015 included public facility bonds that were assumed by the buyers in connection with sales of land during the nine months ended September 30, 2016 . Although our mortgage loans are secured and non-recourse to the Company and the Operating Partnership, the Company provides limited customary secured debt guarantees for items such as voluntary bankruptcy, fraud, misapplication of payments and environmental liabilities. Unsecured Senior Notes The following table summarizes the balance and significant terms of the registered unsecured senior notes issued by the Operating Partnership as of September 30, 2016 and December 31, 2015 : Principal Amount as of Issuance date Maturity date Stated coupon rate Effective interest rate (1) September 30, December 31, 2015 (in thousands) 4.375% Unsecured Senior Notes (2) September 2015 October 2025 4.375% 4.440% $ 400,000 $ 400,000 Unamortized discount and deferred financing costs (4,985 ) (5,400 ) Net carrying amount $ 395,015 $ 394,600 4.250% Unsecured Senior Notes (3) July 2014 August 2029 4.250% 4.350% $ 400,000 $ 400,000 Unamortized discount and deferred financing costs (6,829 ) (7,228 ) Net carrying amount $ 393,171 $ 392,772 3.800% Unsecured Senior Notes (4) January 2013 January 2023 3.800% 3.804% $ 300,000 $ 300,000 Unamortized discount and deferred financing costs (1,725 ) (1,931 ) Net carrying amount $ 298,275 $ 298,069 4.800% Unsecured Senior Notes (4) (5) July 2011 July 2018 4.800% 4.827% $ 325,000 $ 325,000 Unamortized discount and deferred financing costs (888 ) (1,251 ) Net carrying amount $ 324,112 $ 323,749 6.625% Unsecured Senior Notes (6) May 2010 June 2020 6.625% 6.743% $ 250,000 $ 250,000 Unamortized discount and deferred financing costs (2,005 ) (2,414 ) Net carrying amount $ 247,995 $ 247,586 Total Unsecured Senior Notes, Net $ 1,658,568 $ 1,656,776 ________________________ (1) Represents the effective interest rate including the amortization of initial issuance discounts/premiums, excluding the amortization of deferred financing costs. (2) Interest on these notes is payable semi-annually in arrears on April 1st and October 1st of each year. (3) Interest on these notes is payable semi-annually in arrears on February 15th and August 15th of each year. (4) Interest on these notes is payable semi-annually in arrears on January 15th and July 15th of each year. (5) In October 2015, certain common limited partners in the Operating Partnership that previously contributed their interests in the property at 6255 W. Sunset Blvd., Los Angeles, California to the Operating Partnership entered into an agreement with the Company. Pursuant to this agreement, such common limited partners will reimburse the Company for a portion of any amounts the Company may be required to pay pursuant to its guarantee of the Operating Partnership’s 4.800% Senior Notes due 2018 or that the Company may otherwise become required to pay under applicable law with respect to such notes. (6) Interest on these notes is payable semi-annually in arrears on June 1st and December 1st of each year. Unsecured Senior Notes - Private Placement On September 14, 2016, the Operating Partnership entered into a Note Purchase Agreement in a private placement (the “Note Purchase Agreement”), in connection with the issuance and sale of $175.0 million principal amount of the Operating Partnership’s 3.35% Senior Notes, Series A, due February 17, 2027 (the “Series A Notes”), and $75.0 million principal amount of the Operating Partnership’s 3.45% Senior Notes, Series B, due February 17, 2029 (the “Series B Notes” and, together with the Series A Notes, the “Series A and B Notes”). Under the delayed draw option of the Series A and B Notes, the Operating Partnership is required to issue $175.0 million principal amount of its Series A Notes and $75.0 million principal amount of its Series B Notes by February 17, 2017. As of September 30, 2016 , there were no amounts issued or outstanding under the Series A and B Notes. The Series A Notes mature on February 17, 2027, and the Series B notes mature on February 17, 2029, unless earlier redeemed or prepaid pursuant to the terms of the Note Purchase Agreement. Interest on the Notes is payable semi-annually in arrears on February 17 and August 17 of each year beginning February 17, 2017. The Operating Partnership may, at its option and upon notice to the purchasers of the Series A and B Notes, prepay at any time all, or from time to time any part of the Series A and B Notes then outstanding (in an amount not less than 5% of the aggregate principal amount of the Series A and B Notes then outstanding in the case of a partial prepayment), at 100% of the principal amount so prepaid, plus the make-whole amount determined for the prepayment date with respect to such principal amount as set forth in the Note Purchase Agreement. In connection with the issuance of the Series A and B Notes, the Company will enter into an agreement whereby it will guarantee the payment by the Operating Partnership of all amounts due with respect to the Series A and B Notes and the performance by the Operating Partnership of its obligations under the Note Purchase Agreement. Unsecured Revolving Credit Facility The Company intends to borrow amounts under the unsecured revolving credit facility from time to time for general corporate purposes, to fund potential acquisitions, to finance development and redevelopment expenditures and to potentially repay long-term debt. The following table summarizes the balance and terms of our unsecured revolving credit facility as of September 30, 2016 and December 31, 2015 : September 30, 2016 December 31, 2015 (in thousands) Outstanding borrowings $ — $ — Remaining borrowing capacity 600,000 600,000 Total borrowing capacity (1) $ 600,000 $ 600,000 Interest rate (2) 1.58 % 1.48 % Facility fee-annual rate (3) 0.200% Maturity date July 2019 ________________________ (1) We may elect to borrow, subject to bank approval and obtaining commitments for any additional borrowing capacity, up to an additional $311.0 million under an accordion feature under the terms of the unsecured revolving credit facility and term loan facility. (2) The interest rate on our unsecured revolving credit facility is based on an annual rate of LIBOR plus 1.050% . (3) Our facility fee is paid on a quarterly basis and is calculated based on the total borrowing capacity. In addition to the facility fee, we incurred debt origination and legal costs. As of September 30, 2016 and December 31, 2015 , $3.6 million and $4.6 million , of unamortized deferred financing costs, respectively, remained to be amortized through the maturity date of our unsecured revolving credit facility, which are included in prepaid expenses and other assets, net on our consolidated balance sheets. Unsecured Term Loan Facility The following table summarizes the balance and terms of our unsecured term loan facility as of September 30, 2016 and December 31, 2015 : September 30, 2016 December 31, 2015 (in thousands) Outstanding borrowings (1) $ 150,000 $ 150,000 Interest rate (2) 1.67 % 1.40 % Maturity date July 2019 ________________________ (1) As of September 30, 2016 and December 31, 2015 , $0.7 million and $0.9 million of unamortized deferred financing costs, respectively, remained to be amortized through the maturity date of our unsecured term loan facility. (2) Our unsecured term loan facility interest rate was calculated based on an annual rate of LIBOR plus 1.150% as of September 30, 2016 and December 31, 2015 . Additionally, the Company has a $39.0 million unsecured term loan outstanding with an annual interest rate of LIBOR plus 1.150% as of September 30, 2016 and December 31, 2015 , that matures in July 2019. As of September 30, 2016 and December 31, 2015 , $0.2 million of unamortized deferred financing costs remained to be amortized through the maturity date of our unsecured term loan. Debt Covenants and Restrictions The unsecured revolving credit facility, the unsecured term loan facility, the unsecured term loan, the unsecured senior notes, the Series A and B Notes and certain other secured debt arrangements contain covenants and restrictions requiring us to meet certain financial ratios and reporting requirements. Some of the more restrictive financial covenants include a maximum ratio of total debt to total asset value, a minimum fixed-charge coverage ratio, a minimum unsecured debt ratio and a minimum unencumbered asset pool debt service coverage ratio. Noncompliance with one or more of the covenants and restrictions could result in the full principal balance of the associated debt becoming immediately due and payable. We believe we were in compliance with all of our debt covenants as of September 30, 2016 . Debt Maturities The following table summarizes the stated debt maturities and scheduled amortization payments of our issued and outstanding debt, excluding unamortized debt discounts, premiums and deferred financing costs, as of September 30, 2016 : Year (in thousands) Remaining 2016 $ 2,480 2017 71,692 2018 451,669 2019 265,309 2020 251,913 Thereafter 1,187,589 Total (1) (2) $ 2,230,652 ________________________ (1) Includes gross principal balance of outstanding debt before the effect of the following at September 30, 2016 : $11.4 million of unamortized deferred financing costs, $6.8 million of unamortized discounts for the unsecured senior notes and $4.9 million of unamortized premiums for the secured debt. (2) Excludes the Series A and B Notes issuable pursuant to the Note Purchase Agreement entered into in September 2016 as no Series A or B Notes were issued and outstanding under these notes as of September 30, 2016 . Capitalized Interest and Loan Fees The following table sets forth gross interest expense, including debt discount/premium and deferred financing cost amortization, net of capitalized interest, for the three and nine months ended September 30, 2016 and 2015 . The interest expense capitalized was recorded as a cost of development and increased the carrying value of undeveloped land and construction in progress. Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 (in thousands) Gross interest expense $ 26,184 $ 27,386 $ 79,027 $ 82,322 Capitalized interest and deferred financing costs (11,208 ) (14,567 ) (37,838 ) (37,761 ) Interest expense $ 14,976 $ 12,819 $ 41,189 $ 44,561 |
Noncontrolling Interests on the
Noncontrolling Interests on the Company's Consolidated Financial Statements | 9 Months Ended |
Sep. 30, 2016 | |
Noncontrolling Interest [Abstract] | |
Noncontrolling Interests on the Company's Consolidated Financial Statements | Noncontrolling Interests on the Company’s Consolidated Financial Statements Common Units of the Operating Partnership The Company owned an approximate 97.2% , 98.1% and 98.1% common general partnership interest in the Operating Partnership as of September 30, 2016 , December 31, 2015 and September 30, 2015 , respectively. The remaining approximate 2.8% , 1.9% and 1.9% common limited partnership interest as of September 30, 2016 , December 31, 2015 and September 30, 2015 , respectively, was owned by non-affiliated investors and certain of our executive officers and directors in the form of noncontrolling common units. There were 2,631,276 , 1,764,775 and 1,788,170 common units outstanding held by these investors, executive officers and directors as of September 30, 2016 , December 31, 2015 and September 30, 2015 , respectively. The increase in the common units from December 31, 2015 to September 30, 2016 was attributable to 867,701 common units issued in connection with an acquisition (see Note 2) partially offset by a unit redemption. The noncontrolling common units may be redeemed by unitholders for cash. Except under certain circumstances, we, at our option, may satisfy the cash redemption obligation with shares of the Company’s common stock on a one-for-one basis. If satisfied in cash, the value for each noncontrolling common unit upon redemption is the amount equal to the average of the closing quoted price per share of the Company’s common stock, par value $.01 per share, as reported on the NYSE for the ten trading days immediately preceding the applicable redemption date. The aggregate value upon redemption of the then-outstanding noncontrolling common units was $181.7 million and $112.0 million as of September 30, 2016 and December 31, 2015 , respectively. This redemption value does not necessarily represent the amount that would be distributed with respect to each noncontrolling common unit in the event of our termination or liquidation. In the event of our termination or liquidation, it is expected in most cases that each common unit would be entitled to a liquidating distribution equal to the liquidating distribution payable in respect of each share of the Company’s common stock. Consolidated Property Partnerships On August 30, 2016, the Operating Partnership entered into agreements with a third party whereby the third party will invest, through REIT subsidiaries, in two existing companies that owned the Company’s 100 First Street and 303 Second Street office properties located in San Francisco, California. Based on a gross valuation of the two properties of approximately $1.2 billion , the third party will contribute a total of $452.9 million for a 44% common equity interest in the companies. The transaction was structured with a staggered closing. On August 30, 2016, the first tranche of the transaction (the “100 First Street Transaction”) closed and the third party contributed $191.4 million plus a working capital contribution of $2.1 million for a 44% common ownership interest in 100 First LLC. The second tranche of the transaction (the “303 Second Street Transaction”) is expected to close on November 30, 2016, at which time the third party will contribute $261.5 million , which is net of its proportionate share of the existing mortgage debt secured by the 303 Second Street property, for a 44% common ownership interest in 303 Second Street Member, LLC. The 100 First Street Transaction did not meet the criteria to qualify as a sale of real estate because the Company continues to effectively control the property and therefore will continue to account for the property on a consolidated basis in its financial statements. The Company has accounted for the 100 First Street Transaction as an equity transaction and has recognized the noncontrolling interest in its consolidated balance sheets totaling approximately $78.7 million , which is equal to 44% of the aggregate carrying value of the total equity of 100 First LLC immediately prior to the transaction plus the third party’s $2.1 million working capital contribution. The amount of the third party’s total contribution not recognized as noncontrolling interest was approximately $113.0 million , which is net of transaction costs. This amount has not been reflected as a gain on sale of operating properties in the Company’s consolidated statements of operations and has instead been reflected as an increase in additional paid-in capital and partners’ capital in the Company’s and the Operating Partnership’s consolidated balance sheets, respectively. Transfers of less than 50% of an entity ownership interest are normally not subject to certain tax assessments in California and therefore the Company believes that the 100 First Street Transaction does not meet the statutory requirements for such tax assessments. If the taxing authority attempted to assess such tax assessments on the 100 First Street Transaction, the Company estimates it could incur additional taxes of up to $10.9 million plus potential penalties and interest. The Company anticipates that the 303 Second Street Transaction will be accounted for in the same manner as the 100 First Street Transaction upon closing in November 2016. In connection with the transaction, the Company will provide customary property management, leasing and construction management services for both properties. 100 First Street is a 467,095 square foot office tower, and 303 Second Street is a 740,047 square foot office property, both located in the South of Market submarket in San Francisco, California. The noncontrolling interest in 100 First LLC as of September 30, 2016 was $79.0 million which is recognized in noncontrolling interests in consolidated property partnerships on the Company's consolidated balance sheets. The remaining amount of noncontrolling interests in consolidated property partnerships represents the third party equity interest in Redwood LLC. This noncontrolling interest was $6.5 million as of September 30, 2016 and December 31, 2015 . Noncontrolling Interests on the Operating Partnership’s Consolidated Financial Statements Consolidated Property Partnerships On August 30, 2016, the Operating Partnership entered into agreements with a third party whereby the third party will invest, through REIT subsidiaries, in two existing companies that owned the Company’s 100 First Street and 303 Second Street office properties located in San Francisco, California. Based on a gross valuation of the two properties of approximately $1.2 billion , the third party will contribute a total of $452.9 million for a 44% common equity interest in the companies. The transaction was structured with a staggered closing. On August 30, 2016, the 100 First Street Transaction closed and the third party contributed $191.4 million plus a working capital contribution of $2.1 million for a 44% common ownership interest in 100 First LLC. The 303 Second Street Transaction is expected to close on November 30, 2016, at which time the third party will contribute $261.5 million , which is net of its proportionate share of the existing mortgage debt secured by the 303 Second Street property, for a 44% common ownership interest in 303 Second Street Member, LLC. Refer to Note 7 for additional information regarding the transaction. The noncontrolling interest in 100 First LLC as of September 30, 2016 was $79.0 million which is recognized in noncontrolling interests in consolidated property partnerships on the Operating Partnership's consolidated balance sheets. The remaining amount of noncontrolling interests in consolidated property partnerships represents the third party equity interest in Redwood LLC. This noncontrolling interest was $6.5 million as of September 30, 2016 and December 31, 2015 . |
Noncontrolling Interests on t21
Noncontrolling Interests on the Operating Partnership's Consolidated Financial Statements (Notes) | 9 Months Ended |
Sep. 30, 2016 | |
Noncontrolling Interest [Abstract] | |
