Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2020 | Oct. 23, 2020 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 1-12675 | |
Entity Registrant Name | KILROY REALTY CORPORATION | |
Entity Incorporation, State Code | MD | |
Entity Tax Identification Number | 95-4598246 | |
Entity Address, Address Line One | 12200 W. Olympic Boulevard | |
Entity Address, Address Line Two | Suite 200 | |
Entity Address, City or Town | Los Angeles | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 90064 | |
City Area Code | 310 | |
Local Phone Number | 481-8400 | |
Title of 12(b) Security | Common Stock, $.01 par value | |
Security Exchange Name | NYSE | |
Trading Symbol | KRC | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 115,251,136 | |
Entity Central Index Key | 0001025996 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Kilroy Realty L.P. [Member] | ||
Entity Information [Line Items] | ||
Entity File Number | 000-54005 | |
Entity Registrant Name | KILROY REALTY, L.P. | |
Entity Incorporation, State Code | DE | |
Entity Tax Identification Number | 95-4612685 | |
Title of 12(g) Security | Common Units Representing Limited Partnership Interests | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001493976 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
REAL ESTATE ASSETS: | ||
Land and improvements | $ 1,612,224 | $ 1,466,166 |
Buildings and improvements | 6,535,637 | 5,866,477 |
Undeveloped land and construction in progress | 1,938,923 | 2,296,130 |
Total real estate assets held for investment | 10,086,784 | 9,628,773 |
Accumulated depreciation and amortization | (1,744,325) | (1,561,361) |
Total real estate assets held for investment, net | 8,342,459 | 8,067,412 |
CASH AND CASH EQUIVALENTS (Note 4) | 849,009 | 60,044 |
RESTRICTED CASH | 16,300 | 16,300 |
MARKETABLE SECURITIES (Note 10) | 25,073 | 27,098 |
CURRENT RECEIVABLES, NET | 16,083 | 26,489 |
DEFERRED RENT RECEIVABLES, NET | 375,939 | 337,937 |
DEFERRED LEASING COSTS AND ACQUISITION-RELATED INTANGIBLE ASSETS, NET | 208,306 | 212,805 |
RIGHT OF USE GROUND LEASE ASSETS (Note 9) | 95,733 | 96,348 |
PREPAID EXPENSES AND OTHER ASSETS, NET (Note 2) | 55,706 | 55,661 |
TOTAL ASSETS | 9,984,608 | 8,900,094 |
LIABILITIES: | ||
Secured debt, net (Notes 3 and 10) | 254,854 | 258,593 |
Unsecured debt, net (Notes 3, and 10) | 3,668,976 | 3,049,185 |
Unsecured line of credit (Notes 3 and 10) | 0 | 245,000 |
Accounts payable, accrued expenses and other liabilities | 458,421 | 418,848 |
Ground lease liabilities (Note 9) | 97,936 | 98,400 |
Accrued dividends and distributions (Note 15) | 59,416 | 53,219 |
Deferred revenue and acquisition-related intangible liabilities, net | 131,558 | 139,488 |
Rents received in advance and tenant security deposits | 61,483 | 66,503 |
Total liabilities | 4,732,644 | 4,329,236 |
COMMITMENTS AND CONTINGENCIES (Note 9) | ||
Stockholders’ Equity (Note 4): | ||
Common stock, $.01 par value, 280,000,000 and 150,000,000 shares authorized, respectively, 115,247,221 and 106,016,287 shares issued and outstanding, respectively | 1,152 | 1,060 |
Additional paid-in capital | 5,089,926 | 4,350,917 |
Distributions in excess of earnings | (122,936) | (58,467) |
Total stockholders’ equity | 4,968,142 | 4,293,510 |
Noncontrolling Interests (Notes 1 and 5): | ||
Common units of the Operating Partnership | 83,226 | 81,917 |
Noncontrolling interests in consolidated property partnerships | 200,596 | 195,431 |
Total noncontrolling interests | 283,822 | 277,348 |
Total equity | 5,251,964 | 4,570,858 |
TOTAL LIABILITIES AND EQUITY (CAPITAL) | 9,984,608 | 8,900,094 |
Kilroy Realty L.P. [Member] | ||
REAL ESTATE ASSETS: | ||
Land and improvements | 1,612,224 | 1,466,166 |
Buildings and improvements | 6,535,637 | 5,866,477 |
Undeveloped land and construction in progress | 1,938,923 | 2,296,130 |
Total real estate assets held for investment | 10,086,784 | 9,628,773 |
Accumulated depreciation and amortization | (1,744,325) | (1,561,361) |
Total real estate assets held for investment, net | 8,342,459 | 8,067,412 |
CASH AND CASH EQUIVALENTS (Note 4) | 849,009 | 60,044 |
RESTRICTED CASH | 16,300 | 16,300 |
MARKETABLE SECURITIES (Note 10) | 25,073 | 27,098 |
CURRENT RECEIVABLES, NET | 16,083 | 26,489 |
DEFERRED RENT RECEIVABLES, NET | 375,939 | 337,937 |
DEFERRED LEASING COSTS AND ACQUISITION-RELATED INTANGIBLE ASSETS, NET | 208,306 | 212,805 |
RIGHT OF USE GROUND LEASE ASSETS (Note 9) | 95,733 | 96,348 |
PREPAID EXPENSES AND OTHER ASSETS, NET (Note 2) | 55,706 | 55,661 |
TOTAL ASSETS | 9,984,608 | 8,900,094 |
LIABILITIES: | ||
Secured debt, net (Notes 3 and 10) | 254,854 | 258,593 |
Unsecured debt, net (Notes 3, and 10) | 3,668,976 | 3,049,185 |
Unsecured line of credit (Notes 3 and 10) | 0 | 245,000 |
Accounts payable, accrued expenses and other liabilities | 458,421 | 418,848 |
Ground lease liabilities (Note 9) | 97,936 | 98,400 |
Accrued dividends and distributions (Note 15) | 59,416 | 53,219 |
Deferred revenue and acquisition-related intangible liabilities, net | 131,558 | 139,488 |
Rents received in advance and tenant security deposits | 61,483 | 66,503 |
Total liabilities | 4,732,644 | 4,329,236 |
COMMITMENTS AND CONTINGENCIES (Note 9) | ||
Noncontrolling Interests (Notes 1 and 5): | ||
Common units, 115,247,221 and 106,016,287 held by the general partner and 1,931,574 and 2,023,287 held by common limited partners issued and outstanding, respectively (Note 6) | 5,051,368 | 4,369,758 |
Noncontrolling interests in consolidated property partnerships and subsidiaries (Note 1) | 200,596 | 201,100 |
Total capital | 5,251,964 | 4,570,858 |
TOTAL LIABILITIES AND EQUITY (CAPITAL) | $ 9,984,608 | $ 8,900,094 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 280,000,000 | 150,000,000 |
Common stock, shares issued (in shares) | 115,247,221 | 106,016,287 |
Common stock, shares outstanding (in shares) | 115,247,221 | 106,016,287 |
Common units [Member] | Kilroy Realty L.P. [Member] | ||
General partner, units issued | 115,247,221 | 106,016,287 |
General partners, units outstanding | 115,247,221 | 106,016,287 |
Limited partners, units issued | 1,931,574 | 2,023,287 |
Noncontrolling common units of the Operating Partnership (in units) | 1,931,574 | 2,023,287 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Revenue, Product and Service [Extensible List] | us-gaap:ServiceMember | |||
REVENUES | ||||
Rental income (Note 8) | $ 227,122 | $ 212,321 | $ 664,111 | $ 609,332 |
Other property income | 1,192 | 3,204 | 4,954 | 7,887 |
Total revenues | 228,314 | 215,525 | 669,065 | 617,219 |
EXPENSES | ||||
Property expenses | 39,236 | 41,308 | 116,048 | 117,993 |
Real estate taxes | 23,868 | 19,998 | 67,924 | 56,563 |
Ground leases (Note 9) | 2,119 | 2,049 | 6,766 | 6,135 |
General and administrative expenses (Notes 7 and 10) | 18,572 | 22,576 | 76,179 | 65,774 |
Leasing costs | 986 | 1,192 | 3,772 | 5,599 |
Depreciation and amortization | 71,863 | 69,230 | 226,318 | 203,617 |
Total expenses | 156,644 | 156,353 | 497,007 | 455,681 |
OTHER (EXPENSES) INCOME | ||||
Interest income and other net investment gain (Note 10) | 1,869 | 761 | 1,579 | 3,205 |
Interest expense (Note 3) | (19,468) | (11,635) | (49,796) | (34,605) |
Gains on sales of depreciable operating properties | 0 | 0 | 0 | 7,169 |
Total other (expenses) income | (17,599) | (10,874) | (48,217) | (24,231) |
NET INCOME | 54,071 | 48,298 | 123,841 | 137,307 |
Net income attributable to noncontrolling common units of the Operating Partnership | (785) | (852) | (1,857) | (2,423) |
Net income attributable to noncontrolling interests in consolidated property partnerships | (4,258) | (3,600) | (13,521) | (11,941) |
Total income attributable to noncontrolling interests | (5,043) | (4,452) | (15,378) | (14,364) |
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS (UNITHOLDERS) | $ 49,028 | $ 43,846 | $ 108,463 | $ 122,943 |
Net income available to common stockholders per share – basic (in dollars per share) | $ 0.42 | $ 0.41 | $ 0.95 | $ 1.19 |
Net income available to common stockholders per share – diluted (in dollars per share) | $ 0.42 | $ 0.41 | $ 0.95 | $ 1.18 |
Weighted average common shares outstanding – basic (in shares) | 115,226,324 | 104,841,176 | 112,405,817 | 102,252,739 |
Weighted average common shares outstanding – diluted (in shares) | 115,667,657 | 105,359,904 | 112,875,875 | 102,872,436 |
Kilroy Realty L.P. [Member] | ||||
REVENUES | ||||
Rental income (Note 8) | $ 227,122 | $ 212,321 | $ 664,111 | $ 609,332 |
Other property income | 1,192 | 3,204 | 4,954 | 7,887 |
Total revenues | 228,314 | 215,525 | 669,065 | 617,219 |
EXPENSES | ||||
Property expenses | 39,236 | 41,308 | 116,048 | 117,993 |
Real estate taxes | 23,868 | 19,998 | 67,924 | 56,563 |
Ground leases (Note 9) | 2,119 | 2,049 | 6,766 | 6,135 |
General and administrative expenses (Notes 7 and 10) | 18,572 | 22,576 | 76,179 | 65,774 |
Leasing costs | 986 | 1,192 | 3,772 | 5,599 |
Depreciation and amortization | 71,863 | 69,230 | 226,318 | 203,617 |
Total expenses | 156,644 | 156,353 | 497,007 | 455,681 |
OTHER (EXPENSES) INCOME | ||||
Interest income and other net investment gain (Note 10) | 1,869 | 761 | 1,579 | 3,205 |
Interest expense (Note 3) | (19,468) | (11,635) | (49,796) | (34,605) |
Gains on sales of depreciable operating properties | 0 | 0 | 0 | 7,169 |
Total other (expenses) income | (17,599) | (10,874) | (48,217) | (24,231) |
NET INCOME | 54,071 | 48,298 | 123,841 | 137,307 |
Total income attributable to noncontrolling interests | (4,343) | (3,709) | (13,886) | (12,309) |
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS (UNITHOLDERS) | $ 49,728 | $ 44,589 | $ 109,955 | $ 124,998 |
Net income available to common stockholders per share – basic (in dollars per share) | $ 0.42 | $ 0.41 | $ 0.95 | $ 1.18 |
Net income available to common stockholders per share – diluted (in dollars per share) | $ 0.42 | $ 0.41 | $ 0.94 | $ 1.18 |
Weighted average common shares outstanding – basic (in shares) | 117,158,160 | 106,864,463 | 114,394,706 | 104,276,187 |
Weighted average common shares outstanding – diluted (in shares) | 117,599,493 | 107,383,191 | 114,864,764 | 104,895,884 |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Distributions in Excess of Earnings [Member] | Total Stockholders' Equity [Member] | Noncontrolling Interests [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member]Distributions in Excess of Earnings [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member]Total Stockholders' Equity [Member] | Kilroy Realty L.P. [Member] | Kilroy Realty L.P. [Member]Noncontrolling Interests [Member] | Kilroy Realty L.P. [Member]Partners Capital Common Unit [Member] |