Noncontrolling Interests on the Operating Partnership's Consolidated Financial Statements | Noncontrolling Interests on the Company’s Consolidated Financial Statements Common Units of the Operating Partnership The Company owned an approximate 97.2% , 98.1% and 98.1% common general partnership interest in the Operating Partnership as of September 30, 2016 , December 31, 2015 and September 30, 2015 , respectively. The remaining approximate 2.8% , 1.9% and 1.9% common limited partnership interest as of September 30, 2016 , December 31, 2015 and September 30, 2015 , respectively, was owned by non-affiliated investors and certain of our executive officers and directors in the form of noncontrolling common units. There were 2,631,276 , 1,764,775 and 1,788,170 common units outstanding held by these investors, executive officers and directors as of September 30, 2016 , December 31, 2015 and September 30, 2015 , respectively. The increase in the common units from December 31, 2015 to September 30, 2016 was attributable to 867,701 common units issued in connection with an acquisition (see Note 2) partially offset by a unit redemption. The noncontrolling common units may be redeemed by unitholders for cash. Except under certain circumstances, we, at our option, may satisfy the cash redemption obligation with shares of the Company’s common stock on a one-for-one basis. If satisfied in cash, the value for each noncontrolling common unit upon redemption is the amount equal to the average of the closing quoted price per share of the Company’s common stock, par value $.01 per share, as reported on the NYSE for the ten trading days immediately preceding the applicable redemption date. The aggregate value upon redemption of the then-outstanding noncontrolling common units was $181.7 million and $112.0 million as of September 30, 2016 and December 31, 2015 , respectively. This redemption value does not necessarily represent the amount that would be distributed with respect to each noncontrolling common unit in the event of our termination or liquidation. In the event of our termination or liquidation, it is expected in most cases that each common unit would be entitled to a liquidating distribution equal to the liquidating distribution payable in respect of each share of the Company’s common stock. Consolidated Property Partnerships On August 30, 2016, the Operating Partnership entered into agreements with a third party whereby the third party will invest, through REIT subsidiaries, in two existing companies that owned the Company’s 100 First Street and 303 Second Street office properties located in San Francisco, California. Based on a gross valuation of the two properties of approximately $1.2 billion , the third party will contribute a total of $452.9 million for a 44% common equity interest in the companies. The transaction was structured with a staggered closing. On August 30, 2016, the first tranche of the transaction (the “100 First Street Transaction”) closed and the third party contributed $191.4 million plus a working capital contribution of $2.1 million for a 44% common ownership interest in 100 First LLC. The second tranche of the transaction (the “303 Second Street Transaction”) is expected to close on November 30, 2016, at which time the third party will contribute $261.5 million , which is net of its proportionate share of the existing mortgage debt secured by the 303 Second Street property, for a 44% common ownership interest in 303 Second Street Member, LLC. The 100 First Street Transaction did not meet the criteria to qualify as a sale of real estate because the Company continues to effectively control the property and therefore will continue to account for the property on a consolidated basis in its financial statements. The Company has accounted for the 100 First Street Transaction as an equity transaction and has recognized the noncontrolling interest in its consolidated balance sheets totaling approximately $78.7 million , which is equal to 44% of the aggregate carrying value of the total equity of 100 First LLC immediately prior to the transaction plus the third party’s $2.1 million working capital contribution. The amount of the third party’s total contribution not recognized as noncontrolling interest was approximately $113.0 million , which is net of transaction costs. This amount has not been reflected as a gain on sale of operating properties in the Company’s consolidated statements of operations and has instead been reflected as an increase in additional paid-in capital and partners’ capital in the Company’s and the Operating Partnership’s consolidated balance sheets, respectively. Transfers of less than 50% of an entity ownership interest are normally not subject to certain tax assessments in California and therefore the Company believes that the 100 First Street Transaction does not meet the statutory requirements for such tax assessments. If the taxing authority attempted to assess such tax assessments on the 100 First Street Transaction, the Company estimates it could incur additional taxes of up to $10.9 million plus potential penalties and interest. The Company anticipates that the 303 Second Street Transaction will be accounted for in the same manner as the 100 First Street Transaction upon closing in November 2016. In connection with the transaction, the Company will provide customary property management, leasing and construction management services for both properties. 100 First Street is a 467,095 square foot office tower, and 303 Second Street is a 740,047 square foot office property, both located in the South of Market submarket in San Francisco, California. The noncontrolling interest in 100 First LLC as of September 30, 2016 was $79.0 million which is recognized in noncontrolling interests in consolidated property partnerships on the Company's consolidated balance sheets. The remaining amount of noncontrolling interests in consolidated property partnerships represents the third party equity interest in Redwood LLC. This noncontrolling interest was $6.5 million as of September 30, 2016 and December 31, 2015 . Noncontrolling Interests on the Operating Partnership’s Consolidated Financial Statements Consolidated Property Partnerships On August 30, 2016, the Operating Partnership entered into agreements with a third party whereby the third party will invest, through REIT subsidiaries, in two existing companies that owned the Company’s 100 First Street and 303 Second Street office properties located in San Francisco, California. Based on a gross valuation of the two properties of approximately $1.2 billion , the third party will contribute a total of $452.9 million for a 44% common equity interest in the companies. The transaction was structured with a staggered closing. On August 30, 2016, the 100 First Street Transaction closed and the third party contributed $191.4 million plus a working capital contribution of $2.1 million for a 44% common ownership interest in 100 First LLC. The 303 Second Street Transaction is expected to close on November 30, 2016, at which time the third party will contribute $261.5 million , which is net of its proportionate share of the existing mortgage debt secured by the 303 Second Street property, for a 44% common ownership interest in 303 Second Street Member, LLC. Refer to Note 7 for additional information regarding the transaction. The noncontrolling interest in 100 First LLC as of September 30, 2016 was $79.0 million which is recognized in noncontrolling interests in consolidated property partnerships on the Operating Partnership's consolidated balance sheets. The remaining amount of noncontrolling interests in consolidated property partnerships represents the third party equity interest in Redwood LLC. This noncontrolling interest was $6.5 million as of September 30, 2016 and December 31, 2015 . |
Stockholders' Equity of the Com
Stockholders' Equity of the Company | 9 Months Ended |
Sep. 30, 2016 | |
Equity [Abstract] | |
Stockholders' Equity of the Company | Stockholders’ Equity of the Company At-The-Market Stock Offering Program Under our current at-the-market stock offering program, which commenced in December 2014, we may offer and sell shares of our common stock having an aggregate gross sales price of up to $300.0 million from time to time in “at-the-market” offerings. No shares of common stock were sold under this program during the nine months ended September 30, 2016 . Since commencement of the program through September 30, 2016 , we have sold 2,007,767 shares of common stock having an aggregate gross sales price of $150.1 million . As of September 30, 2016 , shares of common stock having an aggregate gross sales price of up to $149.9 million remain available to be sold under this program. Actual future sales will depend upon a variety of factors, including but not limited to market conditions, the trading price of the Company’s common stock and our capital needs. We have no obligation to sell the remaining shares available for sale under this program. Common Stock Repurchases On February 23, 2016, the Company’s Board of Directors approved a 4,000,000 share increase to the Company’s existing share repurchase program bringing the total current repurchase authorization to 4,988,025 shares. During the three months ended March 31, 2016, the Company repurchased 52,199 shares of common stock at a weighted average price of $55.45 per common share for $2.9 million . No shares of common stock were repurchased under this program during the six months ended September 30, 2016 . As of September 30, 2016 , 4,935,826 shares remain eligible for repurchase under the Company’s share repurchase program. |
Partners' Capital of the Operat
Partners' Capital of the Operating Partnership | 9 Months Ended |
Sep. 30, 2016 | |
Partners' Capital Notes [Abstract] | |
Partners’ Capital of the Operating Partnership | Partners’ Capital of the Operating Partnership Issuance of Common Units In March 2016, the Operating Partnership issued 867,701 common units in connection with a development acquisition as discussed in Note 2. Each common unit was valued at $55.36 , which was based on a trailing ten-day average of the closing quoted price per share of the Company’s common stock, par value $.01 per share, as reported on the NYSE, as calculated in accordance with the Partnership Agreement. Common Units Outstanding The following table sets forth the number of common units held by the Company and the number of common units held by non-affiliated investors and certain of our executive officers and directors in the form of noncontrolling common units as well as the ownership interest held on each respective date: September 30, 2016 December 31, 2015 September 30, 2015 Company owned common units in the Operating Partnership 92,272,492 92,258,690 92,220,367 Company owned general partnership interest 97.2 % 98.1 % 98.1 % Noncontrolling common units of the Operating Partnership 2,631,276 1,764,775 1,788,170 Ownership interest of noncontrolling interest 2.8 % 1.9 % 1.9 % For further discussion of the noncontrolling common units as of September 30, 2016 and December 31, 2015 , refer to Note 7. |
Share-Based Compensation
Share-Based Compensation | 9 Months Ended |
Sep. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Compensation | Share-Based Compensation Stockholder Approved Equity Compensation Plans As of September 30, 2016 , we maintained one share-based incentive compensation plan, the Kilroy Realty 2006 Incentive Award Plan, as amended (the “2006 Plan”). As of September 30, 2016 , 1,354,143 shares were available for grant under the 2006 Plan. The calculation of shares available for grant is presented after taking into account a reserve for a sufficient number of shares to cover the vesting and payment of 2006 Plan awards that were outstanding on that date, including performance-based vesting awards at (i) levels actually achieved for the performance conditions (as defined below) and (ii) at target levels for the market conditions (as defined below) applicable to these awards. 2016 Share-Based Compensation Grants On January 28, 2016 , the Executive Compensation Committee of the Company’s Board of Directors awarded 294,821 restricted stock units (“RSUs”) to certain officers of the Company under the 2006 Plan, which included 168,077 RSUs (at the target level of performance), or 57% , that are subject to market and performance-based vesting requirements (the “2016 Performance-Based RSUs”) and 126,744 RSUs, or 43% , that are subject to time-based vesting requirements (the “2016 Time-Based RSUs”). During 2016 , the Executive Compensation Committee of the Company’s Board of Directors also awarded 55,713 RSUs to various officers of the Company under the 2006 Plan (the “2016 Special RSUs”). 2016 Performance-Based RSU Grant The 2016 Performance-Based RSUs are scheduled to vest at the end of a three -year period based upon the achievement of pre-set FFO per share goals (the “performance condition”) for the year ending December 31, 2016 and also based upon the average annual relative total stockholder return ranking for the Company compared to an established comparison group of companies (the “market condition”) for the three -year period ending December 31, 2018. The 2016 Performance-Based RSUs are also subject to a three -year service vesting provision and are scheduled to cliff vest at the end of the three -year period. The number of 2016 Performance-Based RSUs ultimately earned could fluctuate from the target number of 2016 Performance-Based RSUs granted based upon the levels of achievement for both the performance condition and the market condition. The estimate of the number of 2016 Performance-Based RSUs earned are evaluated quarterly during the 2016 performance period based on our estimate as to the 2016 FFO per share performance measured against the applicable goals. As of September 30, 2016 , 206,907 2016 Performance-Based RSUs are estimated to be earned based on the Company’s estimate of 2016 FFO per share performance measured against the applicable goals, and the compensation cost recorded to date for this program was based on that estimate. Compensation expense for the 2016 Performance-Based RSU grant will be recorded on a straight-line basis over the three -year period. Each 2016 Performance-Based RSU represents the right, subject to the applicable vesting conditions, to receive one share of our common stock in the future. The total fair value of the 2016 Performance-Based RSU grant was $9.6 million at January 28, 2016 and was calculated using a Monte Carlo simulation pricing model based on the assumptions in the table below. The determination of the fair value of the 2016 Performance-Based RSU grant takes into consideration the likelihood of achievement of both the performance condition and the market condition discussed above. For the nine months ended September 30, 2016 , we recorded compensation expense based upon the $57.08 fair value at January 28, 2016 . The following table summarizes the assumptions utilized in the Monte Carlo simulation pricing model: Fair Value Assumptions Fair value per share at January 28, 2016 $57.08 Expected share price volatility 26.00% Risk-free interest rate 1.13% Remaining expected life 2.9 years The computation of expected volatility is based on a blend of the historical volatility of our shares of common stock over approximately six years, as that is expected to be most consistent with future volatility and equates to a time period twice as long as the approximate three-year remaining performance period of the RSUs and implied volatility data based on the observed pricing of six month publicly-traded options on our shares of common stock. The risk-free interest rate is based on the yield curve on zero-coupon U.S. Treasury STRIP securities in effect at January 28, 2016 . The expected life of the RSUs is equal to the remaining 2.9 year vesting period at January 28, 2016 . 2016 Time-Based RSU Grant The 2016 Time-Based RSUs are scheduled to vest in three equal installments beginning on January 5, 2017 through January 5, 2019. Compensation expense for the 2016 Time-Based RSUs will be recognized on a straight-line basis over the three -year service vesting period. Each 2016 Time-Based RSU represents the right to receive one share of our common stock in the future. The total fair value of the 2016 Time-Based RSU grant was $7.1 million , which was based on the $56.23 closing share price of the Company’s common stock on the NYSE on January 28, 2016 . 2016 Special RSU Grants The 2016 Special RSUs are scheduled to vest in equal installments based on service vesting provisions and the achievement of certain metrics. Compensation expense for the 2016 Special RSUs will be recognized on a straight-line basis over the vesting periods. Each 2016 Special RSU represents the right, subject to the applicable vesting conditions, to receive one share of our common stock in the future. The total fair value of the 2016 Special RSUs at grant was $3.5 million , which was based on the closing share price of the Company’s common stock on the NYSE at date of grant for the time-based portion, and the estimated fair value at date of grant for the performance-based portion. Share-Based Compensation Cost Recorded During the Period The total compensation cost for all share-based compensation programs was $6.8 million and $4.3 million for the three months ended September 30, 2016 and 2015 , respectively, and $19.3 million and $13.6 million for the nine months ended September 30, 2016 and 2015 , respectively. Of the total share-based compensation costs, $1.5 million and $0.7 million was capitalized as part of real estate assets for the three months ended September 30, 2016 and 2015 , respectively, and $4.0 million and $2.3 million for the nine months ended September 30, 2016 and 2015 . As of September 30, 2016 , there was approximately $34.9 million of total unrecognized compensation cost related to nonvested incentive awards granted under share-based compensation arrangements that is expected to be recognized over a weighted-average period of 1.9 years. The remaining compensation cost related to these nonvested incentive awards had been recognized in periods prior to September 30, 2016 . |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies General As of September 30, 2016 , we had commitments of approximately $379.4 million , excluding our ground lease commitments, for contracts and executed leases directly related to our operating properties and development projects. Environmental Matters We follow the policy of monitoring all of our properties, both acquisition and existing stabilized portfolio properties, for the presence of hazardous or toxic substances. While there can be no assurance that a material environmental liability does not exist, we are not currently aware of any environmental liability with respect to our stabilized portfolio properties that would have a material adverse effect on our financial condition, results of operations and cash flow, or that we believe would require additional disclosure or the recording of a loss contingency. As of September 30, 2016 , we had accrued environmental remediation liabilities of approximately $25.1 million recorded on our consolidated balance sheets in connection with certain development projects and recent development acquisitions. It is possible that we could incur additional environmental remediation costs in connection with these recent development acquisitions. However, given we are in the early stages of development on certain of these projects, potential additional environmental costs are not reasonably estimable at this time. Other Significant Transactions During the quarter ended September 30, 2016 , we settled an outstanding property damage matter and received cash proceeds totaling $5.0 million , which is included in other property income on our consolidated statements of operations. |
Fair Value Measurements and Dis