Beginning balance (in shares) at Dec. 31, 2018 | 100,746,988 | |||||||||||
Beginning balance at Dec. 31, 2018 | $ 4,201,261 | $ 1,007 | $ 3,976,953 | $ (48,053) | $ 3,929,907 | $ 271,354 | $ (3,146) | $ (3,146) | $ (3,146) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Net income | 41,794 | 36,903 | 36,903 | 4,891 | $ 41,794 | $ 4,286 | $ 37,508 | |||||
Issuance of share-based compensation awards | 2,210 | 2,210 | 2,210 | |||||||||
Non-cash amortization of share-based compensation (Note 7) | 8,817 | 8,817 | 8,817 | 8,817 | $ 8,817 | |||||||
Settlement of restricted stock units for shares of common stock (in shares) | 393,240 | 393,240 | ||||||||||
Settlement of restricted stock units for shares of common stock | 0 | $ 4 | (4) | 0 | ||||||||
Repurchase of common stock, stock options and restricted stock units (in shares) | (175,204) | |||||||||||
Repurchase of common stock, stock options and restricted stock units | (12,130) | $ (1) | (12,129) | (12,130) | ||||||||
Exchange of common units of the Operating Partnership (in shares) | 2,000 | |||||||||||
Exchange of common units of the Operating Partnership | 0 | $ 0 | 78 | 78 | (78) | |||||||
Distributions to noncontrolling interests in consolidated property partnerships | (6,309) | (6,309) | (6,309) | (6,309) | ||||||||
Adjustment for noncontrolling interest | 0 | 279 | 279 | (279) | ||||||||
Dividends declared per common share and common unit | (49,315) | (48,394) | (48,394) | (921) | ||||||||
Ending balance (in shares) at Mar. 31, 2019 | 100,967,024 | |||||||||||
Ending balance at Mar. 31, 2019 | 4,183,182 | $ 1,010 | 3,976,204 | (62,690) | 3,914,524 | 268,658 | ||||||
Beginning balance (in shares) at Dec. 31, 2018 | 100,746,988 | |||||||||||
Beginning balance at Dec. 31, 2018 | 4,201,261 | $ 1,007 | 3,976,953 | (48,053) | 3,929,907 | 271,354 | $ (3,146) | $ (3,146) | $ (3,146) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Net income | 137,307 | 137,307 | ||||||||||
Ending balance (in shares) at Sep. 30, 2019 | 106,011,916 | |||||||||||
Ending balance at Sep. 30, 2019 | 4,539,509 | $ 1,060 | 4,342,296 | (78,707) | 4,264,649 | 274,860 | ||||||
Beginning balance (in shares) at Mar. 31, 2019 | 100,967,024 | |||||||||||
Beginning balance at Mar. 31, 2019 | 4,183,182 | $ 1,010 | 3,976,204 | (62,690) | 3,914,524 | 268,658 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Net income | 47,215 | 42,194 | 42,194 | 5,021 | 47,215 | 4,314 | $ 42,901 | |||||
Issuance of share-based compensation awards | 820 | 820 | 820 | |||||||||
Non-cash amortization of share-based compensation (Note 7) | 8,732 | 8,732 | 8,732 | 8,732 | $ 8,732 | |||||||
Exercise of stock options (in shares) | 1,500 | 1,500 | ||||||||||
Exercise of stock options | 64 | 64 | 64 | |||||||||
Settlement of restricted stock units for shares of common stock (in shares) | 16,270 | 16,270 | ||||||||||
Settlement of restricted stock units for shares of common stock | 0 | 0 | ||||||||||
Repurchase of common stock, stock options and restricted stock units (in shares) | (12,759) | |||||||||||
Repurchase of common stock, stock options and restricted stock units | (793) | (793) | (793) | |||||||||
Distributions to noncontrolling interests in consolidated property partnerships | (1,487) | (1,487) | (1,487) | (1,487) | ||||||||
Adjustment for noncontrolling interest | 0 | (160) | (160) | 160 | ||||||||
Dividends declared per common share and common unit | (50,830) | (49,849) | (49,849) | (981) | ||||||||
Ending balance (in shares) at Jun. 30, 2019 | 100,972,035 | |||||||||||
Ending balance at Jun. 30, 2019 | 4,186,903 | $ 1,010 | 3,984,867 | (70,345) | 3,915,532 | 271,371 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Net income | 48,298 | 43,846 | 43,846 | 4,452 | 48,298 | 3,709 | $ 44,589 | |||||
Issuance of common stock (in shares) | 5,000,000 | |||||||||||
Issuance of common stock (Note 4) | 353,904 | $ 50 | 353,854 | 353,904 | ||||||||
Issuance of share-based compensation awards | 839 | 839 | 839 | |||||||||
Non-cash amortization of share-based compensation (Note 7) | 6,808 | 6,808 | 6,808 | 6,808 | $ 6,808 | |||||||
Exercise of stock options (in shares) | 15,000 | 15,000 | ||||||||||
Exercise of stock options | 639 | 639 | 639 | |||||||||
Settlement of restricted stock units for shares of common stock (in shares) | 46,149 | 46,149 | ||||||||||
Settlement of restricted stock units for shares of common stock | 0 | $ 1 | (1) | 0 | ||||||||
Repurchase of common stock, stock options and restricted stock units (in shares) | (21,268) | |||||||||||
Repurchase of common stock, stock options and restricted stock units | (1,652) | $ (1) | (1,651) | (1,652) | ||||||||
Distributions to noncontrolling interests in consolidated property partnerships | (3,041) | (3,041) | (3,041) | (3,041) | ||||||||
Adjustment for noncontrolling interest | 0 | (3,059) | (3,059) | 3,059 | ||||||||
Dividends declared per common share and common unit | (53,189) | (52,208) | (52,208) | (981) | ||||||||
Ending balance (in shares) at Sep. 30, 2019 | 106,011,916 | |||||||||||
Ending balance at Sep. 30, 2019 | $ 4,539,509 | $ 1,060 | 4,342,296 | (78,707) | 4,264,649 | 274,860 | ||||||
Beginning balance (in shares) at Dec. 31, 2019 | 106,016,287 | 106,016,287 | ||||||||||
Beginning balance at Dec. 31, 2019 | $ 4,570,858 | $ 1,060 | 4,350,917 | (58,467) | 4,293,510 | 277,348 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Net income | 45,418 | 39,817 | 39,817 | 5,601 | 45,418 | 5,029 | $ 40,389 | |||||
Issuance of common stock (in shares) | 8,897,110 | |||||||||||
Issuance of common stock (Note 4) | 721,794 | $ 89 | 721,705 | 721,794 | ||||||||
Issuance of share-based compensation awards | 1,720 | 1,720 | 1,720 | |||||||||
Non-cash amortization of share-based compensation (Note 7) | 8,653 | 8,653 | 8,653 | 8,653 | $ 8,653 | |||||||
Settlement of restricted stock units for shares of common stock (in shares) | 269,972 | 269,972 | ||||||||||
Settlement of restricted stock units for shares of common stock | 0 | $ 3 | (3) | 0 | ||||||||
Repurchase of common stock, stock options and restricted stock units (in shares) | (117,445) | |||||||||||
Repurchase of common stock, stock options and restricted stock units | (9,799) | $ (1) | (9,798) | (9,799) | ||||||||
Exchange of common units of the Operating Partnership (in shares) | 2,000 | |||||||||||
Exchange of common units of the Operating Partnership | 0 | 81 | 81 | (81) | ||||||||
Distributions to noncontrolling interests in consolidated property partnerships | (2,617) | (2,617) | $ (2,617) | (2,617) | ||||||||
Adjustment for noncontrolling interest | 0 | (6,094) | (6,094) | 6,094 | ||||||||
Dividends declared per common share and common unit | (58,512) | (57,532) | (57,532) | (980) | ||||||||
Ending balance (in shares) at Mar. 31, 2020 | 115,067,924 | |||||||||||
Ending balance at Mar. 31, 2020 | $ 5,277,515 | $ 1,151 | 5,067,181 | (76,182) | 4,992,150 | 285,365 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201602Member | us-gaap:AccountingStandardsUpdate201602member | ||||||||||
Beginning balance (in shares) at Dec. 31, 2019 | 106,016,287 | 106,016,287 | ||||||||||
Beginning balance at Dec. 31, 2019 | $ 4,570,858 | $ 1,060 | 4,350,917 | (58,467) | 4,293,510 | 277,348 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Net income | $ 123,841 | $ 123,841 | ||||||||||
Ending balance (in shares) at Sep. 30, 2020 | 115,247,221 | 115,247,221 | ||||||||||
Ending balance at Sep. 30, 2020 | $ 5,251,964 | $ 1,152 | 5,089,926 | (122,936) | 4,968,142 | 283,822 | ||||||
Beginning balance (in shares) at Mar. 31, 2020 | 115,067,924 | |||||||||||
Beginning balance at Mar. 31, 2020 | 5,277,515 | $ 1,151 | 5,067,181 | (76,182) | 4,992,150 | 285,365 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Net income | 24,352 | 19,618 | 19,618 | 4,734 | 24,352 | 4,514 | $ 19,838 | |||||
Issuance of common stock (in shares) | 0 | |||||||||||
Issuance of common stock (Note 4) | (45) | $ 0 | (45) | (45) | ||||||||
Issuance of share-based compensation awards | 805 | 805 | 805 | |||||||||
Non-cash amortization of share-based compensation (Note 7) | 13,576 | 13,576 | 13,576 | 13,576 | $ 13,576 | |||||||
Settlement of restricted stock units for shares of common stock (in shares) | 33,581 | 33,581 | ||||||||||
Settlement of restricted stock units for shares of common stock | 0 | $ 0 | 0 | 0 | ||||||||
Repurchase of common stock, stock options and restricted stock units (in shares) | (11,668) | |||||||||||
Repurchase of common stock, stock options and restricted stock units | (735) | $ 0 | (735) | (735) | ||||||||
Exchange of common units of the Operating Partnership (in shares) | 86,701 | |||||||||||
Exchange of common units of the Operating Partnership | 0 | $ 1 | 3,761 | 3,762 | (3,762) | |||||||
Distributions to noncontrolling interests in consolidated property partnerships | (4,281) | (4,281) | (4,281) | (4,281) | ||||||||
Adjustment for noncontrolling interest | 0 | (181) | (181) | 181 | ||||||||
Dividends declared per common share and common unit | (57,598) | (56,659) | (56,659) | (939) | ||||||||
Ending balance (in shares) at Jun. 30, 2020 | 115,176,538 | |||||||||||
Ending balance at Jun. 30, 2020 | 5,253,589 | $ 1,152 | 5,084,362 | (113,223) | 4,972,291 | 281,298 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Net income | 54,071 | 49,028 | 49,028 | 5,043 | 54,071 | 4,343 | $ 49,728 | |||||
Issuance of common stock (in shares) | 0 | |||||||||||
Issuance of common stock (Note 4) | (74) | $ 0 | (74) | (74) | ||||||||
Issuance of share-based compensation awards | 1,101 | 1,101 | 1,101 | |||||||||
Non-cash amortization of share-based compensation (Note 7) | 7,794 | 7,794 | 7,794 | 7,794 | $ 7,794 | |||||||
Settlement of restricted stock units for shares of common stock (in shares) | 126,740 | 126,740 | ||||||||||
Settlement of restricted stock units for shares of common stock | 0 | $ 1 | (1) | 0 | ||||||||
Repurchase of common stock, stock options and restricted stock units (in shares) | (59,069) | |||||||||||
Repurchase of common stock, stock options and restricted stock units | (3,353) | $ (1) | (3,352) | (3,353) | ||||||||
Exchange of common units of the Operating Partnership (in shares) | 3,012 | |||||||||||
Exchange of common units of the Operating Partnership | 0 | $ 0 | 129 | 129 | (129) | |||||||
Distributions to noncontrolling interests in consolidated property partnerships | (1,458) | (1,458) | $ (1,458) | $ (1,458) | ||||||||
Adjustment for noncontrolling interest | 0 | (33) | (33) | 33 | ||||||||
Dividends declared per common share and common unit | $ (59,706) | (58,741) | (58,741) | (965) | ||||||||
Ending balance (in shares) at Sep. 30, 2020 | 115,247,221 | 115,247,221 | ||||||||||
Ending balance at Sep. 30, 2020 | $ 5,251,964 | $ 1,152 | $ 5,089,926 | $ (122,936) | $ 4,968,142 | $ 283,822 |
CONSOLIDATED STATEMENTS OF EQ_2
CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) - $ / shares | 3 Months Ended | |||||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | |
Statement of Stockholders' Equity [Abstract] | ||||||
Dividends declared per common share and common unit (in dollars per share) | $ 0.50 | $ 0.485 | $ 0.485 | $ 0.485 | $ 0.485 | $ 0.455 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 123,841 | $ 137,307 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization of real estate assets and leasing costs | 218,841 | 199,967 |
Depreciation of non-real estate furniture, fixtures and equipment | 7,477 | 3,650 |
Revenue reversals (recoveries) for doubtful accounts (Note 8) | 14,205 | (3,685) |
Non-cash amortization of share-based compensation awards | 24,290 | 20,200 |
Non-cash amortization of deferred financing costs and debt discounts and premiums | 2,252 | 911 |
Non-cash amortization of net below market rents | (6,269) | (6,241) |
Gain on sale of depreciable operating properties | 0 | (7,169) |
Non-cash amortization of deferred revenue related to tenant-funded tenant improvements | (13,114) | (14,947) |
Straight-line rents | (51,890) | (48,725) |
Amortization of right of use ground lease assets | 615 | 453 |
Net change in other operating assets | (4,245) | (24,752) |
Net change in other operating liabilities | 47,977 | 44,421 |
Net cash provided by operating activities | 363,980 | 301,390 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Expenditures for development properties and undeveloped land | (386,237) | (554,951) |
Expenditures for operating properties and other capital assets | (89,464) | (99,479) |
Expenditures for acquisition of undeveloped land | 0 | (40,027) |
Net proceeds received from dispositions | 0 | 17,271 |
Net increase in acquisition-related deposits | 0 | (49,998) |
Net cash used in investing activities | (475,701) | (727,184) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Net proceeds from issuance of common stock (Note 4) | 721,675 | 353,904 |
Proceeds from the issuance of unsecured debt (Note 3) | 772,297 | 499,390 |
Borrowings on unsecured revolving credit facility (Note 3) | 190,000 | 630,000 |
Repayments on unsecured revolving credit facility (Note 3) | (435,000) | (675,000) |
Principal payments and repayments of secured debt (Note 3) | (3,834) | (75,844) |
Repayments of unsecured debt | (150,000) | 0 |
Financing costs | (6,216) | (5,548) |
Repurchase of common stock and restricted stock units | (13,887) | (14,269) |
Distributions to noncontrolling interests in consolidated property partnerships | (8,363) | (10,844) |
Dividends and distributions paid to common stockholders and common unitholders | (165,986) | (143,812) |
Proceeds from exercise of stock options | 0 | 703 |
Net cash provided by financing activities | 900,686 | 558,680 |
Net increase in cash and cash equivalents and restricted cash | 788,965 | 132,886 |
Cash and cash equivalents and restricted cash, beginning of period | 76,344 | 171,034 |
Cash and cash equivalents and restricted cash, end of period | 865,309 | 303,920 |
Kilroy Realty L.P. [Member] | ||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | 123,841 | 137,307 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization of real estate assets and leasing costs | 218,841 | 199,967 |
Depreciation of non-real estate furniture, fixtures and equipment | 7,477 | 3,650 |
Revenue reversals (recoveries) for doubtful accounts (Note 8) | 14,205 | (3,685) |
Non-cash amortization of share-based compensation awards | 24,290 | 20,200 |
Non-cash amortization of deferred financing costs and debt discounts and premiums | 2,252 | 911 |
Non-cash amortization of net below market rents | (6,269) | (6,241) |
Gain on sale of depreciable operating properties | 0 | (7,169) |
Non-cash amortization of deferred revenue related to tenant-funded tenant improvements | (13,114) | (14,947) |
Straight-line rents | (51,890) | (48,725) |
Amortization of right of use ground lease assets | 615 | 453 |
Net change in other operating assets | (4,245) | (24,752) |
Net change in other operating liabilities | 47,977 | 44,421 |
Net cash provided by operating activities | 363,980 | 301,390 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Expenditures for development properties and undeveloped land | (386,237) | (554,951) |
Expenditures for operating properties and other capital assets | (89,464) | (99,479) |
Expenditures for acquisition of undeveloped land | 0 | (40,027) |
Net proceeds received from dispositions | 0 | 17,271 |
Net increase in acquisition-related deposits | 0 | (49,998) |
Net cash used in investing activities | (475,701) | (727,184) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Net proceeds from issuance of common stock (Note 4) | 721,675 | 353,904 |
Proceeds from the issuance of unsecured debt (Note 3) | 772,297 | 499,390 |
Borrowings on unsecured revolving credit facility (Note 3) | 190,000 | 630,000 |
Repayments on unsecured revolving credit facility (Note 3) | (435,000) | (675,000) |
Principal payments and repayments of secured debt (Note 3) | (3,834) | (75,844) |
Repayments of unsecured debt | (150,000) | 0 |
Financing costs | (6,216) | (5,548) |
Repurchase of common stock and restricted stock units | (13,887) | (14,269) |
Distributions to noncontrolling interests in consolidated property partnerships | (8,363) | (10,844) |
Dividends and distributions paid to common stockholders and common unitholders | (165,986) | (143,812) |
Proceeds from exercise of stock options | 0 | 703 |
Net cash provided by financing activities | 900,686 | 558,680 |
Net increase in cash and cash equivalents and restricted cash | 788,965 | 132,886 |
Cash and cash equivalents and restricted cash, beginning of period | 76,344 | 171,034 |
Cash and cash equivalents and restricted cash, end of period | $ 865,309 | $ 303,920 |
CONSOLIDATED STATEMENTS OF CAPI
CONSOLIDATED STATEMENTS OF CAPITAL (KILROY REALTY, L.P.) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201602Member | |||||||
Increase (Decrease) in Partners' Capital [Roll Forward] | ||||||||
Net income | $ 54,071 | $ 24,352 | $ 45,418 | $ 48,298 | $ 47,215 | $ 41,794 | $ 123,841 | $ 137,307 |
Non-cash amortization of share-based compensation (Note 7) | 7,794 | 13,576 | 8,653 | 6,808 | 8,732 | 8,817 | ||
Settlement of restricted stock units | 0 | 0 | 0 | 0 | 0 | 0 | ||
Distributions to noncontrolling interests in consolidated property partnerships | (1,458) | (4,281) | (2,617) | (3,041) | (1,487) | (6,309) | ||
Noncontrolling Interests [Member] | ||||||||
Increase (Decrease) in Partners' Capital [Roll Forward] | ||||||||
Net income | 5,043 | 4,734 | 5,601 | 4,452 | 5,021 | 4,891 | ||
Distributions to noncontrolling interests in consolidated property partnerships | (1,458) | (4,281) | $ (2,617) | (3,041) | (1,487) | (6,309) | ||
Kilroy Realty L.P. [Member] | ||||||||
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201602member | |||||||
Increase (Decrease) in Partners' Capital [Roll Forward] | ||||||||
Beginning balance | 5,253,589 | 5,277,515 | $ 4,570,858 | 4,186,903 | 4,183,182 | 4,201,261 | 4,570,858 | 4,201,261 |
Net income | 54,071 | 24,352 | 45,418 | 48,298 | 47,215 | 41,794 | 123,841 | 137,307 |
Issuance of common units (Note 4) | (74) | (45) | 721,794 | 353,904 | ||||
Issuance of share-based compensation awards | 1,101 | 805 | 1,720 | 839 | 820 | 2,210 | ||
Non-cash amortization of share-based compensation (Note 7) | 7,794 | 13,576 | 8,653 | 6,808 | 8,732 | 8,817 | ||
Exercise of stock options | 639 | 64 | ||||||
Settlement of restricted stock units | 0 | 0 | 0 | 0 | 0 | 0 | ||
Repurchase of common units, stock options and restricted stock units | (3,353) | (735) | (9,799) | (1,652) | (793) | (12,130) | ||
Distributions to noncontrolling interests in consolidated property partnerships | (1,458) | (4,281) | (2,617) | (3,041) | (1,487) | (6,309) | ||
Dividends declared per common unit | (59,706) | (57,598) | (58,512) | (53,189) | (50,830) | (49,315) | ||
Ending balance | $ 5,251,964 | $ 5,253,589 | $ 5,277,515 | $ 4,539,509 | $ 4,186,903 | $ 4,183,182 | $ 5,251,964 | $ 4,539,509 |
Kilroy Realty L.P. [Member] | Partners' Capital [Member] | ||||||||
Increase (Decrease) in Partners' Capital [Roll Forward] | ||||||||
Beginning balance (in units) | 117,111,124 | 117,089,211 | 108,039,574 | 102,995,322 | 102,990,311 | 102,772,275 | 108,039,574 | 102,772,275 |
Beginning balance | $ 5,049,844 | $ 5,074,003 | $ 4,369,758 | $ 3,988,538 | $ 3,987,644 | $ 4,003,700 | $ 4,369,758 | $ 4,003,700 |
Net income | $ 49,728 | $ 19,838 | $ 40,389 | $ 44,589 | 42,901 | 37,508 | ||
Issuance of common units (in units) | 0 | 0 | 8,897,110 | 5,000,000 | ||||
Issuance of common units (Note 4) | $ (74) | $ (45) | $ 721,794 | $ 353,904 | ||||
Issuance of share-based compensation awards | 1,101 | 805 | 1,720 | 839 | 820 | 2,210 | ||
Non-cash amortization of share-based compensation (Note 7) | $ 7,794 | $ 13,576 | $ 8,653 | $ 6,808 | $ 8,732 | $ 8,817 | ||
Exercise of stock options (in shares) | 15,000 | 1,500 | ||||||
Exercise of stock options | $ 639 | $ 64 | ||||||
Settlement of restricted stock units (in units) | 126,740 | 33,581 | 269,972 | 46,149 | 16,270 | 393,240 | ||
Repurchase of common units, stock options and restricted stock units (in units) | (59,069) | (11,668) | (117,445) | (21,268) | (12,759) | (175,204) | ||
Repurchase of common units, stock options and restricted stock units | $ (3,353) | $ (735) | $ (9,799) | $ (1,652) | $ (793) | $ (12,130) | ||
Contribution of noncontrolling interests in consolidated subsidiary | 6,034 | |||||||
Dividends declared per common unit | $ (59,706) | $ (57,598) | $ (58,512) | $ (53,189) | $ (50,830) | $ (49,315) | ||
Ending balance (in units) | 117,178,795 | 117,111,124 | 117,089,211 | 108,035,203 | 102,995,322 | 102,990,311 | 117,178,795 | 108,035,203 |
Ending balance | $ 5,051,368 | $ 5,049,844 | $ 5,074,003 | $ 4,340,476 | $ 3,988,538 | $ 3,987,644 | $ 5,051,368 | $ 4,340,476 |
Kilroy Realty L.P. [Member] | Noncontrolling Interests [Member] | ||||||||
Increase (Decrease) in Partners' Capital [Roll Forward] | ||||||||
Beginning balance | 203,745 | 203,512 | 201,100 | 198,365 | 195,538 | 197,561 | 201,100 | 197,561 |
Net income | 4,343 | 4,514 | 5,029 | 3,709 | 4,314 | 4,286 | ||
Contribution of noncontrolling interests in consolidated subsidiary | (6,034) | |||||||
Distributions to noncontrolling interests in consolidated property partnerships | (1,458) | (4,281) | (2,617) | (3,041) | (1,487) | (6,309) | ||
Ending balance | $ 200,596 | $ 203,745 | $ 203,512 | $ 199,033 | $ 198,365 | 195,538 | $ 200,596 | 199,033 |