Fair Value Measurements and Disclosures | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements and Disclosures | Fair Value Measurements and Disclosures Assets and Liabilities Reported at Fair Value The only assets we record at fair value on our consolidated financial statements are the marketable securities related to our Deferred Compensation Plan. The following table sets forth the fair value of our marketable securities as of September 30, 2016 and December 31, 2015 : Fair Value (Level 1) (1) September 30, 2016 December 31, 2015 Description (in thousands) Marketable securities (2) $ 14,121 $ 12,882 ________________________ (1) Based on quoted prices in active markets for identical securities. (2) The marketable securities are held in a limited rabbi trust. We report the change in the fair value of the marketable securities at the end of each accounting period in interest income and other net investment gains in the consolidated statements of operations. We also adjust the related Deferred Compensation Plan liability to fair value at the end of each accounting period based on the performance of the benchmark funds selected by each participant, which results in a corresponding increase or decrease to compensation cost for the period. The following table sets forth the net gain (loss) on marketable securities recorded during the three and nine months ended September 30, 2016 and 2015 : Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Description (in thousands) (in thousands) Net gain (loss) on marketable securities $ 481 $ (681 ) $ 867 $ (171 ) Financial Instruments Disclosed at Fair Value The following table sets forth the carrying value and the fair value of our other financial instruments as of September 30, 2016 and December 31, 2015 : September 30, 2016 December 31, 2015 Carrying Fair (1) Carrying Fair (1) (in thousands) Liabilities Secured debt, net $ 370,666 $ 383,781 $ 380,835 $ 391,611 Unsecured debt, net 1,846,672 1,982,720 1,844,634 1,898,863 ________________________ (1) Fair value calculated using Level II inputs, which are based on model-derived valuations in which significant inputs and significant value drivers are observable in active markets. |
Other Significant Transactions
Other Significant Transactions (Notes) | 9 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Other Significant Transactions | Commitments and Contingencies General As of September 30, 2016 , we had commitments of approximately $379.4 million , excluding our ground lease commitments, for contracts and executed leases directly related to our operating properties and development projects. Environmental Matters We follow the policy of monitoring all of our properties, both acquisition and existing stabilized portfolio properties, for the presence of hazardous or toxic substances. While there can be no assurance that a material environmental liability does not exist, we are not currently aware of any environmental liability with respect to our stabilized portfolio properties that would have a material adverse effect on our financial condition, results of operations and cash flow, or that we believe would require additional disclosure or the recording of a loss contingency. As of September 30, 2016 , we had accrued environmental remediation liabilities of approximately $25.1 million recorded on our consolidated balance sheets in connection with certain development projects and recent development acquisitions. It is possible that we could incur additional environmental remediation costs in connection with these recent development acquisitions. However, given we are in the early stages of development on certain of these projects, potential additional environmental costs are not reasonably estimable at this time. Other Significant Transactions During the quarter ended September 30, 2016 , we settled an outstanding property damage matter and received cash proceeds totaling $5.0 million , which is included in other property income on our consolidated statements of operations. |
Net Income Available to Common
Net Income Available to Common Stockholders Per Share of the Company | 9 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share [Abstract] | |
Net Income Available to Common Stockholders Per Share of the Company | Net Income Available to Common Stockholders Per Share of the Company The following table reconciles the numerator and denominator in computing the Company’s basic and diluted per-share computations for net income available to common stockholders for the three and nine months ended September 30, 2016 and 2015 : Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 (in thousands, except share and per share amounts) Numerator: Net income attributable to Kilroy Realty Corporation $ 53,895 $ 104,759 $ 261,050 $ 205,446 Preferred dividends (3,313 ) (3,313 ) (9,938 ) (9,938 ) Allocation to participating securities (1) (426 ) (367 ) (1,244 ) (1,200 ) Numerator for basic and diluted net income available to common stockholders $ 50,156 $ 101,079 $ 249,868 $ 194,308 Denominator: Basic weighted average vested shares outstanding 92,227,016 92,150,341 92,220,522 89,077,012 Effect of dilutive securities 693,390 488,724 611,016 516,249 Diluted weighted average vested shares and common share equivalents outstanding 92,920,406 92,639,065 92,831,538 89,593,261 Basic earnings per share: Net income available to common stockholders per share $ 0.54 $ 1.10 $ 2.71 $ 2.18 Diluted earnings per share: Net income available to common stockholders per share $ 0.54 $ 1.09 $ 2.69 $ 2.17 ________________________ (1) Participating securities include nonvested shares, certain time-based RSUs and vested market measure-based RSUs. Share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are considered participating securities. The impact of potentially dilutive common shares, including stock options, RSUs and other securities are considered in our diluted earnings per share calculation for the three and nine months ended September 30, 2016 and 2015 . Certain market measure-based RSUs are not included in dilutive securities for the three and nine months ended September 30, 2016 and 2015 , as not all performance metrics had been met by the end of the applicable reporting periods. See Note 11 “Share-Based Compensation” for additional information regarding share-based compensation. |
Net Income Available to Commo29
Net Income Available to Common Unitholders Per Unit of the Operating Partnership | 9 Months Ended |
Sep. 30, 2016 | |
Earnings Per Unit [Abstract] | |
Net Income Available to Common Unitholders Per Unit of the Operating Partnership | Net Income Available to Common Unitholders Per Unit of the Operating Partnership The following table reconciles the numerator and denominator in computing the Operating Partnership’s basic and diluted per-unit computations for net income available to common unitholders for the three and nine months ended September 30, 2016 and 2015 : Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 (in thousands, except unit and per unit amounts) Numerator: Net income attributable to Kilroy Realty, L.P. $ 55,254 $ 106,640 $ 266,677 $ 209,085 Preferred distributions (3,313 ) (3,313 ) (9,938 ) (9,938 ) Allocation to participating securities (1) (426 ) (367 ) (1,244 ) (1,200 ) Numerator for basic and diluted net income available to common unitholders $ 51,515 $ 102,960 $ 255,495 $ 197,947 Denominator: Basic weighted average vested units outstanding 94,858,292 93,938,783 94,630,183 90,869,696 Effect of dilutive securities 693,390 488,724 611,016 516,249 Diluted weighted average vested units and common unit equivalents outstanding 95,551,682 94,427,507 95,241,199 91,385,945 Basic earnings per unit: Net income available to common unitholders per unit $ 0.54 $ 1.10 $ 2.70 $ 2.18 Diluted earnings per unit: Net income available to common unitholders per unit $ 0.54 $ 1.09 $ 2.68 $ 2.17 ________________________ (1) Participating securities include nonvested shares, certain time-based RSUs and vested market measure-based RSUs. Share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are considered participating securities. The impact of potentially dilutive common units, including stock options, RSUs and other securities are considered in our diluted earnings per share calculation for the three and nine months ended September 30, 2016 and 2015 . Certain market measure-based RSUs are not included in dilutive securities for the three and nine months ended September 30, 2016 and 2015 , as not all performance metrics had been met by the end of the applicable reporting periods. See Note 11 “Share-Based Compensation” for additional information regarding share-based compensation. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information of the Company | 9 Months Ended |
Sep. 30, 2016 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Cash Flow Information of the Company | Supplemental Cash Flow Information of the Company Supplemental cash flow information is included as follows (in thousands): Nine Months Ended September 30, 2016 2015 SUPPLEMENTAL CASH FLOWS INFORMATION: Cash paid for interest, net of capitalized interest of $36,468 and $37,010 as of September 30, 2016 and 2015, respectively $ 42,858 $ 45,678 NON-CASH INVESTING TRANSACTIONS: Accrual for expenditures for operating properties and development properties $ 77,161 $ 89,009 Tenant improvements funded directly by tenants $ 16,803 $ 12,944 Assumption of accrued liabilities in connection with acquisitions (Note 2) $ 4,911 $ 5,070 Release of holdback funds to third party $ — $ 9,279 NON-CASH FINANCING TRANSACTIONS: Issuance of common units of the Operating Partnership in connection with an acquisition (Note 2) $ 48,033 $ — Accrual of dividends and distributions payable to common stockholders and common unitholders $ 36,109 $ 33,353 Accrual of dividends and distributions payable to preferred stockholders and preferred unitholders $ 1,656 $ 1,656 Secured debt assumed by buyers in connection with land dispositions (Note 3) $ 2,322 $ — Exchange of common units of the Operating Partnership into shares of the Company’s common stock $ 39 $ 467 |
Supplemental Cash Flow Inform31
Supplemental Cash Flow Information of the Operating Partnership | 9 Months Ended |
Sep. 30, 2016 | |
Other Significant Noncash Transactions [Line Items] | |
Supplemental Cash Flow Information of the Operating Partnership | Supplemental Cash Flow Information of the Company Supplemental cash flow information is included as follows (in thousands): Nine Months Ended September 30, 2016 2015 SUPPLEMENTAL CASH FLOWS INFORMATION: Cash paid for interest, net of capitalized interest of $36,468 and $37,010 as of September 30, 2016 and 2015, respectively $ 42,858 $ 45,678 NON-CASH INVESTING TRANSACTIONS: Accrual for expenditures for operating properties and development properties $ 77,161 $ 89,009 Tenant improvements funded directly by tenants $ 16,803 $ 12,944 Assumption of accrued liabilities in connection with acquisitions (Note 2) $ 4,911 $ 5,070 Release of holdback funds to third party $ — $ 9,279 NON-CASH FINANCING TRANSACTIONS: Issuance of common units of the Operating Partnership in connection with an acquisition (Note 2) $ 48,033 $ — Accrual of dividends and distributions payable to common stockholders and common unitholders $ 36,109 $ 33,353 Accrual of dividends and distributions payable to preferred stockholders and preferred unitholders $ 1,656 $ 1,656 Secured debt assumed by buyers in connection with land dispositions (Note 3) $ 2,322 $ — Exchange of common units of the Operating Partnership into shares of the Company’s common stock $ 39 $ 467 |
Kilroy Realty, L.P. [Member] | |
Other Significant Noncash Transactions [Line Items] | |
Supplemental Cash Flow Information of the Operating Partnership | Supplemental Cash Flow Information of the Operating Partnership: Supplemental cash flow information is included as follows (in thousands): Nine Months Ended September 30, 2016 2015 SUPPLEMENTAL CASH FLOWS INFORMATION: Cash paid for interest, net of capitalized interest of $36,468 and $37,010 as of September 30, 2016 and 2015, respectively $ 42,858 $ 45,678 NON-CASH INVESTING TRANSACTIONS: Accrual for expenditures for operating properties and development properties $ 77,161 $ 89,009 Tenant improvements funded directly by tenants $ 16,803 $ 12,944 Assumption of accrued liabilities in connection with acquisitions (Note 2) $ 4,911 $ 5,070 Release of holdback funds to third party $ — $ 9,279 NON-CASH FINANCING TRANSACTIONS: Issuance of common units of the Operating Partnership in connection with an acquisition (Note 2) $ 48,033 $ — Accrual of dividends and distributions payable to common stockholders and common unitholders $ 36,109 $ 33,353 Accrual of dividends and distributions payable to preferred stockholders and preferred unitholders $ 1,656 $ 1,656 Secured debt assumed by buyers in connection with land dispositions (Note 3) $ 2,322 $ — |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On October 12, 2016 , aggregate dividends, distributions and dividend equivalents of $36.1 million were paid to common stockholders and common unitholders of record on September 30, 2016 and RSU holders of record on the payment date. |
Organization and Basis of Pre33
Organization and Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Consolidation policy | The consolidated financial statements of the Company include the consolidated financial position and results of operations of the Company, the Operating Partnership, the Finance Partnership, KSLLC, 100 First LLC, Redwood LLC and all of our wholly-owned and controlled subsidiaries. The consolidated financial statements of the Operating Partnership include the consolidated financial position and results of operations of the Operating Partnership, the Finance Partnership, KSLLC, Redwood LLC, 100 First LLC and all wholly-owned and controlled subsidiaries of the Operating Partnership. All intercompany balances and transactions have been eliminated in the consolidated financial statements. |
Basis of accounting | The accompanying interim financial statements have been prepared by management in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and in conjunction with the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures required for annual financial statements have been condensed or excluded pursuant to SEC rules and regulations. Accordingly, the interim financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the accompanying interim financial statements reflect all adjustments of a normal and recurring nature that are considered necessary for a fair presentation of the results for the interim periods presented. However, the results of operations for the interim periods are not necessarily indicative of the results that may be expected for the year ending December 31, 2016 . The interim financial statements for the Company and the Operating Partnership should be read in conjunction with the audited consolidated financial statements and notes thereto included in our annual report on Form 10-K for the year ended December 31, 2015 . |
New accounting pronouncements | Adoption of New Accounting Pronouncements Variable Interest Entities Effective January 1, 2016, the Company adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) No. 2015-02 (“ASU 2015-02”), which amended certain guidance with respect to the evaluation of Variable Interest Entities (“VIEs”) and when a reporting entity is required to consolidate certain legal entities. Specifically, the amendments: (i) modify the evaluation of whether limited partnerships and similar legal entities are VIEs or voting interest entities, (ii) eliminate the presumption that a general partner should consolidate a limited partnership, (iii) affect the consolidation analysis of reporting entities that are involved with VIEs, and (iv) provide a scope exception for certain entities. Under the new guidance, effective January 1, 2016, the Operating Partnership was determined to be a VIE of the Company as the Operating Partnership is a limited partnership in which the common limited partners do not have substantive kick-out rights or participating rights. However, given that the Company was deemed to be the primary beneficiary of the Operating Partnership because the Company has the ability to control the activities that most significantly impact the Operating Partnership's economic performance, the adoption of this new guidance and the conclusion that the Operating Partnership was a VIE did not have any impact on our consolidated financial statements since the conclusion to consolidate the Operating Partnership still applied. The Operating Partnership was the only new VIE identified as part of the adoption of the guidance as of January 1, 2016. At September 30, 2016 , the consolidated financial statements of the Company included one VIE in addition to the Operating Partnership, 100 First LLC (see Note 7 for further discussion of the formation transaction for this VIE), and the consolidated financial statements of the Operating Partnership included only one VIE, 100 First LLC. The Operating Partnership was determined to be the primary beneficiary of 100 First LLC because it has the ability to control the activities that most significantly impact the VIE’s economic performance. As of September 30, 2016 , the VIE’s total assets, liabilities and noncontrolling interest included on our consolidated balance sheet were approximately $191.3 million (of which $173.2 million related to real estate held for investment), approximately $11.8 million and approximately $79.0 million , respectively. Revenues, income and net assets generated by 100 First LLC may only be used to settle its contractual obligations, which primarily consist of operating expenses, capital expenditures and required distributions. At December 31, 2015 , the consolidated financial statements of the Company and the Operating Partnership included two VIEs in which we were deemed to be the primary beneficiary: Redwood LLC and one other VIE to facilitate a potential future Section 1031 Exchange to defer taxable gains on property dispositions for federal income tax purposes. At December 31, 2015 , the impact of consolidating the VIEs increased the Company’s total assets, liabilities and noncontrolling interests by approximately $203.3 million (of which $187.3 million related to real estate held for investment on our consolidated balance sheet), approximately $28.8 million and approximately $6.5 million , respectively. During the nine months ended September 30, 2016 , Redwood LLC had a VIE reconsideration event and was determined to no longer be a VIE and the VIE to facilitate a potential future Section 1031 Exchange was terminated. Reclassification of Debt Issuance Costs Effective January 1, 2016, the Company adopted FASB ASU No. 2015-03 and No. 2015-15, which requires that debt issuance costs related to a recognized debt liability be presented on the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. However, for line-of-credit arrangements, entities may defer and present debt issuance costs as an asset and amortize the costs ratably over the term of the line of credit arrangement, regardless of whether there are any outstanding borrowings on the line of credit arrangement. As a result of our adoption of the guidance, $1.1 million of deferred financing costs as of December 31, 2015 were reclassified to reduce secured debt, net and $12.0 million of deferred financing costs as of December 31, 2015 were reclassified to reduce unsecured debt, net in the December 31, 2015 balances on our consolidated balance sheets. In addition, $4.6 million of deferred financing costs relating to our unsecured line of credit as of December 31, 2015 were reclassified to prepaid expenses and other assets, net in the December 31, 2015 balances on our consolidated balance sheets. The guidance did not have a material impact on our consolidated financial statements. Recently Issued Accounting Pronouncements On August 26, 2016, the FASB issued ASU No. 2016-15 (“ASU 2016-15”) to provide guidance for areas where there is diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. ASU 2016-15 is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company does not currently anticipate that the guidance will have a material impact on our consolidated financial statements or notes to our consolidated financial statements. On June 16, 2016, the FASB issued ASU No. 2016-13 (“ASU 2016-13”) to amend the accounting for credit losses for certain financial instruments. Under the new guidance, an entity recognizes its estimate of expected credit losses as an allowance, which the FASB believes will result in more timely recognition of such losses. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company does not currently anticipate that the guidance will have a material impact on our consolidated financial statements or notes to our consolidated financial statements. On May 9, 2016, the FASB issued ASU No. 2016-12, which clarifies and provides practical expedients for certain aspects of ASU No. 2014-09, which outlines a single comprehensive model for entities to use in accounting for revenues arising from contracts with customers and notes that lease contracts with customers are a scope exception. Public business entities may elect to adopt the amendments as of the original effective date; however, adoption is required for annual reporting periods beginning after December 15, 2017. The Company is currently assessing the impact of the guidance on our consolidated financial statements and notes to our consolidated financial statements. On March 30, 2016, the FASB issued ASU No. 2016-09 (“ASU 2016-09”) to amend the accounting guidance for share-based payment accounting. The areas for simplification in ASU 2016-09 involve several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 is effective for annual periods beginning after December 15, 2016 and interim periods within those annual periods and early adoption is permitted. The Company does not currently anticipate that the guidance will have a material impact on our consolidated financial statements or notes to our consolidated financial statements. On February 25, 2016, the FASB issued ASU No. 2016-02 (“ASU 2016-02”) to amend the accounting guidance for leases. The accounting applied by a lessor is largely unchanged under ASU 2016-02. However, the standard requires lessees to recognize lease assets and lease liabilities for leases classified as operating leases on the balance sheet. Lessees will recognize in the statement of financial position a liability to make lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. If a lessee makes this election, it will recognize lease expense for such leases generally on a straight-line basis over the lease term. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018 and early adoption is permitted. The Company is currently assessing the impact of the guidance on our consolidated financial statements and notes to our consolidated financial statements. On January 5, 2016, the FASB issued ASU No. 2016-01 (“ASU 2016-01”) to amend the accounting guidance on the classification and measurement of financial instruments. The standard requires that all investments in equity securities, including other ownership interests, are carried at fair value through net income. This requirement does not apply to investments that qualify for equity method accounting or to those that result in consolidation of the investee or for which the entity has elected the predictability exception to fair value measurement. Additionally, the standard requires that the portion of the total fair value change caused by a change in instrument-specific credit risk for financial liabilities for which the fair value option has been elected would be recognized in other comprehensive income. Any accumulated amount remaining in other comprehensive income is reclassified to earnings when the liability is extinguished. ASU 2016-01 is effective for fiscal years beginning after December 15, 2017. The Company does not currently anticipate that the guidance will have a material impact on our consolidated financial statements or notes to our consolidated financial statements. |
Organization and Basis of Pre34
Organization and Basis of Presentation (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of real estate properties | As of September 30, 2016 , the following properties, in addition to our recently completed residential property, were excluded from our stabilized office portfolio. We did not have any redevelopment properties at September 30, 2016 . Number of Properties/Projects Estimated Rentable Square Feet (1) Properties held for sale (2) 1 67,995 Development projects in “ lease-up ” 2 450,000 Development projects under construction 1 700,000 ________________________ (1) Estimated rentable square feet upon completion. (2) See Note 3 “Dispositions and Real Estate Assets Held for Sale” for additional information. Our stabilized portfolio of operating properties was comprised of the following office properties at September 30, 2016 : Number of Buildings Rentable Square Feet Number of Tenants Percentage Occupied Stabilized Office Properties 101 13,605,597 530 96.6 % |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Business Combinations [Abstract] | |
Schedule of Acquisitions | During the nine months ended September 30, 2016 , we acquired the one operating property listed below from an unrelated third party. The acquisition was funded with proceeds from the Company’s unsecured revolving credit facility as well as proceeds from our capital recycling program. Property Date of Acquisition Number of Buildings Rentable Square Feet (unaudited) Purchase Price (in millions) (1) 1290-1300 Terra Bella Avenue, Mountain View, CA June 8, 2016 1 114,175 $ 55.4 ________________________ (1) In connection with this acquisition, we assumed $0.2 million in accrued liabilities that are not included in the purchase price above. |
Schedule of estimated fair values of the assets acquired and liabilities assumed | The following table summarizes the estimated fair values of the assets acquired and liabilities assumed as of the date of acquisition: Total 2016 Operating Property Acquisitions (1) Assets Land and improvements $ 28,730 Buildings and improvements (2) 27,555 Deferred leasing costs and acquisition-related intangible assets (3) 4,180 Total assets acquired 60,465 Liabilities Accounts payable, accrued expenses and other liabilities 170 Deferred revenue and acquisition-related intangible liabilities (4) 4,880 Total liabilities assumed 5,050 Net assets and liabilities acquired $ 55,415 ________________________ (1) The purchase price of the acquisition completed during the nine months ended September 30, 2016 was less than 5% of the Company’s total assets as of September 30, 2016 . (2) Represents buildings, building improvements and tenant improvements. (3) Represents in-place leases (approximately $2.5 million with a weighted average amortization period of 3.6 years) and leasing commissions (approximately $1.7 million with a weighted average amortization period of 3.7 years). (4) Represents below-market leases (approximately $4.9 million with a weighted average amortization period of 3.4 years). |
Dispositions and Real Estate 36
Dispositions and Real Estate Assets Held for Sale (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of dispositions and real estate assets held for sale | The following table summarizes the operating properties sold during the nine months ended September 30, 2016 . Location Property Type Month of Disposition Number of Buildings Rentable Square Feet Sales Price (1) (in millions) Torrey Santa Fe Properties (2) Office January 4 465,812 $ 262.3 4930, 4939 & 4955 Directors Place, San Diego, CA (3) Office July 2 136,908 49.0 Total Dispositions 6 602,720 $ 311.3 ________________________ (1) Represents gross sales price before the impact of broker commissions and closing costs. (2) The Torrey Santa Fe Properties include the following: 7525 Torrey Santa Fe, 7535 Torrey Santa Fe, 7545 Torrey Santa Fe, and 7555 Torrey Santa Fe. These properties were classified as held for sale at December 31, 2015 . (3) These properties include two operating properties totaling 136,908 rentable square feet and a 7.0 acre undeveloped land parcel. As of September 30, 2016 , the following property was classified as held for sale: Location Submarket Property Type Number of Buildings Rentable Square Feet 5717 Pacific Center Boulevard, San Diego, CA Sorrento Mesa Office 1 67,995 The major classes of assets and liabilities of the property held for sale as of September 30, 2016 were as follows: Real estate assets and other assets held for sale (in thousands) Land and improvements $ 2,693 Buildings and improvements 10,500 Total real estate held for sale 13,193 Accumulated depreciation and amortization (3,829 ) Total real estate held for sale, net 9,364 Prepaid expenses and other assets, net 76 Real estate and other assets held for sale, net $ 9,440 Liabilities of real estate assets held for sale Accounts payable, accrued expenses and other liabilities $ 74 Liabilities of real estate assets held for sale $ 74 The following table summarizes the land dispositions completed during the nine months ended September 30, 2016 : Property Submarket Month of Disposition Gross Site Acreage (unaudited) Sales Price (1) (in millions) Carlsbad Oaks - Lot 7 (2) Carlsbad January 7.6 $ 4.5 Carlsbad Oaks - Lots 4 & 5 Carlsbad June 11.2 6.0 Carlsbad Oaks - Lot 8 Carlsbad June 13.2 8.9 Total Land Dispositions (3)(4) 32.0 $ 19.4 ________________________ (1) Represents gross sales price before the impact of broker commissions and closing costs. (2) This land parcel was classified as held for sale as of December 31, 2015. (3) In connection with these land dispositions, $2.3 million of secured debt was assumed by the buyers. See Note 6 “Secured and Unsecured Debt of the Operating Partnership” for additional information. (4) The Company also disposed of a 7.0 acre undeveloped land parcel in connection with the disposition of 4930, 4939 & 4955 Directors Place, San Diego, CA included in the operating property dispositions above. |
Deferred Leasing Costs and Ac37
Deferred Leasing Costs and Acquisition-related Intangible Assets and Liabilities, net (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Intangible Assets and Liabilities Disclosure [Abstract] | |
Schedules of Deferred Leasing Costs and Acquisition-Related Intangible Assets and Liabilities, net | The following table summarizes our deferred leasing costs and acquisition-related intangible assets (acquired value of leasing costs, above-market operating leases, in-place leases and below-market ground lease obligation) and intangible liabilities (acquired value of below-market operating leases and above-market ground lease obligation) as of September 30, 2016 and December 31, 2015 : September 30, 2016 December 31, 2015 (in thousands) Deferred Leasing Costs and Acquisition-Related Intangible Assets, net: (1) Deferred leasing costs $ 229,252 $ 205,888 Accumulated amortization (85,154 ) (72,745 ) Deferred leasing costs, net 144,098 133,143 Above-market operating leases 10,209 10,989 Accumulated amortization (7,111 ) (6,739 ) Above-market operating leases, net 3,098 4,250 In-place leases 72,084 72,639 Accumulated amortization (39,121 ) (33,810 ) In-place leases, net 32,963 38,829 Below-market ground lease obligation 490 490 Accumulated amortization (36 ) (29 ) Below-market ground lease obligation, net 454 461 Total deferred leasing costs and acquisition-related intangible assets, net $ 180,613 $ 176,683 Acquisition-Related Intangible Liabilities, net: (2) Below-market operating leases $ 56,885 $ 53,502 Accumulated amortization (31,877 ) (27,074 ) Below-market operating leases, net 25,008 26,428 Above-market ground lease obligation 6,320 6,320 Accumulated amortization (500 ) (424 ) Above-market ground lease obligation, net 5,820 5,896 Total acquisition-related intangible liabilities, net $ 30,828 $ 32,324 ________________________ (1) Excludes deferred leasing costs and acquisition-related intangible assets, net related to properties held for sale as of December 31, 2015 . (2) Included in deferred revenue and acquisition-related intangible liabilities, net in the consolidated balance sheets. The following table sets forth amortization related to deferred leasing costs and acquisition-related intangibles for the three and nine months ended September 30, 2016 and 2015 : Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 (in thousands) Deferred leasing costs (1) $ 7,599 $ 6,932 $ 21,343 $ 20,847 Above-market operating leases (2) 376 487 1,152 2,135 In-place leases (1) 2,753 3,073 8,310 11,710 Below-market ground lease obligation (3) 2 2 6 6 Below-market operating leases (4) (2,261 ) (2,228 ) (6,280 ) (8,905 ) Above-market ground lease obligation (5) (26 ) (26 ) (76 ) (76 ) Total $ 8,443 $ 8,240 $ 24,455 $ 25,717 ________________________ (1) The amortization of deferred leasing costs and in-place leases is recorded to depreciation and amortization expense in the consolidated statements of operations for the periods presented. (2) The amortization of above-market operating leases is recorded as a decrease to rental income in the consolidated statements of operations for the periods presented. (3) The amortization of the below-market ground lease obligation is recorded as an increase to ground lease expense in the consolidated statements of operations for the periods presented. (4) The amortization of below-market operating leases is recorded as an increase to rental income in the consolidated statements of operations for the periods presented. (5) The amortization of the above-market ground lease obligation is recorded as a decrease to ground lease expense in the consolidated statements of operations for the periods presented. The following table sets forth the estimated annual amortization expense related to deferred leasing costs and acquisition-related intangibles as of September 30, 2016 for future periods: Year Deferred Leasing Costs Above-Market Operating Leases (1) In-Place Leases Below-Market Ground Lease Obligation (2) Below-Market Operating Leases (3) Above-Market Ground Lease Obligation (4) (in thousands) Remaining 2016 $ 7,258 $ 349 $ 2,697 $ 2 $ (2,236 ) $ (25 ) 2017 26,971 1,241 9,739 8 (8,438 ) (101 ) 2018 23,649 831 6,998 8 (7,159 ) (101 ) 2019 19,468 643 5,148 8 (4,581 ) (101 ) 2020 15,174 16 2,923 8 (2,169 ) (101 ) Thereafter 51,578 18 5,458 420 (425 ) (5,391 ) Total $ 144,098 $ 3,098 $ 32,963 $ 454 $ (25,008 ) $ (5,820 ) ________________________ (1) Represents estimated annual amortization related to above-market operating leases. Amounts will be recorded as a decrease to rental income in the consolidated statements of operations. (2) Represents estimated annual amortization related to below-market ground lease obligations. Amounts will be recorded as an increase to ground lease expense in the consolidated statements of operations. (3) Represents estimated annual amortization related to below-market operating leases. Amounts will be recorded as an increase to rental income in the consolidated statements of operations. (4) Represents estimated annual amortization related to above-market ground lease obligations. Amounts will be recorded as a decrease to ground lease expense in the consolidated statements of operations. |
Receivables (Tables)
Receivables (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Receivables [Abstract] | |
Current Receivables, net | Current receivables, net is primarily comprised of contractual rents and other lease-related obligations due from tenants. The balance consisted of the following as of September 30, 2016 and December 31, 2015 : September 30, 2016 December 31, 2015 (in thousands) Current receivables $ 11,434 $ 13,233 Allowance for uncollectible tenant receivables (1,725 ) (2,080 ) Current receivables, net (1) $ 9,709 $ 11,153 ________________________ (1) Excludes current receivables, net related to real estate held for sale at December 31, 2015 . |
Deferred Rent Receivables, net | Deferred rent receivables, net consisted of the following as of September 30, 2016 and December 31, 2015 : September 30, 2016 December 31, 2015 (in thousands) Deferred rent receivables $ 213,730 $ 191,586 Allowance for deferred rent receivables (1,526 ) (1,882 ) Deferred rent receivables, net (1) $ 212,204 $ 189,704 ________________________ (1) Excludes deferred rent receivables related to real estate held for sale at December 31, 2015 . |
Secured and Unsecured Debt of39
Secured and Unsecured Debt of the Operating Partnership (Tables) - Kilroy Realty, L.P. [Member] | 9 Months Ended |
Sep. 30, 2016 | |
Debt Instrument [Line Items] | |
Unsecured Revolving Credit Facility | The following table summarizes the balance and terms of our unsecured revolving credit facility as of September 30, 2016 and December 31, 2015 : September 30, 2016 December 31, 2015 (in thousands) Outstanding borrowings $ — $ — Remaining borrowing capacity 600,000 600,000 Total borrowing capacity (1) $ 600,000 $ 600,000 Interest rate (2) 1.58 % 1.48 % Facility fee-annual rate (3) 0.200% Maturity date July 2019 ________________________ (1) We may elect to borrow, subject to bank approval and obtaining commitments for any additional borrowing capacity, up to an additional $311.0 million under an accordion feature under the terms of the unsecured revolving credit facility and term loan facility. (2) The interest rate on our unsecured revolving credit facility is based on an annual rate of LIBOR plus 1.050% . (3) Our facility fee is paid on a quarterly basis and is calculated based on the total borrowing capacity. In addition to the facility fee, we incurred debt origination and legal costs. As of September 30, 2016 and December 31, 2015 , $3.6 million and $4.6 million , of unamortized deferred financing costs, respectively, remained to be amortized through the maturity date of our unsecured revolving credit facility, which are included in prepaid expenses and other assets, net on our consolidated balance sheets. The following table summarizes the balance and terms of our unsecured term loan facility as of September 30, 2016 and December 31, 2015 : September 30, 2016 December 31, 2015 (in thousands) Outstanding borrowings (1) $ 150,000 $ 150,000 Interest rate (2) 1.67 % 1.40 % Maturity date July 2019 ________________________ (1) As of September 30, 2016 and December 31, 2015 , $0.7 million and $0.9 million of unamortized deferred financing costs, respectively, remained to be amortized through the maturity date of our unsecured term loan facility. (2) Our unsecured term loan facility interest rate was calculated based on an annual rate of LIBOR plus 1.150% as of September 30, 2016 and December 31, 2015 |
Schedule of Debt Maturities | The following table summarizes the stated debt maturities and scheduled amortization payments of our issued and outstanding debt, excluding unamortized debt discounts, premiums and deferred financing costs, as of September 30, 2016 : Year (in thousands) Remaining 2016 $ 2,480 2017 71,692 2018 451,669 2019 265,309 2020 251,913 Thereafter 1,187,589 Total (1) (2) $ 2,230,652 ________________________ (1) Includes gross principal balance of outstanding debt before the effect of the following at September 30, 2016 : $11.4 million of unamortized deferred financing costs, $6.8 million of unamortized discounts for the unsecured senior notes and $4.9 million of unamortized premiums for the secured debt. (2) Excludes the Series A and B Notes issuable pursuant to the Note Purchase Agreement entered into in September 2016 as no Series A or B Notes were issued and outstanding under these notes as of September 30, 2016 . |
Capitalized Interest and Loan Fees | The following table sets forth gross interest expense, including debt discount/premium and deferred financing cost amortization, net of capitalized interest, for the three and nine months ended September 30, 2016 and 2015 . The interest expense capitalized was recorded as a cost of development and increased the carrying value of undeveloped land and construction in progress. Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 (in thousands) Gross interest expense $ 26,184 $ 27,386 $ 79,027 $ 82,322 Capitalized interest and deferred financing costs (11,208 ) (14,567 ) (37,838 ) (37,761 ) Interest expense $ 14,976 $ 12,819 $ 41,189 $ 44,561 |
Secured Debt [Member] | |
Debt Instrument [Line Items] | |
Schedule of Debt | The following table sets forth the composition of our secured debt as of September 30, 2016 and December 31, 2015 : Type of Debt Annual Stated Interest Rate (1) Effective Interest Rate (1)(2) Maturity Date September 30, 2016 December 31, 2015 (in thousands) Mortgage note payable (3) 4.27% 4.27% February 2018 $ 126,405 $ 128,315 Mortgage note payable (3) 4.48% 4.48% July 2027 95,161 96,354 Mortgage note payable (3) (4) 6.05% 3.50% June 2019 83,314 85,890 Mortgage note payable 6.51% 6.51% February 2017 64,703 65,563 Mortgage note payable 7.15% 7.15% May 2017 1,926 3,987 Other (5) Various Various Various — 1,809 Total secured debt $ 371,509 $ 381,918 Unamortized deferred financing costs (843 ) (1,083 ) Total secured debt, net $ 370,666 $ 380,835 ________________________ (1) All interest rates presented are fixed-rate interest rates. (2) Represents the effective interest rate including the amortization of initial issuance discounts/premiums excluding the amortization of deferred financing costs. (3) The secured debt and the related properties that secure the debt are held in a special purpose entity and the properties are not available to satisfy the debts and other obligations of the Company or the Operating Partnership. (4) Amounts reported include the amounts of unamortized debt premiums of $4.9 million and $6.2 million as of September 30, 2016 and December 31, 2015 , respectively. (5) Balance of $1.8 million as of December 31, 2015 included public facility bonds that were assumed by the buyers in connection with sales of land during the nine months ended September 30, 2016 . |
Unsecured Senior Notes [Member] | |
Debt Instrument [Line Items] | |
Schedule of Debt | The following table summarizes the balance and significant terms of the registered unsecured senior notes issued by the Operating Partnership as of September 30, 2016 and December 31, 2015 : Principal Amount as of Issuance date Maturity date Stated coupon rate Effective interest rate (1) September 30, December 31, 2015 (in thousands) 4.375% Unsecured Senior Notes (2) September 2015 October 2025 4.375% 4.440% $ 400,000 $ 400,000 Unamortized discount and deferred financing costs (4,985 ) (5,400 ) Net carrying amount $ 395,015 $ 394,600 4.250% Unsecured Senior Notes (3) July 2014 August 2029 4.250% 4.350% $ 400,000 $ 400,000 Unamortized discount and deferred financing costs (6,829 ) (7,228 ) Net carrying amount $ 393,171 $ 392,772 3.800% Unsecured Senior Notes (4) January 2013 January 2023 3.800% 3.804% $ 300,000 $ 300,000 Unamortized discount and deferred financing costs (1,725 ) (1,931 ) Net carrying amount $ 298,275 $ 298,069 4.800% Unsecured Senior Notes (4) (5) July 2011 July 2018 4.800% 4.827% $ 325,000 $ 325,000 Unamortized discount and deferred financing costs (888 ) (1,251 ) Net carrying amount $ 324,112 $ 323,749 6.625% Unsecured Senior Notes (6) May 2010 June 2020 6.625% 6.743% $ 250,000 $ 250,000 Unamortized discount and deferred financing costs (2,005 ) (2,414 ) Net carrying amount $ 247,995 $ 247,586 Total Unsecured Senior Notes, Net $ 1,658,568 $ 1,656,776 ________________________ (1) Represents the effective interest rate including the amortization of initial issuance discounts/premiums, excluding the amortization of deferred financing costs. (2) Interest on these notes is payable semi-annually in arrears on April 1st and October 1st of each year. (3) Interest on these notes is payable semi-annually in arrears on February 15th and August 15th of each year. (4) Interest on these notes is payable semi-annually in arrears on January 15th and July 15th of each year. (5) In October 2015, certain common limited partners in the Operating Partnership that previously contributed their interests in the property at 6255 W. Sunset Blvd., Los Angeles, California to the Operating Partnership entered into an agreement with the Company. Pursuant to this agreement, such common limited partners will reimburse the Company for a portion of any amounts the Company may be required to pay pursuant to its guarantee of the Operating Partnership’s 4.800% Senior Notes due 2018 or that the Company may otherwise become required to pay under applicable law with respect to such notes. (6) Interest on these notes is payable semi-annually in arrears on June 1st and December 1st of each year. |
Partners' Capital of the Oper40
Partners' Capital of the Operating Partnership (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Partners' Capital Notes [Abstract] | |
Schedule of Common Units Outstanding | The following table sets forth the number of common units held by the Company and the number of common units held by non-affiliated investors and certain of our executive officers and directors in the form of noncontrolling common units as well as the ownership interest held on each respective date: September 30, 2016 December 31, 2015 September 30, 2015 Company owned common units in the Operating Partnership 92,272,492 92,258,690 92,220,367 Company owned general partnership interest 97.2 % 98.1 % 98.1 % Noncontrolling common units of the Operating Partnership 2,631,276 1,764,775 1,788,170 Ownership interest of noncontrolling interest 2.8 % 1.9 % 1.9 % |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of share-based payment award, restricted stock units, valuation assumptions | The following table summarizes the assumptions utilized in the Monte Carlo simulation pricing model: Fair Value Assumptions Fair value per share at January 28, 2016 $57.08 Expected share price volatility 26.00% Risk-free interest rate 1.13% Remaining expected life 2.9 years |
Fair Value Measurements and D42
Fair Value Measurements and Disclosures (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair value of the company's marketable securities | The following table sets forth the fair value of our marketable securities as of September 30, 2016 and December 31, 2015 : Fair Value (Level 1) (1) September 30, 2016 December 31, 2015 Description (in thousands) Marketable securities (2) $ 14,121 $ 12,882 ________________________ (1) Based on quoted prices in active markets for identical securities. (2) The marketable securities are held in a limited rabbi trust. |
Fair value adjustment of marketable securities and deferred compensation plan liability | The following table sets forth the net gain (loss) on marketable securities recorded during the three and nine months ended September 30, 2016 and 2015 : Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Description (in thousands) (in thousands) Net gain (loss) on marketable securities $ 481 $ (681 ) $ 867 $ (171 ) |
Carrying value and fair value of company's remaining financial assets and liabilities | The following table sets forth the carrying value and the fair value of our other financial instruments as of September 30, 2016 and December 31, 2015 : September 30, 2016 December 31, 2015 Carrying Fair (1) Carrying Fair (1) (in thousands) Liabilities Secured debt, net $ 370,666 $ 383,781 $ 380,835 $ 391,611 Unsecured debt, net 1,846,672 1,982,720 1,844,634 1,898,863 ________________________ (1) Fair value calculated using Level II inputs, which are based on model-derived valuations in which significant inputs and significant value drivers are observable in active markets. |
Net Income Available to Commo43
Net Income Available to Common Stockholders Per Share of the Company (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share [Abstract] | |
Net income available to common stockholders | The following table reconciles the numerator and denominator in computing the Company’s basic and diluted per-share computations for net income available to common stockholders for the three and nine months ended September 30, 2016 and 2015 : Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 (in thousands, except share and per share amounts) Numerator: Net income attributable to Kilroy Realty Corporation $ 53,895 $ 104,759 $ 261,050 $ 205,446 Preferred dividends (3,313 ) (3,313 ) (9,938 ) (9,938 ) Allocation to participating securities (1) (426 ) (367 ) (1,244 ) (1,200 ) Numerator for basic and diluted net income available to common stockholders $ 50,156 $ 101,079 $ 249,868 $ 194,308 Denominator: Basic weighted average vested shares outstanding 92,227,016 92,150,341 92,220,522 89,077,012 Effect of dilutive securities 693,390 488,724 611,016 516,249 Diluted weighted average vested shares and common share equivalents outstanding 92,920,406 92,639,065 92,831,538 89,593,261 Basic earnings per share: Net income available to common stockholders per share $ 0.54 $ 1.10 $ 2.71 $ 2.18 Diluted earnings per share: Net income available to common stockholders per share $ 0.54 $ 1.09 $ 2.69 $ 2.17 ________________________ (1) Participating securities include nonvested shares, certain time-based RSUs and vested market measure-based RSUs. |
Net Income Available to Commo44
Net Income Available to Common Unitholders Per Unit of the Operating Partnership (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Net Income Available To Common Unitholders [Line Items] | |
Net income (loss) available to common unitholders | The following table reconciles the numerator and denominator in computing the Company’s basic and diluted per-share computations for net income available to common stockholders for the three and nine months ended September 30, 2016 and 2015 : Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 (in thousands, except share and per share amounts) Numerator: Net income attributable to Kilroy Realty Corporation $ 53,895 $ 104,759 $ 261,050 $ 205,446 Preferred dividends (3,313 ) (3,313 ) (9,938 ) (9,938 ) Allocation to participating securities (1) (426 ) (367 ) (1,244 ) (1,200 ) Numerator for basic and diluted net income available to common stockholders $ 50,156 $ 101,079 $ 249,868 $ 194,308 Denominator: Basic weighted average vested shares outstanding 92,227,016 92,150,341 92,220,522 89,077,012 Effect of dilutive securities 693,390 488,724 611,016 516,249 Diluted weighted average vested shares and common share equivalents outstanding 92,920,406 92,639,065 92,831,538 89,593,261 Basic earnings per share: Net income available to common stockholders per share $ 0.54 $ 1.10 $ 2.71 $ 2.18 Diluted earnings per share: Net income available to common stockholders per share $ 0.54 $ 1.09 $ 2.69 $ 2.17 ________________________ (1) Participating securities include nonvested shares, certain time-based RSUs and vested market measure-based RSUs. |
Kilroy Realty, L.P. [Member] | |
Net Income Available To Common Unitholders [Line Items] | |
Net income (loss) available to common unitholders | The following table reconciles the numerator and denominator in computing the Operating Partnership’s basic and diluted per-unit computations for net income available to common unitholders for the three and nine months ended September 30, 2016 and 2015 : Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 (in thousands, except unit and per unit amounts) Numerator: Net income attributable to Kilroy Realty, L.P. $ 55,254 $ 106,640 $ 266,677 $ 209,085 Preferred distributions (3,313 ) (3,313 ) (9,938 ) (9,938 ) Allocation to participating securities (1) (426 ) (367 ) (1,244 ) (1,200 ) Numerator for basic and diluted net income available to common unitholders $ 51,515 $ 102,960 $ 255,495 $ 197,947 Denominator: Basic weighted average vested units outstanding 94,858,292 93,938,783 94,630,183 90,869,696 Effect of dilutive securities 693,390 488,724 611,016 516,249 Diluted weighted average vested units and common unit equivalents outstanding 95,551,682 94,427,507 95,241,199 91,385,945 Basic earnings per unit: Net income available to common unitholders per unit $ 0.54 $ 1.10 $ 2.70 $ 2.18 Diluted earnings per unit: Net income available to common unitholders per unit $ 0.54 $ 1.09 $ 2.68 $ 2.17 ________________________ (1) Participating securities include nonvested shares, certain time-based RSUs and vested market measure-based RSUs. |
Supplemental Cash Flow Inform45
Supplemental Cash Flow Information of the Company (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of supplemental cash flows | Supplemental cash flow information is included as follows (in thousands): Nine Months Ended September 30, 2016 2015 SUPPLEMENTAL CASH FLOWS INFORMATION: Cash paid for interest, net of capitalized interest of $36,468 and $37,010 as of September 30, 2016 and 2015, respectively $ 42,858 $ 45,678 NON-CASH INVESTING TRANSACTIONS: Accrual for expenditures for operating properties and development properties $ 77,161 $ 89,009 Tenant improvements funded directly by tenants $ 16,803 $ 12,944 Assumption of accrued liabilities in connection with acquisitions (Note 2) $ 4,911 $ 5,070 Release of holdback funds to third party $ — $ 9,279 NON-CASH FINANCING TRANSACTIONS: Issuance of common units of the Operating Partnership in connection with an acquisition (Note 2) $ 48,033 $ — Accrual of dividends and distributions payable to common stockholders and common unitholders $ 36,109 $ 33,353 Accrual of dividends and distributions payable to preferred stockholders and preferred unitholders $ 1,656 $ 1,656 Secured debt assumed by buyers in connection with land dispositions (Note 3) $ 2,322 $ — Exchange of common units of the Operating Partnership into shares of the Company’s common stock $ 39 $ 467 |
Supplemental Cash Flow Inform46
Supplemental Cash Flow Information of the Operating Partnership (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Other Significant Noncash Transactions [Line Items] | |
Schedule of supplemental cash flows | Supplemental cash flow information is included as follows (in thousands): Nine Months Ended September 30, 2016 2015 SUPPLEMENTAL CASH FLOWS INFORMATION: Cash paid for interest, net of capitalized interest of $36,468 and $37,010 as of September 30, 2016 and 2015, respectively $ 42,858 $ 45,678 NON-CASH INVESTING TRANSACTIONS: Accrual for expenditures for operating properties and development properties $ 77,161 $ 89,009 Tenant improvements funded directly by tenants $ 16,803 $ 12,944 Assumption of accrued liabilities in connection with acquisitions (Note 2) $ 4,911 $ 5,070 Release of holdback funds to third party $ — $ 9,279 NON-CASH FINANCING TRANSACTIONS: Issuance of common units of the Operating Partnership in connection with an acquisition (Note 2) $ 48,033 $ — Accrual of dividends and distributions payable to common stockholders and common unitholders $ 36,109 $ 33,353 Accrual of dividends and distributions payable to preferred stockholders and preferred unitholders $ 1,656 $ 1,656 Secured debt assumed by buyers in connection with land dispositions (Note 3) $ 2,322 $ — Exchange of common units of the Operating Partnership into shares of the Company’s common stock $ 39 $ 467 |
Kilroy Realty, L.P. [Member] | |
Other Significant Noncash Transactions [Line Items] | |
Schedule of supplemental cash flows | Supplemental cash flow information is included as follows (in thousands): Nine Months Ended September 30, 2016 2015 SUPPLEMENTAL CASH FLOWS INFORMATION: Cash paid for interest, net of capitalized interest of $36,468 and $37,010 as of September 30, 2016 and 2015, respectively $ 42,858 $ 45,678 NON-CASH INVESTING TRANSACTIONS: Accrual for expenditures for operating properties and development properties $ 77,161 $ 89,009 Tenant improvements funded directly by tenants $ 16,803 $ 12,944 Assumption of accrued liabilities in connection with acquisitions (Note 2) $ 4,911 $ 5,070 Release of holdback funds to third party $ — $ 9,279 NON-CASH FINANCING TRANSACTIONS: Issuance of common units of the Operating Partnership in connection with an acquisition (Note 2) $ 48,033 $ — Accrual of dividends and distributions payable to common stockholders and common unitholders $ 36,109 $ 33,353 Accrual of dividends and distributions payable to preferred stockholders and preferred unitholders $ 1,656 $ 1,656 Secured debt assumed by buyers in connection with land dispositions (Note 3) $ 2,322 $ — |
Organization and Basis of Pre47
Organization and Basis of Presentation (Details) - Sep. 30, 2016 | Total | ft² | project | tenant | building | property | |
Stabilized office properties [Member] | |||||||
Real Estate Properties [Line Items] | |||||||
Number of Buildings | 101 | 3 | |||||
Rentable Square Feet | 13,605,597 | ||||||
Number of Tenants | tenant | 530 | ||||||
Percentage Occupied | 96.60% | ||||||
Properties held for sale [Member] | |||||||
Real Estate Properties [Line Items] | |||||||
Number of Buildings | building | 1 | ||||||
Rentable Square Feet | 67,995 | ||||||
Development projects in lease-up [Member] | |||||||
Real Estate Properties [Line Items] | |||||||
Number of Buildings | project | 2 | ||||||
Rentable Square Feet | [1] | 450,000 | |||||
Development projects under construction [Member] | |||||||
Real Estate Properties [Line Items] | |||||||
Number of Buildings | 1 | 2 | |||||
Rentable Square Feet | [1] | 700,000 | |||||
[1] | Estimated rentable square feet upon completion. |
Organization and Basis of Pre48
Organization and Basis of Presentation (Details Textual) $ in Thousands | 9 Months Ended | |||||||||
Sep. 30, 2016 | Sep. 30, 2016USD ($) | Sep. 30, 2016ft² | Sep. 30, 2016project | Sep. 30, 2016building | Sep. 30, 2016a | Sep. 30, 2016property | Dec. 31, 2015USD ($)variable_interest_entity | Sep. 30, 2015 | ||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||||||||||
Lease-up properties occupancy percentage | 95.00% | |||||||||
Common general partnership interest in the Operating Partnership | 97.20% | 98.10% | 98.10% | |||||||
Common limited partnership interest in the Operating Partnership | 2.80% | 1.90% | 1.90% | |||||||
Number of VIEs | variable_interest_entity | 2 | |||||||||
VIE assets | $ 191,300 | $ 203,300 | ||||||||
VIE liabilities | 11,800 | 28,800 | ||||||||
Noncontrolling interest in VIE | 85,473 | 6,520 | ||||||||
Kilroy Realty Finance, Inc. [Member] | ||||||||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||||||||||
Common general partnership interest in the Finance Partnership (percentage) | 1.00% | |||||||||
Kilroy Realty, L.P. [Member] | ||||||||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||||||||||
Percentage of limited partnership interest owned by Operating Partnership | 99.00% | |||||||||
Redwood LLC [Member] | ||||||||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||||||||||
Common general partnership interest in the Operating Partnership | 93.00% | |||||||||
Noncontrolling interest in VIE | 6,500 | |||||||||