Cumulative Effect, Period of Adoption, Adjustment [Member] | Kilroy Realty L.P. [Member] | ||||||||
Increase (Decrease) in Partners' Capital [Roll Forward] | ||||||||
Beginning balance | (3,146) | (3,146) | ||||||
Cumulative Effect, Period of Adoption, Adjustment [Member] | Kilroy Realty L.P. [Member] | Partners' Capital [Member] | ||||||||
Increase (Decrease) in Partners' Capital [Roll Forward] | ||||||||
Beginning balance | $ (3,146) | $ (3,146) |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CAPITAL (KILROY REALTY, L.P.) (Parenthetical) - $ / shares | 3 Months Ended | |||||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | |
Kilroy Realty L.P. [Member] | ||||||
Dividends declared per common unit (in dollars per unit) | $ 0.50 | $ 0.485 | $ 0.485 | $ 0.485 | $ 0.485 | $ 0.455 |
Organization, Ownership and Bas
Organization, Ownership and Basis of Presentation | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization, Ownership and Basis of Presentation | Organization, Ownership and Basis of Presentation Organization and Ownership Kilroy Realty Corporation (the “Company”) is a self-administered real estate investment trust (“REIT”) active in premier office and mixed-use 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 Greater Los Angeles, 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”). 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 properties at September 30, 2020 : Number of Buildings Rentable Square Feet Number of Tenants Percentage Occupied Percentage Leased Stabilized Office Properties (1) 114 14,329,607 461 92.2 % 95.5 % ________________________ (1) Includes stabilized retail space. Number of Number of Units 2020 Average Occupancy Stabilized Residential Property 1 200 87.8 % Our stabilized portfolio includes all of our properties with the exception of development and redevelopment properties currently committed for construction, under construction, or in the tenant improvement phase, undeveloped land, recently completed residential properties not yet stabilized and real estate assets held for sale. 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 properties in the tenant improvement phase as office properties that we are developing or redeveloping where the project has reached cold shell condition and is ready for tenant improvements, which may require additional major base building construction before being placed in service. Projects in the tenant improvement phase are added to our stabilized portfolio once the project reaches the earlier of 95% occupancy or one year from the date of the cessation of major base building construction activities. Costs capitalized to construction in progress for development and redevelopment properties are transferred to land and improvements, buildings and improvements, and deferred leasing costs on our consolidated balance sheets at the historical cost of the property as the projects are placed in service. During the nine months ended September 30, 2020 , we added two development projects to our stabilized portfolio consisting of 750,370 square feet of office space in San Francisco, California and 95,871 square feet of retail space in San Diego, California. As of September 30, 2020 , the following properties were excluded from our stabilized portfolio. We did not have any redevelopment properties or properties held for sale at September 30, 2020 . Number of Properties/Projects Estimated Rentable Square Feet (1) / Units In-process development projects - tenant improvement 4 1,435,000 In-process development projects - under construction (2) 3 856,000 Completed residential development project (3) 1 608 units ________________________ (1) Estimated rentable square feet upon completion. (2) In addition to the estimated office and life science rentable square feet noted above, development projects under construction also include 193 residential units. (3) Represents all three recently completed residential phases of our mixed-use development in San Diego, California that are not yet stabilized. Our stabilized portfolio also excludes our future development pipeline, which as of September 30, 2020 was comprised of five future development sites, representing approximately 61 gross acres of undeveloped land. As of September 30, 2020 , 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 eight office properties, one development project in the tenant improvement phase and one future development project located in the state of Washington. All of our properties and development projects are 100% owned, excluding four office properties owned by three consolidated property partnerships. Two of the three consolidated property partnerships, 100 First Street Member, LLC (“100 First LLC”) and 303 Second Street Member, LLC (“303 Second LLC”), each owned one office property in San Francisco, California through subsidiary REITs. As of September 30, 2020 , the Company owned a 56% common equity interest in both 100 First LLC and 303 Second LLC. The third consolidated property partnership, Redwood City Partners, LLC (“Redwood LLC”) owned two office properties in Redwood City, California. As of September 30, 2020 , the Company owned an approximate 93% common equity interest in Redwood LLC. The remaining interests in all three property partnerships were owned by unrelated third parties. 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, 303 Second LLC, 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, 303 Second LLC, 100 First LLC, Redwood LLC and all of our wholly-owned and controlled subsidiaries. All intercompany balances and transactions have been eliminated in the consolidated financial statements. As of September 30, 2020 , the Company owned an approximate 98.4% common general partnership interest in the Operating Partnership. The remaining approximate 1.6% common limited partnership interest in the Operating Partnership as of September 30, 2020 was owned by non-affiliated investors and certain of our executive officers and directors. 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”. With the exception of the Operating Partnership and our consolidated property partnerships, 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, 2020 . 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, 2019 . Variable Interest Entities The Operating Partnership is a variable interest entity (“VIE”) that is consolidated by the Company as the primary beneficiary as the Operating Partnership is a limited partnership in which the common limited partners do not have substantive kick-out or participating rights. At September 30, 2020 , the consolidated financial statements of the Company included two VIEs in addition to the Operating Partnership: 100 First LLC and 303 Second LLC. At September 30, 2020 , the Company and the Operating Partnership were determined to be the primary beneficiaries of these two VIEs since we had the ability to control the activities that most significantly impact each of the VIEs’ economic performance. As of September 30, 2020 , the two VIEs’ total assets, liabilities and noncontrolling interests included on our consolidated balance sheet were approximately $477.6 million (of which $395.0 million related to real estate held for investment), approximately $35.3 million and approximately $194.9 million , respectively. Revenues, income and net assets generated by 100 First LLC and 303 Second LLC may only be used to settle their contractual obligations, which primarily consist of operating expenses, capital expenditures and required distributions. At December 31, 2019 , the consolidated financial statements of the Company included four VIEs in which we were deemed to be the primary beneficiary (in addition to the Operating Partnership): two of the consolidated property partnerships, 100 First LLC and 303 Second LLC, and two entities established during the fourth quarter of 2019 to facilitate a Section 1031 Exchange. At December 31, 2019, the Company and the Operating Partnership were determined to be the primary beneficiaries of these four VIEs since we had the ability to control the activities that most significantly impact each of the VIEs’ economic performance. At December 31, 2019 , the impact of consolidating the VIEs increased the Company’s total assets, liabilities and noncontrolling interests on our consolidated balance sheet by approximately $676.7 million (of which $598.0 million related to real estate held for investment), approximately $40.1 million and approximately $189.6 million , respectively. Accounting Pronouncements Adopted January 1, 2020 ASU No. 2016-13 “Financial Instruments - Credit Losses (Topic 326)” Effective January 1, 2020, we adopted Financial Accounting Standards Board (“FASB”) FASB Accounting Standards Update (“ASU”) No. 2016-13 (“ASU 2016-13”), which amends 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. In November 2018, the FASB released ASU No. 2018-19 “Codification Improvements to Topic 326, Financial Instruments - Credit Losses.” This ASU clarifies that receivables arising from operating leases are not within the scope of Subtopic 326-20 “Financial Instruments – Credit Losses.” Instead, impairment of receivables arising from operating leases should be accounted for under Subtopic 842-30 “Leases – Lessor.” The adoption did not have a material impact on our consolidated financial statements or notes to our consolidated financial statements. ASU No. 2018-13 “Fair Value Measurement (Topic 820)” Effective January 1, 2020, we adopted FASB ASU No. 2018-13 (“ASU 2018-13”), which amends the disclosure requirements for fair value measurements. The amendments in ASU 2018-13 include new, modified and eliminated disclosure requirements and are the result of a broader disclosure project called FASB Concepts Statement, Conceptual Framework for Financial Reporting - Chapter 8: Notes to Financial Statements (the “Concepts Statement”), which the FASB finalized on August 28, 2018. The FASB used the guidance in the Concepts Statement to improve the effectiveness of Topic 820’s disclosure requirements. The adoption did not have a material impact on our consolidated financial statements or notes to our consolidated financial statements. ASU No. 2018-15 “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40)” Effective January 1, 2020, we adopted FASB ASU No. 2018-15 (“ASU 2018-15”), which amends a customer’s accounting for implementation costs incurred in a cloud computing arrangement that is a service contract. ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The adoption did not have a material impact on our consolidated financial statements or notes to our consolidated financial statements. COVID-19 Pandemic The global impact of the COVID-19 pandemic continues to evolve rapidly and, as cases of the illness caused by the virus have continued to be identified in additional countries, many countries, including the United States, have reacted by instituting or re-instituting quarantines and restrictions on travel. In addition, all the states where we own properties and/or have development projects (i.e., California and Washington), have reacted to the COVID-19 pandemic by instituting quarantines, restrictions on travel, “shelter in place” rules, restrictions on types of business that may continue to operate and/or restrictions on types of construction projects that may continue. COVID-19 Lease Modification Accounting Relief Due to the business disruptions and challenges severely affecting the global economy caused by the COVID-19 pandemic, many lessors may be required to provide rent deferrals and other lease concessions to lessees. While the lease modification guidance in Accounting Standards Codification (“ASC”) Topic 842 (“Topic 842”) addresses routine changes to lease terms resulting from negotiations between the lessee and the lessor, this guidance did not contemplate concessions being so rapidly executed to address the sudden liquidity constraints of some lessees arising from the COVID-19 pandemic and restrictions intended to prevent its spread. |
Prepaid Expenses and Other Asse
Prepaid Expenses and Other Assets, Net | 9 Months Ended |
Sep. 30, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Prepaid Expenses and Other Assets, Net | Prepaid Expenses and Other Assets, Net Prepaid expenses and other assets, net consisted of the following at September 30, 2020 and December 31, 2019 : September 30, 2020 December 31, 2019 (in thousands) Furniture, fixtures and other long-lived assets, net $ 42,899 $ 35,286 Prepaid expenses 12,807 18,724 Note receivable (1) — 1,651 Total prepaid expenses and other assets, net $ 55,706 $ 55,661 ________________________ (1) During the nine months ended September 30, 2020 , the balance of the note receivable was written-off and the note receivable was placed on non-accrual status. We do not recognize interest income on non-accrual financing receivables. As of December 31, 2019 the note receivable was shown net of a valuation allowance of approximately $3.6 million |
Secured and Unsecured Debt of t
Secured and Unsecured Debt of the Operating Partnership | 9 Months Ended |
Sep. 30, 2020 | |
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 The Company generally guarantees all of the Operating Partnership’s unsecured debt obligations including the unsecured revolving credit facility, the unsecured term loan facility and all of the unsecured senior notes. Unsecured Senior Notes - Registered Offering In August 2020, the Operating Partnership issued $425.0 million aggregate principal amount of green unsecured senior notes in a registered public offering. The outstanding balance of the unsecured senior notes is included in unsecured debt, net of an initial issuance discount of $2.7 million , on our consolidated balance sheets. The unsecured senior notes, which are scheduled to mature on November 15, 2032, require semi-annual interest payments each May and November based on a stated annual interest rate of 2.500% . The Operating Partnership may redeem the notes at any time prior to August 15, 2032, either in whole or in part, subject to the payment of an early redemption premium prior to a par call option period commencing three months prior to maturity. Unsecured Senior Notes - Private Placement In April 2020, the Operating Partnership entered into a Note Purchase Agreement in connection with the issuance and sale of $350.0 million principal amount of the Operating Partnership’s 4.27% Senior Notes due January 31, 2031 (the “Notes”), pursuant to a private placement. The Notes mature on their due date, 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 April 18 and October 18 of each year beginning October 18, 2020. The Operating Partnership may, at its option and upon notice to the purchasers of the Notes, prepay at any time all, or from time to time, any part of the principal amount then outstanding (in an amount not less than 5% of the aggregate principal amount 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 Notes, the Company entered into an agreement whereby it will guarantee the payment by the Operating Partnership of all amounts due with respect to the Notes and the performance by the Operating Partnership of its obligations under the Note Purchase Agreement. Unsecured Revolving Credit Facility and Term Loan Facility The following table summarizes the balance and terms of our unsecured revolving credit facility as of September 30, 2020 and December 31, 2019 : September 30, 2020 December 31, 2019 (in thousands) Outstanding borrowings $ — $ 245,000 Remaining borrowing capacity 750,000 505,000 Total borrowing capacity (1) $ 750,000 $ 750,000 Interest rate (2) 1.15 % 2.76 % Facility fee-annual rate (3) 0.200% Maturity date July 2022 ________________________ (1) We may elect to borrow, subject to bank approval and obtaining commitments for any additional borrowing capacity, up to an additional $600.0 million under an accordion feature under the terms of the unsecured revolving credit facility and unsecured term loan facility. (2) Our unsecured revolving credit facility interest rate was calculated based on the contractual rate of LIBOR plus 1.000% as of September 30, 2020 and December 31, 2019 . (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, 2020 and December 31, 2019 , $2.4 million and $3.4 million of unamortized deferred financing costs, respectively, which are included in prepaid expenses and other assets, net on our consolidated balance sheets, remained to be amortized through the maturity date of our unsecured revolving credit facility. The Company intends to borrow under the unsecured revolving credit facility from time to time for general corporate purposes, to finance development and redevelopment expenditures, to fund potential acquisitions, to potentially repay long-term debt and to supplement cash balances given uncertainties and volatility in market conditions. In August 2020, the Company repaid in full the $150.0 million unsecured term loan facility. The following table summarizes the balance and terms of our unsecured term loan facility as of December 31, 2019 : December 31, 2019 (in thousands) Outstanding borrowings $ 150,000 Remaining borrowing capacity — Total borrowing capacity (1) $ 150,000 Interest rate (2) 2.85 % Undrawn facility fee-annual rate 0.200 % Maturity date July 2022 ________________________ (1) As of December 31, 2019 , $0.7 million of unamortized deferred financing costs 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 the contractual rate of LIBOR plus 1.100% as of December 31, 2019 . Debt Covenants and Restrictions The unsecured revolving credit facility, the unsecured term loan facility, the unsecured senior notes, the Series A and B Notes due 2026, Series A and B Notes due 2027 and 2029, and Notes due 2031 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, 2020 . Debt Maturities The following table summarizes the stated debt maturities and scheduled amortization payments as of September 30, 2020 : Year (in thousands) Remaining 2020 $ 1,304 2021 5,342 2022 5,554 2023 305,775 2024 431,006 2025 406,245 Thereafter 2,800,442 Total aggregate principal value (1) $ 3,955,668 ________________________ (1) Includes gross principal balance of outstanding debt before the effect of the following at September 30, 2020 : $23.3 million of unamortized deferred financing costs for the unsecured senior notes and secured debt and $8.5 million of unamortized discounts for the unsecured senior notes. 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, 2020 and 2019 . 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, 2020 2019 2020 2019 (in thousands) Gross interest expense $ 38,807 $ 32,220 $ 111,069 $ 95,507 Capitalized interest and deferred financing costs (19,339 ) (20,585 ) (61,273 ) (60,902 ) Interest expense $ 19,468 $ 11,635 $ 49,796 $ 34,605 |
Stockholders' Equity of the Com
Stockholders' Equity of the Company | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Stockholders' Equity of the Company | Stockholders’ Equity of the Company Increase in Authorized Shares On May 19, 2020, the Company’s stockholders approved a proposal to amend and restate the Company’s charter to increase the number of authorized shares of common stock that the Company has the authority to issue from 150,000,000 shares to 280,000,000 shares. Forward Equity Offering and Settlement On February 18, 2020, the Company entered into forward equity sale agreements with certain financial institutions acting as forward purchasers in connection with an offering of 5,750,000 shares of common stock at an initial gross offering price of $494.5 million , or $86.00 per share, before underwriting discounts, commissions and offering expenses. The forward purchasers borrowed and sold an aggregate of 5,750,000 shares of common stock in the offering. The Company did not receive any proceeds from the sale of its shares of common stock by the forward purchasers at the time of the offering. On March 25, 2020, the Company physically settled these forward equity sale agreements. Upon settlement, the Company issued 5,750,000 shares of common stock for net proceeds of $474.9 million and contributed the net proceeds to the Operating Partnership in exchange for an equal number of units in the Operating Partnership. At-The-Market Stock Offering Program Under our at-the-market stock offering program, which commenced in June 2018, we may offer and sell shares of our common stock having an aggregate gross sales price up to $500.0 million from time to time in “at-the-market” offerings. In connection with our at-the-market program, the Company may enter into forward equity sale agreements with certain financial institutions acting as forward purchasers whereby, at our discretion, the forward purchasers may borrow and sell shares of our common stock under our at-the-market program. The use of a forward equity sale agreement allows the Company to lock in a share price on the sale of shares of our common stock at the time the agreement is executed but defer settling the forward equity sale agreements and receiving the proceeds from the sale of shares until a later date. During the year ended December 31, 2019 , the Company executed various 12-month forward equity sale agreements under our at-the-market program with financial