100 First LLC [Member] | ||||||||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||||||||||
Common general partnership interest in the Operating Partnership | 56.00% | |||||||||
Noncontrolling interest in VIE | 79,000 | |||||||||
Office properties [Member] | ||||||||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||||||||||
Number of Buildings | 101 | 3 | ||||||||
Rentable Square Feet | ft² | 13,605,597 | |||||||||
Area of land | a | 70 | |||||||||
Office properties [Member] | Redwood LLC [Member] | ||||||||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||||||||||
Number of Buildings | property | 2 | |||||||||
Office properties [Member] | 100 First LLC [Member] | ||||||||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||||||||||
Number of Buildings | property | 1 | |||||||||
Office properties [Member] | Washington [Member] | ||||||||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||||||||||
Number of Buildings | property | 12 | |||||||||
Lease up properties [Member] | ||||||||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||||||||||
Number of Buildings | project | 2 | |||||||||
Rentable Square Feet | ft² | [1] | 450,000 | ||||||||
Development properties [Member] | ||||||||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||||||||||
Number of Buildings | 1 | 2 | ||||||||
Rentable Square Feet | ft² | [1] | 700,000 | ||||||||
Development properties [Member] | San Francisco, California [Member] | ||||||||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||||||||||
Number of Buildings | building | 2 | |||||||||
Development properties [Member] | Washington [Member] | ||||||||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||||||||||
Number of Buildings | property | 1 | |||||||||
Development sites [Member] | ||||||||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||||||||||
Number of Buildings | project | 8 | |||||||||
Properties and development projects [Member] | ||||||||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||||||||||
Property ownership percentage | 100.00% | |||||||||
Development project one [Member] | Development properties [Member] | San Francisco, California [Member] | ||||||||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||||||||||
Rentable Square Feet | ft² | 455,340 | |||||||||
Development project two [Member] | Development properties [Member] | San Francisco, California [Member] | ||||||||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||||||||||
Rentable Square Feet | ft² | 185,602 | |||||||||
Real estate held-for-investment [Member] | ||||||||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||||||||||
VIE assets | $ 173,200 | 187,300 | ||||||||
Accounting Standards Update 2015-03 and 2015-15 [Member] | Secured debt, net [Member] | ||||||||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||||||||||
Deferred financing costs | 1,100 | |||||||||
Accounting Standards Update 2015-03 and 2015-15 [Member] | Unsecured debt, net [Member] | ||||||||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||||||||||
Deferred financing costs | 12,000 | |||||||||
Accounting Standards Update 2015-03 and 2015-15 [Member] | Prepaid expenses and other current assets [Member] | ||||||||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||||||||||
Debt issuance costs, line of credit arrangements, net | $ 4,600 | |||||||||
[1] | Estimated rentable square feet upon completion. |
Acquisitions (Details)
Acquisitions (Details) $ in Thousands | Mar. 11, 2016USD ($)ashares | Mar. 31, 2016shares | Sep. 30, 2016USD ($)ft²building | |
Business Acquisition [Line Items] | ||||
Accounts payable, accrued expenses and other liabilities | [1] | $ 170 | ||
Land and improvements | [1] | 28,730 | ||
Buildings and improvements (2) | [1],[2] | 27,555 | ||
Deferred leasing costs and acquisition-related intangible assets (3) | [1],[3] | 4,180 | ||
Total assets acquired | [1] | 60,465 | ||
Deferred revenue and acquisition-related intangible liabilities (4) | [1],[4] | 4,880 | ||
Total liabilities assumed | [1] | 5,050 | ||
Net assets and liabilities acquired | [1] | 55,415 | ||
Below market lease, acquired | $ 4,900 | |||
Acquired finite lived intangible liabilities weighted average useful life | 3 years 4 months 34 days | |||
Brannan St Project [Member] | ||||
Business Acquisition [Line Items] | ||||
Total liabilities assumed | $ 4,700 | |||
Area of land | a | 1.75 | |||
Cash payment | $ 31,000 | |||
Common units issued | shares | 867,701 | 867,701 | ||
Value of common units issued | $ 48,000 | |||
Transaction costs | $ 2,400 | |||
1290-1300 Terra Bella Avenue, Mountain View, CA [Member] | ||||
Business Acquisition [Line Items] | ||||
Number of Buildings | building | 1 | |||
Rentable Square Feet | ft² | 114,175 | |||
Purchase Price (in millions) (1) | [1] | $ 55,400 | ||
In-place leases [Member] | ||||
Business Acquisition [Line Items] | ||||
Deferred leasing costs and acquisition-related intangible assets (3) | $ 2,500 | |||
Acquired finite-lived intangible assets, weighted average useful life | 3 years 7 months 6 days | |||
Deferred leasing costs and acquisition-related intangible assets, net [Member] | ||||
Business Acquisition [Line Items] | ||||
Deferred leasing costs and acquisition-related intangible assets (3) | $ 1,700 | |||
Acquired finite-lived intangible assets, weighted average useful life | 3 years 8 months 12 days | |||
[1] | In connection with this acquisition, we assumed $0.2 million in accrued liabilities that are not included in the purchase price above. | |||
[2] | Represents buildings, building improvements and tenant improvements. | |||
[3] | Represents in-place leases (approximately $2.5 million with a weighted average amortization period of 3.6 years) and leasing commissions (approximately $1.7 million with a weighted average amortization period of 3.7 years). | |||
[4] | Represents below-market leases (approximately $4.9 million with a weighted average amortization period of 3.4 years). |
Dispositions and Real Estate 50
Dispositions and Real Estate Assets Held for Sale (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016USD ($)ft²abuildingproperty | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($)ft²abuildingproperty | Sep. 30, 2015USD ($) | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Gain (loss) on sale of land | $ 0 | $ 0 | $ (295) | $ 17,268 | |
Net proceeds received from dispositions (Note 3) | 325,031 | 319,639 | |||
Proceeds from sale of property held-for-sale | 48,400 | ||||
Secured debt assumed by buyer in connection with land dispositions (Note 3) | 2,322 | 0 | |||
Real estate held-for-sale | 9,440 | 9,440 | |||
Land and improvements [Member] | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Real estate held-for-sale | 2,693 | 2,693 | |||
Buildings and improvements [Member] | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Real estate held-for-sale | 10,500 | 10,500 | |||
Total real estate held for sale [Member] | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Real estate held-for-sale | 13,193 | 13,193 | |||
Accumulated depreciation and amortization [Member] | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Real estate held-for-sale | 3,829 | 3,829 | |||
Total real estate held for sale, net [Member] | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Real estate held-for-sale | 9,364 | 9,364 | |||
Prepaid expenses and other assets, net [Member] | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Real estate held-for-sale | 76 | 76 | |||
Accounts payable, accrued expenses and other liabilities [Member] | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Real estate held-for-sale | 74 | 74 | |||
Liabilities of real estate assets held for sale [Member] | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Real estate held-for-sale | $ 74 | $ 74 | |||
Properties held for sale [Member] | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Number of Buildings | building | 1 | 1 | |||
Rentable Square Feet | ft² | 67,995 | 67,995 | |||
Kilroy Realty, L.P. [Member] | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Gain (loss) on sale of land | $ 0 | $ 0 | $ (295) | 17,268 | |
Net proceeds received from dispositions (Note 3) | 325,031 | 319,639 | |||
Secured debt assumed by buyer in connection with land dispositions (Note 3) | $ 2,322 | $ 0 | |||
Torrey Santa Fe Properties [Member] | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Number of Buildings | property | [1] | 4 | 4 | ||
Rentable Square Feet | ft² | [1] | 465,812 | 465,812 | ||
Sales Price (1) (in millions) | [1],[2] | $ 262,300 | |||
4930, 4939 & 4955 Directors Place, San Diego, CA [Member] | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Number of Buildings | property | [3] | 2 | 2 | ||
Rentable Square Feet | ft² | [3] | 136,908 | 136,908 | ||
Sales Price (1) (in millions) | [3] | $ 49,000 | |||
Area of land sold | a | 7 | 7 | |||
Torrey Santa Fe Properties and 490, 4939 & 4955 Directors Place, San Diego, CA [Member] | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Number of Buildings | property | [1],[3] | 6 | 6 | ||
Rentable Square Feet | ft² | 602,720 | 602,720 | |||
Sales Price (1) (in millions) | [2] | $ 311,300 | |||
Gain (loss) on sale of land | $ 164,300 | ||||
Carlsbad Oaks - Lot 7 [Member] | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Area of land sold | a | [4] | 7.6 | 7.6 | ||
Dispositions sales price | [4],[5] | $ 4,500 | |||
Carlsbad Oaks - Lots 4 & 5 [Member] | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Area of land sold | a | 11.2 | 11.2 | |||
Dispositions sales price | [5] | $ 6,000 | |||
Carlsbad Oaks - Lot 8 [Member] | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Area of land sold | a | 13.2 | 13.2 | |||
Dispositions sales price | [5] | $ 8,900 | |||
Carlsbad Oaks - Lots 7, 4 & 5, 8 [Member] | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Area of land sold | a | [6],[7] | 32 | 32 | ||
Dispositions sales price | [5],[6],[7] | $ 19,400 | |||
Revolving Credit Facility [Member] | January 2016 Operating Property [Member] | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Net proceeds received from dispositions (Note 3) | $ 258,100 | ||||
[1] | The Torrey Santa Fe Properties include the following: 7525 Torrey Santa Fe, 7535 Torrey Santa Fe, 7545 Torrey Santa Fe, and 7555 Torrey Santa Fe. These properties were classified as held for sale at December 31, 2015. | ||||
[2] | Represents gross sales price before the impact of broker commissions and closing costs. | ||||
[3] | These properties include two operating properties totaling 136,908 rentable square feet and a 7.0 acre undeveloped land parcel. | ||||
[4] | This land parcel was classified as held for sale as of December 31, 2015. | ||||
[5] | Represents gross sales price before the impact of broker commissions and closing costs. | ||||
[6] | In connection with these land dispositions, $2.3 million of secured debt was assumed by the buyers. See Note 6 “Secured and Unsecured Debt of the Operating Partnership” for additional information. | ||||
[7] | The Company also disposed of a 7.0 acre undeveloped land parcel in connection with the disposition of 4930, 4939 & 4955 Directors Place, San Diego, CA included in the operating property dispositions above. |
Deferred Leasing Costs and Ac51
Deferred Leasing Costs and Acquisition-related Intangible Assets and Liabilities, net (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 | ||
Deferred Leasing Costs and Acquisition-related Intangible Assets, Net | ||||
Finite-lived intangible assets, net | [1] | $ 180,613 | $ 176,683 | |
Acquisition-related Intangible Liabilities, Net | ||||
Finite lived intangible liabilities, net | [2],[3] | 30,828 | 32,324 | |
Deferred leasing costs and acquisition-related intangible assets, net [Member] | ||||
Deferred Leasing Costs and Acquisition-related Intangible Assets, Net | ||||
Finite-lived intangible assets, gross | [1] | 229,252 | 205,888 | |
Finite-lived intangible assets accumulated amortization | [1] | (85,154) | (72,745) | |
Finite-lived intangible assets, net | [1] | 144,098 | 133,143 | |
Above-market leases [Member] | ||||
Deferred Leasing Costs and Acquisition-related Intangible Assets, Net | ||||
Finite-lived intangible assets, gross | [1] | 10,209 | 10,989 | |
Finite-lived intangible assets accumulated amortization | [1] | (7,111) | (6,739) | |
Finite-lived intangible assets, net | [1] | 3,098 | [4] | 4,250 |
In-place leases [Member] | ||||
Deferred Leasing Costs and Acquisition-related Intangible Assets, Net | ||||
Finite-lived intangible assets, gross | [1] | 72,084 | 72,639 | |
Finite-lived intangible assets accumulated amortization | [1] | (39,121) | (33,810) | |
Finite-lived intangible assets, net | [1] | 32,963 | 38,829 | |
Below market ground lease obligation [Member] | ||||
Deferred Leasing Costs and Acquisition-related Intangible Assets, Net | ||||
Finite-lived intangible assets, gross | [1] | 490 | 490 | |
Finite-lived intangible assets accumulated amortization | [1] | (36) | (29) | |
Finite-lived intangible assets, net | [1] | 454 | [5] | 461 |
Below market lease [Member] | ||||
Acquisition-related Intangible Liabilities, Net | ||||
Finite lived intangible liabilities, gross | [2],[3] | 56,885 | 53,502 | |
Finite lived intangible liabilities accumulated amortization | [2],[3] | (31,877) | (27,074) | |
Finite lived intangible liabilities, net | [2],[3] | 25,008 | [6] | 26,428 |
Above-market ground lease obligation [Member] | ||||
Acquisition-related Intangible Liabilities, Net | ||||
Finite lived intangible liabilities, gross | [2],[3] | 6,320 | 6,320 | |
Finite lived intangible liabilities accumulated amortization | [2],[3] | (500) | (424) | |
Finite lived intangible liabilities, net | [2],[3] | $ 5,820 | [7] | $ 5,896 |
[1] | Excludes deferred leasing costs and acquisition-related intangible assets, net related to properties held for sale as of December 31, 2015. | |||
[2] | Included in deferred revenue and acquisition-related intangible liabilities, net in the consolidated balance sheets. | |||
[3] | {F|ahBzfndlYmZpbGluZ3MtaHJkcmoLEgZYTUxEb2MiXlhCUkxEb2NHZW5JbmZvOjVlNTE1YTY5NGVlMjQ0NzY4NjU1YzkwOTFmMzRkNjIzfFRleHRTZWxlY3Rpb246NjhBQTM0QUM4Mzk3NTE1RThGQUJGMDJCQTMyNDU2QTgM} | |||
[4] | Represents estimated annual amortization related to above-market operating leases. Amounts will be recorded as a decrease to rental income in the consolidated statements of operations. | |||
[5] | Represents estimated annual amortization related to below-market ground lease obligations. Amounts will be recorded as an increase to ground lease expense in the consolidated statements of operations. | |||
[6] | Represents estimated annual amortization related to below-market operating leases. Amounts will be recorded as an increase to rental income in the consolidated statements of operations. | |||
[7] | Represents estimated annual amortization related to above-market ground lease obligations. Amounts will be recorded as a decrease to ground lease expense in the consolidated statements of operations. |
Deferred Leasing Costs and Ac52
Deferred Leasing Costs and Acquisition-related Intangible Assets and Liabilities, net (Details 1) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | ||||
Amortization for the period related to deferred leasing costs and acquisition-related intangibles | ||||||||
Amortization of intangible assets | $ 8,443 | $ 8,240 | $ 24,455 | $ 25,717 | ||||
Estimated annual amortization related to acquisition-related intangibles | ||||||||
Finite-lived intangible assets, net | [1] | 180,613 | 180,613 | $ 176,683 | ||||
Acquisition-related Intangible Liabilities, net | [2],[3] | (30,828) | (30,828) | (32,324) | ||||
Deferred leasing costs and acquisition-related intangible assets, net [Member] | ||||||||
Amortization for the period related to deferred leasing costs and acquisition-related intangibles | ||||||||
Amortization of intangible assets | [4] | 7,599 | 6,932 | 21,343 | 20,847 | |||
Estimated annual amortization related to acquisition-related intangibles | ||||||||
Finite-lived intangible assets, remaining 2016 | 7,258 | 7,258 | ||||||
Finite-lived intangible assets, 2017 | 26,971 | 26,971 | ||||||
Finite-lived intangible assets, 2018 | 23,649 | 23,649 | ||||||
Finite-lived intangible assets, 2019 | 19,468 | 19,468 | ||||||
Finite-lived intangible assets, 2020 | 15,174 | 15,174 | ||||||
Finite-lived intangible assets, thereafter | 51,578 | 51,578 | ||||||
Finite-lived intangible assets, net | [1] | 144,098 | 144,098 | 133,143 | ||||
Above-market leases [Member] | ||||||||
Amortization for the period related to deferred leasing costs and acquisition-related intangibles | ||||||||
Amortization of intangible assets | [5] | 376 | 487 | 1,152 | 2,135 | |||
Estimated annual amortization related to acquisition-related intangibles | ||||||||
Finite-lived intangible assets, remaining 2016 | [6] | 349 | 349 | |||||
Finite-lived intangible assets, 2017 | [6] | 1,241 | 1,241 | |||||
Finite-lived intangible assets, 2018 | [6] | 831 | 831 | |||||
Finite-lived intangible assets, 2019 | [6] | 643 | 643 | |||||
Finite-lived intangible assets, 2020 | [6] | 16 | 16 | |||||
Finite-lived intangible assets, thereafter | [6] | 18 | 18 | |||||
Finite-lived intangible assets, net | [1] | 3,098 | [6] | 3,098 | [6] | 4,250 | ||
In-place leases [Member] | ||||||||
Amortization for the period related to deferred leasing costs and acquisition-related intangibles | ||||||||
Amortization of intangible assets | [4] | 2,753 | 3,073 | 8,310 | 11,710 | |||
Estimated annual amortization related to acquisition-related intangibles | ||||||||
Finite-lived intangible assets, remaining 2016 | 2,697 | 2,697 | ||||||
Finite-lived intangible assets, 2017 | 9,739 | 9,739 | ||||||
Finite-lived intangible assets, 2018 | 6,998 | 6,998 | ||||||
Finite-lived intangible assets, 2019 | 5,148 | 5,148 | ||||||
Finite-lived intangible assets, 2020 | 2,923 | 2,923 | ||||||
Finite-lived intangible assets, thereafter | 5,458 | 5,458 | ||||||
Finite-lived intangible assets, net | [1] | 32,963 | 32,963 | 38,829 | ||||
Below market ground lease obligation [Member] | ||||||||
Amortization for the period related to deferred leasing costs and acquisition-related intangibles | ||||||||
Amortization of intangible assets | [7] | 2 | 2 | 6 | 6 | |||
Estimated annual amortization related to acquisition-related intangibles | ||||||||
Finite-lived intangible assets, remaining 2016 | [8] | 2 | 2 | |||||
Finite-lived intangible assets, 2017 | [8] | 8 | 8 | |||||
Finite-lived intangible assets, 2018 | [8] | 8 | 8 | |||||
Finite-lived intangible assets, 2019 | [8] | 8 | 8 | |||||
Finite-lived intangible assets, 2020 | [8] | 8 | 8 | |||||
Finite-lived intangible assets, thereafter | [8] | 420 | 420 | |||||
Finite-lived intangible assets, net | [1] | 454 | [8] | 454 | [8] | 461 | ||
Below market lease [Member] | ||||||||
Amortization for the period related to deferred leasing costs and acquisition-related intangibles | ||||||||
Amortization of intangible liabilities | [9] | (2,261) | (2,228) | (6,280) | (8,905) | |||
Estimated annual amortization related to acquisition-related intangibles | ||||||||
Acquisition-related intangible liabilities, remaining 2016 | [10] | (2,236) | (2,236) | |||||
Acquisition-related intangible liabilities, 2017 | [10] | (8,438) | (8,438) | |||||
Acquisition-related intangible liabilities, 2018 | [10] | (7,159) | (7,159) | |||||
Acquisition-related intangible liabilities, 2019 | [10] | (4,581) | (4,581) | |||||
Acquisition-related intangible liabilities, 2020 | [10] | (2,169) | (2,169) | |||||