institutions acting as forward purchasers to sell an aggregate of 3,147,110 shares of common stock at a weighted average sales price of $80.08 per share before commissions and offering expenses. The Company did not receive any proceeds from the sale of its shares of common stock by the forward purchasers at the time of sale. In March 2020, the Company physically settled all forward equity sale agreements entered into in 2019. Upon settlement, the Company issued 3,147,110 shares of common stock for net proceeds of $247.3 million and contributed the net proceeds to the Operating Partnership in exchange for an equal number of units in the Operating Partnership. We did not enter into any forward equity sale agreements under our at-the-market program during the nine months ended September 30, 2020 . Since commencement of our current at-the-market program, we have completed sales of 3,594,576 shares of common stock through September 30, 2020 . As of September 30, 2020 , we may offer and sell shares of our common stock having an aggregate gross sales price up to approximately $214.2 million under our current at-the-market program. The Company did not complete any direct sales of common stock under the program during the three or nine months ended September 30, 2020 . The following table sets forth information regarding settlements of forward equity sale agreements under our at-the-market offering program for the nine months ended September 30, 2020 : Nine Months Ended September 30, 2020 (in millions, except share and per share data) Shares of common stock settled during the period 3,147,110 Weighted average price per share of common stock $ 80.08 Aggregate gross proceeds $ 252.0 Aggregate net proceeds after selling commissions $ 247.3 The proceeds from sales will be used to fund development expenditures and general corporate purposes. 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. |
Noncontrolling Interests on the
Noncontrolling Interests on the Company's Consolidated Financial Statements | 9 Months Ended |
Sep. 30, 2020 | |
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 98.4% , 98.1% , and 98.1% common general partnership interest in the Operating Partnership as of September 30, 2020 , December 31, 2019 and September 30, 2019 , respectively. The remaining approximate 1.6% , 1.9% , and 1.9% common limited partnership interest as of September 30, 2020 , December 31, 2019 and September 30, 2019 , respectively, was owned by non-affiliated investors and certain of our executive officers and directors in the form of noncontrolling common units. There were 1,931,574 , 2,023,287 and 2,023,287 common units outstanding held by these investors, executive officers and directors as of September 30, 2020 , December 31, 2019 and September 30, 2019 , respectively. 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 $102.2 million and $167.7 million as of September 30, 2020 and December 31, 2019 |
Partners' Capital of the Operat
Partners' Capital of the Operating Partnership | 9 Months Ended |
Sep. 30, 2020 | |
Partners' Capital Notes [Abstract] | |
Partners’ Capital of the Operating Partnership | Partners’ Capital of the Operating Partnership 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, 2020 December 31, 2019 September 30, 2019 Company owned common units in the Operating Partnership 115,247,221 106,016,287 106,011,916 Company owned general partnership interest 98.4 % 98.1 % 98.1 % Noncontrolling common units of the Operating Partnership 1,931,574 2,023,287 2,023,287 Ownership interest of noncontrolling interest 1.6 % 1.9 % 1.9 % For further discussion of the noncontrolling common units as of September 30, 2020 and December 31, 2019 , refer to Note 5. |
Share-Based Compensation
Share-Based Compensation | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Share-Based Compensation | Share-Based Compensation Stockholder Approved Share-Based Incentive Compensation Plan As of September 30, 2020 , we maintained one share-based incentive compensation plan, the Kilroy Realty 2006 Incentive Award Plan, as amended (the “2006 Plan”). The Company has a currently effective registration statement registering 10.7 million shares of our common stock for possible issuance under our 2006 Plan. As of September 30, 2020 , approximately 1.6 million 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) for which the performance period has been completed and (ii) at maximum levels for the other performance and market conditions (as defined below) for awards still in a performance period. 2020 Share-Based Compensation Grants In January 2020 , the Executive Compensation Committee of the Company’s Board of Directors awarded 263,626 restricted stock units (“RSUs”) to certain officers of the Company under the 2006 Plan, which included 154,267 RSUs (at the target level of performance) that are subject to market and/or performance-based vesting requirements (the “2020 Performance-Based RSUs”) and 109,359 RSUs that are subject to time-based vesting requirements (the “2020 Time-Based RSUs”). During the nine months ended September 30, 2020 , 5,148 of the 2020 Time-Based RSUs were forfeited and 12,263 of the 2020 Performance-Based RSUs were forfeited. 2020 Performance-Based RSU Grant The 2020 Performance-Based RSUs are scheduled to vest at the end of a three year period (consisting of calendar years 2020-2022). A target number of 2020 Performance-Based RSUs were awarded, and the final number of 2020 Performance-Based RSUs that vest (which may be more or less than the target number) will be based upon (1) the achievement of pre-set FFO per share goals for the year ending December 31, 2020 that applies to 100% of the Performance-Based RSUs awarded (the “FFO performance condition”) and (2) a performance measure that applies to 50% of the award based upon a measure of the Company’s average debt to EBITDA ratio for the three year performance period (the “debt to EBITDA ratio performance condition”) and a market measure that applies to the other 50% of the award based upon the relative ranking of the Company’s total stockholder return for the three year performance period compared to the total stockholder returns of an established comparison group of companies over the same period (the “market condition”). The 2020 Performance-Based RSUs are also subject to a three year service vesting provision (the “service vesting condition”) and are scheduled to cliff vest on the date the final vesting percentage is determined following the end of the three year performance period under the awards. The number of 2020 Performance-Based RSUs ultimately earned could fluctuate from the target number of 2020 Performance-Based RSUs granted based upon the levels of achievement for the FFO performance condition, the debt to EBITDA ratio performance condition, the market condition, and the extent to which the service vesting condition is satisfied. The estimate of the number of 2020 Performance-Based RSUs earned is evaluated quarterly during the performance period based on our estimate for each of the performance conditions measured against the applicable goals. During the nine months ended September 30, 2020 , we recognized $3.2 million of compensation expense for the 2020 Performance-Based RSU grant. In the event we achieve a lower level of performance or fail to meet the FFO performance condition, we would reverse a portion or all of the $3.2 million of compensation expense in the fourth quarter of 2020. Compensation expense for the 2020 Performance-Based RSU grant is recognized on a straight-line basis over the requisite service period for each participant, which is generally the three year service vesting period. Each 2020 Performance-Based RSU represents the right, subject to the applicable vesting conditions, to receive one share of our common stock in the future. The determination of the grant date fair value of the portion of the 2020 Performance-Based RSU grants covered by the debt to EBITDA ratio performance condition was based on the $82.57 share price on the January 31, 2020 grant date. The determination of the grant date fair value of the portion of the 2020 Performance-Based RSU grants covered by the market condition was calculated using a Monte Carlo simulation pricing model based on the assumptions in the table below, which resulted in a $84.54 grant date fair value per share. Fair Value Assumptions Valuation date January 31, 2020 Expected share price volatility 17.0% Risk-free interest rate 1.35% Fair value per share on valuation date (1) $84.54 ________________________ (1) Using the same Monte Carlo methodology and assumptions, the grant date fair value of one participant’s 2020 Performance-Based RSU grants was calculated as $85.52 per share. The computation of expected volatility is based on a blend of the historical volatility of our shares of common stock over approximately 5.8 years, as that is expected to be most consistent with future volatility and equates to a time period twice as long as the approximate 2.9 -year 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 31, 2020 . The total grant date fair value of the 2020 Performance-Based RSU awards was $12.9 million on the January 31, 2020 grant date of the awards. For the three and nine months ended September 30, 2020 , we recorded compensation expense based upon the grant date fair value per share for each component multiplied by the estimated number of RSUs to be earned. 2020 Time-Based RSU Grant The 2020 Time-Based RSUs are scheduled to vest in three equal annual installments beginning on January 5, 2021 through January 5, 2023. Compensation expense for the 2020 Time-Based RSUs is recognized on a straight-line basis over the requisite service period for each participant, which is generally the three year service vesting period. Each 2020 Time-Based RSU represents the right to receive one share of our common stock in the future. The total grant date fair value of the 2020 Time-Based RSU awards was $9.0 million , which was based on the $82.57 closing share price of the Company’s common stock on the NYSE on the January 31, 2020 grant date of the awards. 2019 and 2018 Performance-Based RSUs Total compensation cost for 2019 and 2018 performance-based RSUs for the three and nine months ended September 30, 2020 assumes the 2019 and 2018 debt to EBITDA ratio performance conditions are met at the maximum level of achievement. Share-Based Compensation Cost Recorded During the Period Share-based compensation costs for the three and nine months ended September 30, 2020 include $0.2 million and $4.5 million , respectively, of accelerated share-based compensation costs related to severance packages, including for the departure of an executive officer. The total compensation cost for all share-based compensation programs was $7.8 million and $6.8 million for the three months ended September 30, 2020 and 2019 , respectively, and $30.0 million and $24.4 million for the nine months ended September 30, 2020 and 2019 , respectively. Of the total share-based compensation costs, $1.8 million and $5.7 million was capitalized as part of real estate assets for the three and nine months ended September 30, 2020 and $0.7 million and $4.2 million was capitalized as part of real estate assets for the three and nine months ended September 30, 2019 , respectively. As of September 30, 2020 , there was approximately $42.6 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 1.6 years. The remaining compensation cost related to these nonvested incentive awards had been recognized in periods prior to September 30, 2020 . Severance Compensation For the nine months ended September 30, 2020 , compensation costs included in general and administrative expenses on our consolidated statements of operations include $14.1 million |
Rental Income and Future Minimu
Rental Income and Future Minimum Rent | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Rental Income and Future Minimum Rent | Rental Income and Future Minimum Rent Our rental income is primarily comprised of payments defined under leases and are either subject to scheduled fixed increases or adjustments in rent based on the Consumer Price Index. Additionally, rental income includes variable payments for tenant reimbursements of property-related expenses and payments based on a percentage of tenant’s sales. Under ASC Topic 842, we must perform a binary assessment of whether or not substantially all of the amounts due under a tenant’s lease agreement are probable of collection. Such assessment involves using a methodology that incorporates a specific identification analysis and an aging analysis and considers the current economic and business environment. This determination requires significant judgment and estimates about matters that are uncertain at the time the estimates are made, including the creditworthiness of specific tenants, specific industry trends and conditions, and general economic trends and conditions. For leases that are deemed probable of collection, revenue continues to be recorded on a straight-line basis over the lease term. For leases that are deemed not probable of collection, revenue is recorded as the lesser of (i) the amount which would be recognized on a straight-line basis or (ii) cash that has been received from the tenant, with any tenant and deferred rent receivable balances charged as a direct write-off against rental income in the period of the change in the collectability determination. For tenant and deferred rent receivables associated with leases whose rents are deemed probable of collection under Topic 842, we may record an allowance under other authoritative GAAP using a methodology that incorporates a specific identification analysis and an aging analysis and considers the current economic and business environment. This determination requires significant judgment and estimates about matters that are uncertain at the time the estimates are made, including the creditworthiness of specific tenants, specific industry trends and conditions, and general economic trends and conditions. Tenant and deferred rent receivables deemed probable of collection are carried net of allowances for uncollectible accounts, with increases or decreases in the allowances recorded through rental income on our consolidated statements of operations. The table below sets forth the allocation of rental income between fixed and variable payments and collectability reversals or recoveries for the three and nine months ended September 30, 2020 and 2019 : Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 (in thousands) Fixed lease payments $ 197,295 $ 181,994 $ 585,257 $ 524,174 Variable lease payments 31,650 30,470 93,059 82,654 Collectability (reversals) recoveries (1) (1,823 ) (143 ) (14,205 ) 2,504 Total rental income $ 227,122 $ 212,321 $ 664,111 $ 609,332 ______________ (1) Represents adjustments to rental income related to our assessment of the collectability of amounts due under leases with our tenants. For the three and nine months ended September 30, 2020 , includes a reduction in revenue of $1.8 million and $14.2 million , respectively, primarily as a result of the COVID-19 pandemic. We have operating leases with tenants that expire at various dates through 2044 . Generally, the leases grant tenants renewal options. Future contractual minimum rent under operating leases as of September 30, 2020 for future periods is summarized as follows: Year Ending (in thousands) Remaining 2020 $ 174,957 2021 729,823 2022 804,938 2023 790,212 2024 748,183 2025 716,941 Thereafter 3,453,142 Total (1) $ 7,418,196 ______________ (1) Excludes residential leases and leases with a term of one year or less. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies General As of September 30, 2020 , we had commitments of approximately $737.4 million , excluding our ground lease commitments, for contracts and executed leases directly related to our operating and development properties. Ground Leases The following table summarizes our properties that are held subject to long-term noncancellable ground lease obligations and the respective contractual expiration dates: Property Contractual Expiration Date (1) 601 108th Ave NE, Bellevue, WA November 2093 701, 801 and 837 N. 34th Street, Seattle, WA (2) December 2041 1701 Page Mill Road and 3150 Porter Drive, Palo Alto, CA December 2067 Kilroy Airport Center Phases I, II, and III, Long Beach, CA July 2084 3243 S. La Cienega Boulevard, Los Angeles, CA October 2106 ____________________ (1) Reflects the contractual expiration date prior to the impact of any extension or purchase options held by the Company. (2) The Company has three 10 -year and one 45 -year extension options for this ground lease, which if exercised would extend the expiration date to December 2116. These extension options are not assumed to be exercised in our calculation of the present value of the future minimum lease payments for this lease. To determine the discount rates used to calculate the present value of the minimum future lease payments for our ground leases, we used a hypothetical curve derived from unsecured corporate borrowing rates over the lease term. The weighted average discount rate used to determine the present value of our minimum lease payments was 5.11% . As of September 30, 2020 , the weighted average remaining lease term of our ground leases is 54 years. For the three months ended September 30, 2020 and 2019 , variable lease costs totaling $0.7 million and $0.7 million , respectively, were recorded to ground lease expense on our consolidated statements of operations. For the nine months ended September 30, 2020 and 2019 , variable lease costs totaling $2.4 million and $2.3 million , respectively, were recorded to ground leases expense on our consolidated statements of operations. The minimum commitment under our ground leases as of September 30, 2020 for future periods is summarized as follows: Year Ending (in thousands) Remaining 2020 $ 1,411 2021 5,641 2022 5,642 2023 5,662 2024 5,662 2025 5,662 Thereafter 280,723 Total undiscounted cash flows (1)(2)(3)(4)(5)(6) 310,403 Present value discount (212,467 ) Ground lease liabilities $ 97,936 ________________________ (1) Excludes contingent future rent payments based on gross income or adjusted gross income and reflects the minimum ground lease obligations before the impact of ground lease extension options. (2) One of our ground lease obligations is subject to a fair market value adjustment every five years ; however, the lease includes ground rent subprotection and infrastructure rent credits which currently limit our annual rental obligations to $1.0 million . The contractual obligations for that ground lease included above assumes the lesser of $1.0 million or annual lease rental obligation in effect as of September 30, 2020 . (3) One of our ground lease obligations includes a component which is based on the percentage of gross income that exceeds the minimum ground rent. The minimum rent is subject to increases every five years based on 50% of the average annual percentage rent for the previous five years . The contractual obligations for that lease included above assume the current annual ground lease obligation in effect at September 30, 2020 for the remainder of the lease term since we cannot predict future adjustments. (4) One of our ground lease obligations is subject to a fair market value adjustment every five years based on a combination of CPI adjustments and third-party appraisals limited to maximum increases annually. The contractual obligations for that lease included above assume the current annual ground lease obligation in effect at September 30, 2020 for the remainder of the lease term since we cannot predict future adjustments. (5) One of our ground lease obligations includes a component which is based on the percentage of adjusted gross income that exceeds the minimum ground rent. The minimum rent is subject to increases every ten years by an amount equal to 60% of the average annual percentage rent for the previous three years . The contractual obligations for this lease included above assume the current annual ground lease obligation in effect at September 30, 2020 for the remainder of the lease term since we cannot predict future adjustments. (6) One of our ground lease obligations is subject to fixed 5% ground rent increases every five years, with the next increase occurring on December 1, 2022 . Environmental Matters We follow the policy of monitoring all of our properties, including acquisition, development 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, 2020 , we had accrued environmental remediation liabilities of approximately $72.0 million recorded on our consolidated balance sheets in connection with certain of our in-process and future development projects. The accrued environmental remediation liabilities represent the remaining costs we estimate we will incur prior to and during the development process at various development acquisition sites. These estimates, which we developed with the assistance of third party experts, consist primarily of the removal of contaminated soil, performing environmental closure activities, constructing remedial systems and other related costs since we are required to dispose of any existing contaminated soil and sometimes perform other environmental closure or remedial activities when we develop new buildings at these sites. We record estimated environmental remediation obligations for acquired properties at the acquisition date when we are aware of such costs and when such costs are probable of being incurred and can be reasonably estimated. Estimated costs related to development environmental remediation liabilities are recorded as an increase to the cost of the development project. Actual costs are recorded as a decrease to the liability when incurred. These accruals are adjusted as an increase or decrease to the development project costs and as an increase or decrease to the accrued environmental remediation liability if we obtain further information or circumstances change. The environmental remediation obligations recorded at September 30, 2020 were not discounted to their present values since the amount and timing of cash payments are not fixed. It is possible that we could incur additional environmental remediation costs in connection with these development projects. However, potential additional environmental costs for these development projects cannot be reasonably estimated at this time and certain changes in estimates could occur as the site conditions, final project timing, design elements, actual soil conditions and other aspects of the projects, which may depend upon municipal and other approvals beyond the control of the Company, are determined. |