Acquisition-related intangible liabilities, thereafter | [10] | (425) | (425) | |||||
Acquisition-related Intangible Liabilities, net | [2],[3] | (25,008) | [10] | (25,008) | [10] | (26,428) | ||
Above-market ground lease obligation [Member] | ||||||||
Amortization for the period related to deferred leasing costs and acquisition-related intangibles | ||||||||
Amortization of intangible liabilities | [11] | (26) | $ (26) | (76) | $ (76) | |||
Estimated annual amortization related to acquisition-related intangibles | ||||||||
Acquisition-related intangible liabilities, remaining 2016 | [12] | (25) | (25) | |||||
Acquisition-related intangible liabilities, 2017 | [12] | (101) | (101) | |||||
Acquisition-related intangible liabilities, 2018 | [12] | (101) | (101) | |||||
Acquisition-related intangible liabilities, 2019 | [12] | (101) | (101) | |||||
Acquisition-related intangible liabilities, 2020 | [12] | (101) | (101) | |||||
Acquisition-related intangible liabilities, thereafter | [12] | (5,391) | (5,391) | |||||
Acquisition-related Intangible Liabilities, net | [2],[3] | $ (5,820) | [12] | $ (5,820) | [12] | $ (5,896) | ||
[1] | Excludes deferred leasing costs and acquisition-related intangible assets, net related to properties held for sale as of December 31, 2015. | |||||||
[2] | Included in deferred revenue and acquisition-related intangible liabilities, net in the consolidated balance sheets. | |||||||
[3] | {F|ahBzfndlYmZpbGluZ3MtaHJkcmoLEgZYTUxEb2MiXlhCUkxEb2NHZW5JbmZvOjVlNTE1YTY5NGVlMjQ0NzY4NjU1YzkwOTFmMzRkNjIzfFRleHRTZWxlY3Rpb246NjhBQTM0QUM4Mzk3NTE1RThGQUJGMDJCQTMyNDU2QTgM} | |||||||
[4] | The amortization of deferred leasing costs and in-place leases is recorded to depreciation and amortization expense in the consolidated statements of operations for the periods presented. | |||||||
[5] | The amortization of above-market operating leases is recorded as a decrease to rental income in the consolidated statements of operations for the periods presented. | |||||||
[6] | Represents estimated annual amortization related to above-market operating leases. Amounts will be recorded as a decrease to rental income in the consolidated statements of operations. | |||||||
[7] | The amortization of the below-market ground lease obligation is recorded as an increase to ground lease expense in the consolidated statements of operations for the periods presented. | |||||||
[8] | Represents estimated annual amortization related to below-market ground lease obligations. Amounts will be recorded as an increase to ground lease expense in the consolidated statements of operations. | |||||||
[9] | The amortization of below-market operating leases is recorded as an increase to rental income in the consolidated statements of operations for the periods presented. | |||||||
[10] | Represents estimated annual amortization related to below-market operating leases. Amounts will be recorded as an increase to rental income in the consolidated statements of operations. | |||||||
[11] | The amortization of the above-market ground lease obligation is recorded as a decrease to ground lease expense in the consolidated statements of operations for the periods presented. | |||||||
[12] | Represents estimated annual amortization related to above-market ground lease obligations. Amounts will be recorded as a decrease to ground lease expense in the consolidated statements of operations. |
Receivables (Details)
Receivables (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 | |
Current Receivables, net | |||
Current receivables | $ 11,434 | $ 13,233 | |
Allowance for uncollectible tenant receivables | (1,725) | (2,080) | |
Current receivables, net (1) | [1] | 9,709 | 11,153 |
Deferred Rent Receivables, net | |||
Deferred rent receivables | 213,730 | 191,586 | |
Allowance for deferred rent receivables | (1,526) | (1,882) | |
Deferred rent receivables, net (1) | [2] | $ 212,204 | $ 189,704 |
[1] | Excludes current receivables, net related to real estate held for sale at December 31, 2015. | ||
[2] | Excludes deferred rent receivables related to real estate held for sale at December 31, 2015. |
Secured and Unsecured Debt of54
Secured and Unsecured Debt of the Operating Partnership - Secured Debt (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2016 | Dec. 31, 2015 | ||
Debt Instrument [Line Items] | |||
Maturity Date | Jul. 1, 2019 | ||
Kilroy Realty, L.P. [Member] | |||
Debt Instrument [Line Items] | |||
Total debt | [1] | $ 2,230,652 | |
Kilroy Realty, L.P. [Member] | Secured Debt [Member] | |||
Debt Instrument [Line Items] | |||
Total debt | 371,509 | $ 381,918 | |
Unamortized deferred financing costs | (843) | (1,083) | |
Total debt, net | 370,666 | 380,835 | |
Unamortized premium | $ 4,900 | 6,200 | |
Kilroy Realty, L.P. [Member] | Secured Debt [Member] | 4.27% Mortgage Payable due Feb. 01, 2018 [Member] | |||
Debt Instrument [Line Items] | |||
Annual Stated Interest Rate (1) | [2],[3] | 4.27% | |
Effective interest rate (percent) | [2],[3],[4] | 4.27% | |
Maturity Date | [3] | Feb. 1, 2018 | |
Total debt | [3] | $ 126,405 | 128,315 |
Kilroy Realty, L.P. [Member] | Secured Debt [Member] | 4.48% Mortgage Payable due July 1, 2027 [Member] | |||
Debt Instrument [Line Items] | |||
Annual Stated Interest Rate (1) | [2],[3] | 4.48% | |
Effective interest rate (percent) | [2],[3],[4] | 4.48% | |
Maturity Date | [3] | Jul. 1, 2027 | |
Total debt | [3] | $ 95,161 | 96,354 |
Kilroy Realty, L.P. [Member] | Secured Debt [Member] | 6.05% Mortgage Payable Due June 1, 2019 [Member] | |||
Debt Instrument [Line Items] | |||
Annual Stated Interest Rate (1) | [2],[3],[5] | 6.05% | |
Effective interest rate (percent) | [2],[3],[4],[5] | 3.50% | |
Maturity Date | [3],[5] | Jun. 1, 2019 | |
Total debt | [3],[5] | $ 83,314 | 85,890 |
Kilroy Realty, L.P. [Member] | Secured Debt [Member] | 6.51% Mortgage Payable due Feb. 01, 2017 [Member] | |||
Debt Instrument [Line Items] | |||
Annual Stated Interest Rate (1) | [2] | 6.51% | |
Effective interest rate (percent) | [2],[4] | 6.51% | |
Maturity Date | Feb. 1, 2017 | ||
Total debt | $ 64,703 | 65,563 | |
Kilroy Realty, L.P. [Member] | Secured Debt [Member] | 7.15% Mortgage Payable due May 01, 2017 [Member] | |||
Debt Instrument [Line Items] | |||
Annual Stated Interest Rate (1) | [2] | 7.15% | |
Effective interest rate (percent) | [2],[4] | 7.15% | |
Maturity Date | May 1, 2017 | ||
Total debt | $ 1,926 | 3,987 | |
Kilroy Realty, L.P. [Member] | Secured Debt [Member] | Other [Member] | |||
Debt Instrument [Line Items] | |||
Total debt | [6] | $ 0 | $ 1,809 |
[1] | Includes gross principal balance of outstanding debt before the effect of the following at September 30, 2016: $11.4 million of unamortized deferred financing costs, $6.8 million of unamortized discounts for the unsecured senior notes and $4.9 million of unamortized premiums for the secured debt. | ||
[2] | All interest rates presented are fixed-rate interest rates. | ||
[3] | The secured debt and the related properties that secure the debt are held in a special purpose entity and the properties are not available to satisfy the debts and other obligations of the Company or the Operating Partnership | ||
[4] | Represents the effective interest rate including the amortization of initial issuance discounts/premiums excluding the amortization of deferred financing costs. | ||
[5] | Amounts reported include the amounts of unamortized debt premiums of $4.9 million and $6.2 million as of September 30, 2016 and December 31, 2015, respectively. | ||
[6] | Balance of $1.8 million as of December 31, 2015 included public facility bonds that were assumed by the buyers in connection with sales of land during the nine months ended September 30, 2016. |
Secured and Unsecured Debt of55
Secured and Unsecured Debt of the Operating Partnership - Unsecured Senior Notes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2016 | Dec. 31, 2015 | ||
Debt Instrument [Line Items] | ||||
Maturity date | Jul. 1, 2019 | |||
Kilroy Realty, L.P. [Member] | ||||
Debt Instrument [Line Items] | ||||
Long-term debt, gross | [1] | $ 2,230,652 | $ 2,230,652 | |
Kilroy Realty, L.P. [Member] | Unsecured Senior Notes [Member] | ||||
Debt Instrument [Line Items] | ||||
Total debt, net | $ 1,658,568 | $ 1,658,568 | $ 1,656,776 | |
Kilroy Realty, L.P. [Member] | Unsecured Senior Notes [Member] | 4.375% Unsecured Senior Notes due October 2025 [Member] | ||||
Debt Instrument [Line Items] | ||||
Maturity date | [2] | Oct. 1, 2025 | ||
Stated coupon rate | [2] | 4.375% | 4.375% | |
Effective interest rate (percent) | [2],[3] | 4.44% | 4.44% | |
Long-term debt, gross | [2] | $ 400,000 | $ 400,000 | 400,000 |
Unamortized discount and deferred financing costs | (4,985) | (4,985) | (5,400) | |
Total debt, net | $ 395,015 | $ 395,015 | 394,600 | |
Kilroy Realty, L.P. [Member] | Unsecured Senior Notes [Member] | 4.250% Unsecured Senior Notes due August 2029 [Member] | ||||
Debt Instrument [Line Items] | ||||
Maturity date | [4] | Aug. 15, 2029 | ||
Stated coupon rate | [4] | 4.25% | 4.25% | |
Effective interest rate (percent) | [3],[4] | 4.35% | 4.35% | |
Long-term debt, gross | [4] | $ 400,000 | $ 400,000 | 400,000 |
Unamortized discount and deferred financing costs | (6,829) | (6,829) | (7,228) | |
Total debt, net | $ 393,171 | $ 393,171 | 392,772 | |
Kilroy Realty, L.P. [Member] | Unsecured Senior Notes [Member] | 3.800% Unsecured Senior Note due January 2023 [Member] | ||||
Debt Instrument [Line Items] | ||||
Maturity date | [5] | Jan. 15, 2023 | ||
Stated coupon rate | [5] | 3.80% | 3.80% | |
Effective interest rate (percent) | [3],[5] | 3.804% | 3.804% | |
Long-term debt, gross | [5] | $ 300,000 | $ 300,000 | 300,000 |
Unamortized discount and deferred financing costs | (1,725) | (1,725) | (1,931) | |
Total debt, net | $ 298,275 | $ 298,275 | 298,069 | |
Kilroy Realty, L.P. [Member] | Unsecured Senior Notes [Member] | 4.800% Unsecured Senior Notes due July 2018 [Member] | ||||
Debt Instrument [Line Items] | ||||
Maturity date | [5],[6] | Jul. 15, 2018 | ||
Stated coupon rate | [5],[6] | 4.80% | 4.80% | |
Effective interest rate (percent) | [3],[5],[6] | 4.827% | 4.827% | |
Long-term debt, gross | [5],[6] | $ 325,000 | $ 325,000 | 325,000 |
Unamortized discount and deferred financing costs | (888) | (888) | (1,251) | |
Total debt, net | $ 324,112 | $ 324,112 | 323,749 | |
Kilroy Realty, L.P. [Member] | Unsecured Senior Notes [Member] | 6.625% Unsecured Senior Notes due June 2020 [Member] | ||||
Debt Instrument [Line Items] | ||||
Maturity date | [7] | Jun. 1, 2020 | ||
Stated coupon rate | [7] | 6.625% | 6.625% | |
Effective interest rate (percent) | [3],[7] | 6.743% | 6.743% | |
Long-term debt, gross | [7] | $ 250,000 | $ 250,000 | 250,000 |
Unamortized discount and deferred financing costs | (2,005) | (2,005) | (2,414) | |
Total debt, net | $ 247,995 | $ 247,995 | $ 247,586 | |
[1] | Includes gross principal balance of outstanding debt before the effect of the following at September 30, 2016: $11.4 million of unamortized deferred financing costs, $6.8 million of unamortized discounts for the unsecured senior notes and $4.9 million of unamortized premiums for the secured debt. | |||
[2] | Interest on these notes is payable semi-annually in arrears on April 1st and October 1st of each year. | |||
[3] | Represents the effective interest rate including the amortization of initial issuance discounts/premiums, excluding the amortization of deferred financing costs. | |||
[4] | Interest on these notes is payable semi-annually in arrears on February 15th and August 15th of each year. | |||
[5] | Interest on these notes is payable semi-annually in arrears on January 15th and July 15th of each year. | |||
[6] | In October 2015, certain common limited partners in the Operating Partnership that previously contributed their interests in the property at 6255 W. Sunset Blvd., Los Angeles, California to the Operating Partnership entered into an agreement with the Company. Pursuant to this agreement, such common limited partners will reimburse the Company for a portion of any amounts the Company may be required to pay pursuant to its guarantee of the Operating Partnership’s 4.800% Senior Notes due 2018 or that the Company may otherwise become required to pay under applicable law with respect to such notes. | |||
[7] | Interest on these notes is payable semi-annually in arrears on June 1st and December 1st of each year. |
- Unsecured Senior Notes - Priv
- Unsecured Senior Notes - Private Placement (Details) - Kilroy Realty, L.P. [Member] - USD ($) $ in Thousands | Sep. 30, 2016 | Sep. 14, 2016 | |
Debt Instrument [Line Items] | |||
Long-term debt, gross | [1] | $ 2,230,652 | |
Unsecured Debt [Member] | Three point three five percent Series A Unsecured Senior Notes [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | $ 175,000 | ||
Stated coupon rate | [2] | 3.35% | |
Unsecured Debt [Member] | Three point four five percent Series B Unsecured Senior Notes [Member] | |||
Debt Instrument [Line Items] | |||
Long-term debt, gross | $ 75,000 | ||
Stated coupon rate | [2] | 3.45% | |
[1] | Includes gross principal balance of outstanding debt before the effect of the following at September 30, 2016: $11.4 million of unamortized deferred financing costs, $6.8 million of unamortized discounts for the unsecured senior notes and $4.9 million of unamortized premiums for the secured debt. | ||
[2] | Interest on these notes is payable semi-annually in arrears on April 1st and October 1st of each year. |
Secured and Unsecured Debt of57
Secured and Unsecured Debt of the Operating Partnership - Unsecured Revolving Credit Facility (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2016 | Dec. 31, 2015 | ||||
Terms of the Credit Facility | |||||
Maturity date | Jul. 1, 2019 | ||||
Kilroy Realty, L.P. [Member] | |||||
Terms of the Credit Facility | |||||
Unamortized deferred financing costs | $ 11,400,000 | ||||
Kilroy Realty, L.P. [Member] | Revolving Credit Facility [Member] | |||||
Terms of the Credit Facility | |||||
Outstanding borrowings | 0 | $ 0 | |||
Remaining borrowing capacity | 600,000,000 | 600,000,000 | |||
Total borrowing capacity (1) | [1] | $ 600,000,000 | $ 600,000,000 | ||
Interest rate (percent) | [2] | 1.58% | 1.48% | ||
Facility fee-annual rate (percent) | 0.20% | [3] | 0.20% | [2] | |
Maturity date | Jul. 1, 2019 | Jul. 1, 2019 | |||
Contingent additional borrowings | $ 311,000,000 | ||||
Variable rate (percent) | 1.05% | 1.05% | |||
Unamortized deferred financing costs | $ 3,600,000 | $ 4,600,000 | |||
[1] | We may elect to borrow, subject to bank approval and obtaining commitments for any additional borrowing capacity, up to an additional $311.0 million under an accordion feature under the terms of the unsecured revolving credit facility and term loan facility. | ||||
[2] | ur unsecured revolving credit facility is based on an annual rate of LIBOR plus 1.050%. | ||||
[3] | Our facility fee is paid on a quarterly basis and is calculated based on the total borrowing capacity. In addition to the facility fee, we incurred debt origination and legal costs. As of September 30, 2016 and December 31, 2015, $3.6 million and $4.6 million, of unamortized deferred financing costs, respectively, remained to be amortized through the maturity date of our unsecured revolving credit facility, which are included in prepaid expenses and other assets, net on our consolidated balance sheets. |
Secured and Unsecured Debt of58
Secured and Unsecured Debt of the Operating Partnership - Unsecured Term Loan Facility (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Sep. 30, 2016 | Dec. 31, 2015 | |
Line of Credit Facility [Line Items] | |||
Outstanding borrowings (1) | $ 1,846,672 | $ 1,846,672 | $ 1,844,634 |
Maturity date | Jul. 1, 2019 | ||
Property damage settlement amount | 5,000 | ||
Kilroy Realty, L.P. [Member] | |||
Line of Credit Facility [Line Items] | |||
Outstanding borrowings (1) | 1,846,672 | $ 1,846,672 | 1,844,634 |
Unamortized deferred financing costs | 11,400 | 11,400 | |
Kilroy Realty, L.P. [Member] | Line of credit [Member] | $150 Million Term Loan Facility due July 2019 [Member] | |||
Line of Credit Facility [Line Items] | |||
Outstanding borrowings (1) | $ 150,000 | $ 150,000 | $ 150,000 |
Effective interest rate (percent) | 1.67% | 1.67% | 1.40% |
Maturity date | Jul. 1, 2019 | ||
Unamortized deferred financing costs | $ 700 | $ 700 | $ 900 |
Kilroy Realty, L.P. [Member] | Line of credit [Member] | $150 Million Term Loan Facility due July 2019 [Member] | LIBOR [Member] | |||
Line of Credit Facility [Line Items] | |||
Variable rate (percent) | 1.15% | 1.15% | |
Kilroy Realty, L.P. [Member] | Line of credit [Member] | $39 Million Unsecured Term Loan due July 2019 [Member] | |||
Line of Credit Facility [Line Items] | |||
Outstanding borrowings (1) | 39,000 | $ 39,000 | |
Unamortized deferred financing costs | $ 200 | $ 200 | $ 200 |
Kilroy Realty, L.P. [Member] | Line of credit [Member] | $39 Million Unsecured Term Loan due July 2019 [Member] | LIBOR [Member] | |||
Line of Credit Facility [Line Items] | |||
Variable rate (percent) | 1.15% |
Secured and Unsecured Debt of59
Secured and Unsecured Debt of the Operating Partnership - Debt Maturities (Details) - Kilroy Realty, L.P. [Member] - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 | |
Stated debt maturities and scheduled amortization payments, excluding debt discounts | |||
Remaining 2,016 | $ 2,480 | ||
2,017 | 71,692 | ||
2,018 | 451,669 | ||
2,019 | 265,309 | ||
2,020 | 251,913 | ||
Thereafter | 1,187,589 | ||
Total debt | [1] | 2,230,652 | |
Unamortized debt issuance costs | (11,400) | ||
Unsecured Senior Notes [Member] | |||
Stated debt maturities and scheduled amortization payments, excluding debt discounts | |||
Unamortized discount | (6,800) | ||
Secured Debt [Member] | |||
Stated debt maturities and scheduled amortization payments, excluding debt discounts | |||
Total debt | 371,509 | $ 381,918 | |
Unamortized premium | $ 4,900 | $ 6,200 | |
[1] | Includes gross principal balance of outstanding debt before the effect of the following at September 30, 2016: $11.4 million of unamortized deferred financing costs, $6.8 million of unamortized discounts for the unsecured senior notes and $4.9 million of unamortized premiums for the secured debt. |
Secured and Unsecured Debt of60
Secured and Unsecured Debt of the Operating Partnership - Capitalized Interest and Loan Fees (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Capitalized Interest and Loan Fees [Line Items] | ||||
Interest expense | $ 14,976 | $ 12,819 | $ 41,189 | $ 44,561 |
Kilroy Realty, L.P. [Member] | ||||
Capitalized Interest and Loan Fees [Line Items] | ||||
Gross interest expense | 26,184 | 27,386 | 79,027 | 82,322 |
Capitalized interest and deferred financing costs | (11,208) | (14,567) | (37,838) | (37,761) |
Interest expense | $ 14,976 | $ 12,819 | $ 41,189 | $ 44,561 |
Noncontrolling Interests on t61
Noncontrolling Interests on the Company's Consolidated Financial Statements - Common Units of the Operating Partnership (Details) - USD ($) $ / shares in Units, $ in Millions | Mar. 11, 2016 | Mar. 31, 2016 | Sep. 30, 2016 | Dec. 31, 2015 | Sep. 30, 2015 |
Noncontrolling Interest [Line Items] | |||||
Common general partnership interest in the Operating Partnership | 97.20% | 98.10% | 98.10% | ||
Common limited partnership interest in the Operating Partnership | 2.80% | 1.90% | 1.90% | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |||
Aggregate value upon redemption of outstanding noncontrolling common units | $ 181.7 | $ 112 | |||
Brannan St Project [Member] | |||||
Noncontrolling Interest [Line Items] | |||||
Common units issued | 867,701 | 867,701 | |||
Common stock, par value (in dollars per share) | $ 0.01 | ||||
Kilroy Realty, L.P. [Member] | Capital Units [Member] | |||||
Noncontrolling Interest [Line Items] | |||||
Common units outstanding held by common limited partners | 2,631,276 | 1,764,775 | 1,788,170 |
Noncontrolling Interests on t62
Noncontrolling Interests on the Company's Consolidated Financial Statements - Consolidated Property Partnerships (Details) $ in Thousands | 9 Months Ended | |||
Sep. 30, 2016USD ($) | Aug. 30, 2016USD ($)ft²property | Dec. 31, 2015USD ($) | Sep. 30, 2015 | |
Schedule of Equity Method Investments [Line Items] | ||||
Company owned general partnership interest | 97.20% | 98.10% | 98.10% | |
Initial contribution from noncontrolling interest in consolidated property partnership, net of transaction costs (Note 7) | $ 191,676 | |||
Noncontrolling interest in VIE | 85,473 | $ 6,520 | ||
Noncontrolling Interests in Consolidated Property Partnerships and Subsidiaries [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Initial contribution from noncontrolling interest in consolidated property partnership, net of transaction costs (Note 7) | 78,654 | |||
Total Stockholders' Equity [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Initial contribution from noncontrolling interest in consolidated property partnership, net of transaction costs (Note 7) | 113,022 | |||
Consolidated property partnerships [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Real estate investment property, valuation | $ 1,200,000 | |||
Consolidated property partnerships, tranche one [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Unrecognized tax benefits, amount of unrecorded benefit | 10,900 | |||
Third party [Member] | Consolidated property partnerships [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Number of real estate properties | property | 2 | |||
Other ownership interests, contributed capital | $ 452,900 | |||
Company owned general partnership interest | 44.00% | |||
Third party [Member] | Consolidated property partnerships, tranche one [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Other ownership interests, contributed capital | $ 191,400 | |||
Other ownership interests, contributed capital, working capital contribution | $ 2,100 | |||
Third party [Member] | Consolidated property partnerships, tranche two [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Other ownership interests, contributed capital | $ 261,500 | |||
100 First LLC [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Company owned general partnership interest | 56.00% | |||
Noncontrolling interest in VIE | $ 79,000 | |||
100 First LLC [Member] | Consolidated property partnerships, tranche one [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Area of Real Estate Property | ft² | 467,095 | |||
303 Second Street [Member] | Consolidated property partnerships, tranche two [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Area of Real Estate Property | ft² | 740,047 | |||
Redwood LLC [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Company owned general partnership interest | 93.00% | |||
Noncontrolling interest in VIE | $ 6,500 | |||
Other Noncontrolling Interests | $ 6,500 |
Noncontrolling Interests on t63
Noncontrolling Interests on the Operating Partnership's Consolidated Financial Statements - Consolidated Property Partnerships (Details) $ in Thousands | Sep. 30, 2016USD ($) | Aug. 30, 2016USD ($)property | Dec. 31, 2015USD ($) | Sep. 30, 2015 |
Schedule of Equity Method Investments [Line Items] | ||||
Company owned general partnership interest | 97.20% | 98.10% | 98.10% | |
Noncontrolling interest in VIE | $ 85,473 | $ 6,520 | ||
Consolidated property partnerships [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Real estate investment property, valuation | $ 1,200,000 | |||
Third party [Member] | Consolidated property partnerships [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Number of real estate properties | property | 2 | |||
Other ownership interests, contributed capital | $ 452,900 | |||
Company owned general partnership interest | 44.00% | |||
Third party [Member] | Consolidated property partnerships, tranche one [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Other ownership interests, contributed capital | $ 191,400 | |||
Other ownership interests, contributed capital, working capital contribution | $ 2,100 | |||
Third party [Member] | Consolidated property partnerships, tranche two [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Other ownership interests, contributed capital | $ 261,500 | |||
100 First LLC [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Company owned general partnership interest | 56.00% | |||
Noncontrolling interest in VIE | $ 79,000 | |||
Redwood LLC [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Company owned general partnership interest | 93.00% | |||
Noncontrolling interest in VIE | $ 6,500 | |||
Other Noncontrolling Interests | $ 6,500 |
Stockholders' Equity of the C64
Stockholders' Equity of the Company (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Mar. 31, 2016 | Sep. 30, 2016 | Feb. 23, 2016 | Dec. 31, 2015 | |
Common Stock of the Company [Abstract] | |||||
At the market stock offering aggregate gross sales price of common stock | $ 300,000,000 | $ 300,000,000 | |||
Shares issued to date | 92,272,492 | 92,272,492 | 92,258,690 | ||
Number of shares authorized for repurchase | 4,000,000 | ||||
Remaining number of shares authorized for repurchase | 4,935,826 | 4,935,826 | 4,988,025 | ||
Number of shares repurchased during period | 0 | 52,199 | |||
Weighted average price paid per share repurchased during period (in dollars per share) | $ 55.45 | ||||
Value of shares repurchased during period | $ 2,900,000 | ||||
Common Stock [Member] | |||||
Common Stock of the Company [Abstract] | |||||
Issuance of common stock during period, shares | 0 | ||||
Common Stock [Member] | Issuance of Equity - at the market offering [Member] | |||||
Common Stock of the Company [Abstract] | |||||
At the market stock offering aggregate gross sales price of common stock | $ 150,100,000 | $ 150,100,000 | |||
Shares issued to date | 2,007,767 | 2,007,767 | |||
At the market stock offering remaining amount available for issuance | $ 149,900,000 | $ 149,900,000 |
Partners' Capital of the Oper65
Partners' Capital of the Operating Partnership (Details) - $ / shares | Mar. 11, 2016 | Mar. 31, 2016 | Sep. 30, 2016 | Dec. 31, 2015 | Sep. 30, 2015 |
Class of Stock [Line Items] | |||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |||
General Partners' Capital Account [Abstract] | |||||
Company owned general partnership interest | 97.20% | 98.10% | 98.10% | ||
Ownership interest of noncontrolling interest | 2.80% | 1.90% | 1.90% | ||
Kilroy Realty, L.P. [Member] | Capital Units [Member] | |||||
General Partners' Capital Account [Abstract] | |||||
Company owned common units in the Operating Partnership | 92,272,492 | 92,258,690 | 92,220,367 | ||
Noncontrolling common units of the Operating Partnership | 2,631,276 | 1,764,775 | 1,788,170 | ||
Brannan St Project [Member] | |||||
Class of Stock [Line Items] | |||||
Common units issued | 867,701 | 867,701 | |||
Value per common unit issued | $ 55.36 | ||||
Common stock, par value (in dollars per share) | $ 0.01 |
Share-Based Compensation (Detai
Share-Based Compensation (Details Textual) $ / shares in Units, $ in Millions | Jan. 28, 2016USD ($)$ / sharesshares | Jan. 09, 2016USD ($) | Sep. 30, 2016USD ($)planshares | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($)planshares | Sep. 30, 2015USD ($) |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of share-based incentive compensation plans | plan | 1 | 1 | ||||
Share-based compensation expense | $ | $ 6.8 | $ 4.3 | $ 19.3 | $ 13.6 | ||
Share-based compensation expense capitalized | $ | 1.5 | $ 0.7 | 4 | $ 2.3 | ||
Share-based compensation not yet recognized | $ | $ 34.9 | $ 34.9 | ||||
Share-based compensation not yet recognized period of recognition | 1 year 11 months | |||||
Restricted Stock Units (RSUs) [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Shares granted | 294,821 | |||||
2016 Performance Based RSUs [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Shares granted | 168,077 | |||||
Percentage of shares granted | 57.00% | |||||
Vesting period | 3 years | |||||
RSUs expected to vest (in shares) | 206,907 | 206,907 | ||||
Number of shares issuable per RSU | 1 | |||||
Grant date fair value | $ | $ 9.6 | |||||
Grant date fair value (in dollars per share) | $ / shares | $ 57.08 | |||||
Remaining expected life | 2 years 11 months | |||||
2016 Time-Based RSUs [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Shares granted | 126,744 | |||||
Percentage of shares granted | 43.00% | |||||
Vesting period | 3 years | |||||
Grant date fair value | $ | $ 7.1 | |||||
Closing share price (in dollars per share) | $ / shares | $ 56.23 | |||||
2016 Special RSUs [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Shares granted | 55,713 | |||||
Grant date fair value | $ | $ 3.5 | |||||
Kilroy Realty 2006 Incentive Award Plan [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares available for grant | 1,354,143 | 1,354,143 |
Share-Based Compensation (Det67
Share-Based Compensation (Details) - 2016 Performance Based RSUs [Member] - $ / shares | Jan. 28, 2016 | Sep. 30, 2016 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Grant date fair value (in dollars per share) | $ 57.08 | |
Expected share price volatility | 26.00% | |
Risk-free interest rate | 1.13% | |
Remaining expected life | 2 years 11 months |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | Sep. 30, 2016USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments | $ 379.4 |
Accrued environmental remediation liabilities | $ 25.1 |
Fair Value Measurements and D69
Fair Value Measurements and Disclosures (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | ||
Fair value adjustment of marketable securities and deferred compensation plan liability | ||||||
Net gain (loss) on marketable securities | $ 481 | $ (681) | $ 867 | $ (171) | ||
Fair Value (Level 1) [Member] | ||||||
Assets and Liabilities Reported at Fair Value | ||||||
Marketable securities | [1],[2] | $ 14,121 | $ 14,121 | $ 12,882 | ||
[1] | Based on quoted prices in active markets for identical securities. | |||||
[2] | The marketable securities are held in a limited rabbi trust. |
Fair Value Measurements and D70
Fair Value Measurements and Disclosures (Details 1) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 | |
Carrying Value [Member] | Secured Debt [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Fair value of debt | $ 370,666 | $ 380,835 | |
Carrying Value [Member] | Unsecured Debt [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Fair value of debt | 1,846,672 | 1,844,634 | |
Fair Value (Level 2) [Member] | Fair Value [Member] | Secured Debt [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Fair value of debt | [1] | 383,781 | 391,611 |
Fair Value (Level 2) [Member] | Fair Value [Member] | Unsecured Debt [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Fair value of debt | [1] | $ 1,982,720 | $ 1,898,863 |
[1] | Fair value calculated using Level II inputs, which are based on model-derived valuations in which significant inputs and significant value drivers are observable in active markets. |
Net Income Available to Commo71
Net Income Available to Common Stockholders Per Share of the Company (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | ||
Numerator: | |||||
Net income attributable to Kilroy Realty Corporation | $ 53,895 | $ 104,759 | $ 261,050 | $ 205,446 | |
Preferred dividends | (3,313) | (3,313) | (9,938) | (9,938) | |
Allocation to participating securities (1) | [1] | (426) | (367) | (1,244) | (1,200) |
Numerator for basic and diluted net income available to common stockholders | $ 50,156 | $ 101,079 | $ 249,868 | $ 194,308 | |
Denominator: | |||||
Weighted average common shares outstanding – basic (Note 15) (in shares) | 92,227,016 | 92,150,341 | 92,220,522 | 89,077,012 | |
Effect of dilutive securities (in shares) | 693,390 | 488,724 | 611,016 | 516,249 | |
Diluted weighted average vested shares and common share equivalents outstanding (in shares) | 92,920,406 | 92,639,065 | 92,831,538 | 89,593,261 | |
Basic earnings per share: | |||||
Net income available to common stockholders per share (in dollars per share) | $ 0.54 | $ 1.10 | $ 2.71 | $ 2.18 | |
Diluted earnings per share: | |||||
Net income available to common stockholders per share (in dollars per share) | $ 0.54 | $ 1.09 | $ 2.69 | $ 2.17 | |
[1] | Participating securities include nonvested shares, certain time-based RSUs and vested market measure-based RSUs. |
Net Income Available to Commo72
Net Income Available to Common Unitholders Per Unit of the Operating Partnership (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | ||
Numerator: | |||||
Net income attributable to Kilroy Realty, L.P. | $ 53,895 | $ 104,759 | $ 261,050 | $ 205,446 | |
Preferred distributions | (3,313) | (3,313) | (9,938) | (9,938) | |
Allocation to participating securities (1) | [1] | (426) | (367) | (1,244) | (1,200) |
Numerator for basic and diluted net income available to common stockholders | $ 50,156 | $ 101,079 | $ 249,868 | $ 194,308 | |
Denominator: | |||||
Weighted average common units outstanding - basic (Note 16) (in units) | 92,227,016 | 92,150,341 | 92,220,522 | 89,077,012 | |
Effect of dilutive securities (in units) | 693,390 | 488,724 | 611,016 | 516,249 | |
Diluted weighted average vested shares and common share equivalents outstanding (in shares) | 92,920,406 | 92,639,065 | 92,831,538 | 89,593,261 | |
Basic earnings per unit: | |||||
Net income available to common stockholders per share (in dollars per share) | $ 0.54 | $ 1.10 | $ 2.71 | $ 2.18 | |
Diluted earnings per unit: | |||||
Net income available to common stockholders per share (in dollars per share) | $ 0.54 | $ 1.09 | $ 2.69 | $ 2.17 | |
Kilroy Realty, L.P. [Member] | |||||
Numerator: | |||||
Net income attributable to Kilroy Realty, L.P. | $ 55,254 | $ 106,640 | $ 266,677 | $ 209,085 | |
Preferred distributions | (3,313) | (3,313) | (9,938) | (9,938) | |
Allocation to participating securities (1) | [2] | (426) | (367) | (1,244) | (1,200) |
Numerator for basic and diluted net income available to common stockholders | $ 51,515 | $ 102,960 | $ 255,495 | $ 197,947 | |
Denominator: | |||||
Weighted average common units outstanding - basic (Note 16) (in units) | 94,858,292 | 93,938,783 | 94,630,183 | 90,869,696 | |
Effect of dilutive securities (in units) | 693,390 | 488,724 | 611,016 | 516,249 | |
Diluted weighted average vested shares and common share equivalents outstanding (in shares) | 95,551,682 | 94,427,507 | 95,241,199 | 91,385,945 | |
Basic earnings per unit: | |||||
Net income available to common stockholders per share (in dollars per share) | $ 0.54 | $ 1.10 | $ 2.70 | $ 2.18 | |
Diluted earnings per unit: | |||||
Net income available to common stockholders per share (in dollars per share) | $ 0.54 | $ 1.09 | $ 2.68 | $ 2.17 | |
[1] | Participating securities include nonvested shares, certain time-based RSUs and vested market measure-based RSUs. | ||||
[2] | Participating securities include nonvested shares, certain time-based RSUs and vested market measure-based RSUs. |
Supplemental Cash Flow Inform73
Supplemental Cash Flow Information of the Company (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
SUPPLEMENTAL CASH FLOWS INFORMATION: | ||
Cash paid for interest, net of capitalized interest of $36,468 and $37,010 as of September 30, 2016 and 2015, respectively | $ 42,858 | $ 45,678 |
Interest capitalized | 36,468 | 37,010 |
NON-CASH INVESTING TRANSACTIONS: | ||
Accrual for expenditures for operating properties and development properties | 77,161 | 89,009 |
Tenant improvements funded directly by tenants | 16,803 | 12,944 |
Assumption of accrued liabilities in connection with acquisitions (Note 2) | 4,911 | 5,070 |
Release of holdback funds to third party | 0 | 9,279 |
NON-CASH FINANCING TRANSACTIONS: | ||
Issuance of common units of the Operating Partnership in connection with an acquisition (Note 2) | 48,033 | 0 |
Accrual of dividends and distributions payable to common stockholders and common unitholders | 36,109 | 33,353 |
Accrual of dividends and distributions payable to preferred stockholders and preferred unitholders | 1,656 | 1,656 |
Secured debt assumed by buyers in connection with land dispositions (Note 3) | 2,322 | 0 |
Exchange of common units of the Operating Partnership into shares of the Company’s common stock | $ 39 | $ 467 |
Supplemental Cash Flow Inform74
Supplemental Cash Flow Information of the Operating Partnership (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
SUPPLEMENTAL CASH FLOWS INFORMATION: | ||
Cash paid for interest, net of capitalized interest of $36,468 and $37,010 as of September 30, 2016 and 2015, respectively | $ 42,858 | $ 45,678 |
Interest capitalized | 36,468 | 37,010 |
NON-CASH INVESTING TRANSACTIONS: | ||
Accrual for expenditures for operating properties and development properties | 77,161 | 89,009 |
Tenant improvements funded directly by tenants | 16,803 | 12,944 |
Assumption of accrued liabilities in connection with acquisitions (Note 2) | 4,911 | 5,070 |
Release of holdback funds to third party | 0 | 9,279 |
NON-CASH FINANCING TRANSACTIONS: | ||
Issuance of common units of the Operating Partnership in connection with an acquisition (Note 2) | 48,033 | 0 |
Accrual of dividends and distributions payable to common stockholders and common unitholders | 36,109 | 33,353 |
Accrual of dividends and distributions payable to preferred stockholders and preferred unitholders | 1,656 | 1,656 |
Secured debt assumed by buyers in connection with land dispositions (Note 3) | 2,322 | 0 |
Kilroy Realty, L.P. [Member] | ||
SUPPLEMENTAL CASH FLOWS INFORMATION: | ||
Cash paid for interest, net of capitalized interest of $36,468 and $37,010 as of September 30, 2016 and 2015, respectively | 42,858 | 45,678 |
Interest capitalized | 36,468 | 37,010 |
NON-CASH INVESTING TRANSACTIONS: | ||
Accrual for expenditures for operating properties and development properties | 77,161 | 89,009 |
Tenant improvements funded directly by tenants | 16,803 | 12,944 |
Assumption of accrued liabilities in connection with acquisitions (Note 2) | 4,911 | 5,070 |
Release of holdback funds to third party | 0 | 9,279 |
NON-CASH FINANCING TRANSACTIONS: | ||
Issuance of common units of the Operating Partnership in connection with an acquisition (Note 2) | 48,033 | 0 |
Accrual of dividends and distributions payable to common stockholders and common unitholders | 36,109 | 33,353 |
Accrual of dividends and distributions payable to preferred stockholders and preferred unitholders | 1,656 | 1,656 |
Secured debt assumed by buyers in connection with land dispositions (Note 3) | $ 2,322 | $ 0 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Thousands | Oct. 12, 2016 | Sep. 30, 2016 | Sep. 30, 2015 |
Subsequent Event [Line Items] | |||
Aggregate dividends, distributions, and dividend equivalents paid to common stockholders and common unitholders | $ 101,542 | $ 93,910 | |
Subsequent event [Member] | |||
Subsequent Event [Line Items] | |||
Aggregate dividends, distributions, and dividend equivalents paid to common stockholders and common unitholders | $ 36,100 |