Fair Value Measurements and Dis
Fair Value Measurements and Disclosures | 9 Months Ended |
Sep. 30, 2020 | |
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, 2020 and December 31, 2019 : Fair Value (Level 1) (1) September 30, 2020 December 31, 2019 Description (in thousands) Marketable securities (2) $ 25,073 $ 27,098 ________________________ (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 gain (loss) 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 included in general and administrative expenses on our consolidated statements of operations for the period. The following table sets forth the net gain on marketable securities recorded during the three and nine months ended September 30, 2020 and 2019 : Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Description (in thousands) (in thousands) Net gain on marketable securities $ 1,658 $ 673 $ 1,094 $ 2,898 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, 2020 and December 31, 2019 : September 30, 2020 December 31, 2019 Carrying Fair (1) Carrying Fair (1) (in thousands) Liabilities Secured debt, net $ 254,854 $ 268,518 $ 258,593 $ 272,997 Unsecured debt, net $ 3,668,976 $ 4,024,194 $ 3,049,185 $ 3,252,217 Unsecured line of credit $ — $ — $ 245,000 $ 245,195 ________________________ (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 Common
Net Income Available to Common Stockholders Per Share of the Company | 9 Months Ended |
Sep. 30, 2020 | |
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, 2020 and 2019 : Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 (in thousands, except share and per share amounts) Numerator: Net income available to common stockholders $ 49,028 $ 43,846 $ 108,463 $ 122,943 Allocation to participating securities (1) (572 ) (530 ) (1,657 ) (1,582 ) Numerator for basic and diluted net income available to common stockholders $ 48,456 $ 43,316 $ 106,806 $ 121,361 Denominator: Basic weighted average vested shares outstanding 115,226,324 104,841,176 112,405,817 102,252,739 Effect of dilutive securities 441,333 518,728 470,058 619,697 Diluted weighted average vested shares and common stock equivalents outstanding 115,667,657 105,359,904 112,875,875 102,872,436 Basic earnings per share: Net income available to common stockholders per share $ 0.42 $ 0.41 $ 0.95 $ 1.19 Diluted earnings per share: Net income available to common stockholders per share $ 0.42 $ 0.41 $ 0.95 $ 1.18 ________________________ (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, 2020 and 2019 . Certain market measure-based RSUs are not included in dilutive securities for the three and nine months ended September 30, 2020 and 2019 , as not all performance metrics had been met by the end of the applicable reporting periods. See Note 7 “Share-Based Compensation” for additional information regarding share-based compensation. |
Net Income Available to Commo_2
Net Income Available to Common Unitholders Per Unit of the Operating Partnership | 9 Months Ended |
Sep. 30, 2020 | |
Net Income Available To Common Unitholders [Line Items] | |
Net Income Available to Common Unitholders Per Unit of the Operating Partnership | 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, 2020 and 2019 : Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 (in thousands, except share and per share amounts) Numerator: Net income available to common stockholders $ 49,028 $ 43,846 $ 108,463 $ 122,943 Allocation to participating securities (1) (572 ) (530 ) (1,657 ) (1,582 ) Numerator for basic and diluted net income available to common stockholders $ 48,456 $ 43,316 $ 106,806 $ 121,361 Denominator: Basic weighted average vested shares outstanding 115,226,324 104,841,176 112,405,817 102,252,739 Effect of dilutive securities 441,333 518,728 470,058 619,697 Diluted weighted average vested shares and common stock equivalents outstanding 115,667,657 105,359,904 112,875,875 102,872,436 Basic earnings per share: Net income available to common stockholders per share $ 0.42 $ 0.41 $ 0.95 $ 1.19 Diluted earnings per share: Net income available to common stockholders per share $ 0.42 $ 0.41 $ 0.95 $ 1.18 ________________________ (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, 2020 and 2019 . Certain market measure-based RSUs are not included in dilutive securities for the three and nine months ended September 30, 2020 and 2019 , as not all performance metrics had been met by the end of the applicable reporting periods. See Note 7 “Share-Based Compensation” for additional information regarding share-based compensation. |
Kilroy Realty L.P. [Member] | |
Net Income Available To Common Unitholders [Line Items] | |
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, 2020 and 2019 : Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 (in thousands, except unit and per unit amounts) Numerator: Net income available to common unitholders $ 49,728 $ 44,589 $ 109,955 $ 124,998 Allocation to participating securities (1) (572 ) (530 ) (1,657 ) (1,582 ) Numerator for basic and diluted net income available to common unitholders $ 49,156 $ 44,059 $ 108,298 $ 123,416 Denominator: Basic weighted average vested units outstanding 117,158,160 106,864,463 114,394,706 104,276,187 Effect of dilutive securities 441,333 518,728 470,058 619,697 Diluted weighted average vested units and common unit equivalents outstanding 117,599,493 107,383,191 114,864,764 104,895,884 Basic earnings per unit: Net income available to common unitholders per unit $ 0.42 $ 0.41 $ 0.95 $ 1.18 Diluted earnings per unit: Net income available to common unitholders per unit $ 0.42 $ 0.41 $ 0.94 $ 1.18 ________________________ (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, 2020 and 2019 . Certain market measure-based RSUs are not included in dilutive securities for the three and nine months ended September 30, 2020 and 2019 , as not all performance metrics had been met by the end of the applicable reporting periods. See Note 7 “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, 2020 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Cash Flow Information of the Company | Supplemental Cash Flow Information of the Company Supplemental cash flow information follows (in thousands): Nine Months Ended September 30, 2020 2019 SUPPLEMENTAL CASH FLOWS INFORMATION: Cash paid for interest, net of capitalized interest of $58,405 and $58,337 as of September 30, 2020 and 2019, respectively $ 35,898 $ 28,139 Cash paid for amounts included in the measurement of ground lease liabilities $ 4,686 $ 3,917 NON-CASH INVESTING TRANSACTIONS: Accrual for expenditures for operating properties and development properties $ 154,253 $ 148,468 Tenant improvements funded directly by tenants $ 9,118 $ 10,254 Assumption of accrued liabilities in connection with acquisitions $ — $ 3,967 Initial measurement of operating right of use ground lease assets $ — $ 82,938 Initial measurement of operating ground lease liabilities $ — $ 87,409 NON-CASH FINANCING TRANSACTIONS: Accrual of dividends and distributions payable to common stockholders and common unitholders (Note 15) $ 59,416 $ 53,205 Exchange of common units of the Operating Partnership into shares of the Company’s common stock $ 3,972 $ 78 The following is a reconciliation of our cash and cash equivalents and restricted cash at the beginning and end of the nine months ended September 30, 2020 and 2019 . Nine Months Ended September 30, 2020 2019 (in thousands) RECONCILIATION OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH: Cash and cash equivalents at beginning of period $ 60,044 $ 51,604 Restricted cash at beginning of period 16,300 119,430 Cash and cash equivalents and restricted cash at beginning of period $ 76,344 $ 171,034 Cash and cash equivalents at end of period $ 849,009 $ 297,620 Restricted cash at end of period 16,300 6,300 Cash and cash equivalents and restricted cash at end of period $ 865,309 $ 303,920 |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information of the Operating Partnership | 9 Months Ended |
Sep. 30, 2020 | |
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 follows (in thousands): Nine Months Ended September 30, 2020 2019 SUPPLEMENTAL CASH FLOWS INFORMATION: Cash paid for interest, net of capitalized interest of $58,405 and $58,337 as of September 30, 2020 and 2019, respectively $ 35,898 $ 28,139 Cash paid for amounts included in the measurement of ground lease liabilities $ 4,686 $ 3,917 NON-CASH INVESTING TRANSACTIONS: Accrual for expenditures for operating properties and development properties $ 154,253 $ 148,468 Tenant improvements funded directly by tenants $ 9,118 $ 10,254 Assumption of accrued liabilities in connection with acquisitions $ — $ 3,967 Initial measurement of operating right of use ground lease assets $ — $ 82,938 Initial measurement of operating ground lease liabilities $ — $ 87,409 NON-CASH FINANCING TRANSACTIONS: Accrual of dividends and distributions payable to common stockholders and common unitholders (Note 15) $ 59,416 $ 53,205 Exchange of common units of the Operating Partnership into shares of the Company’s common stock $ 3,972 $ 78 The following is a reconciliation of our cash and cash equivalents and restricted cash at the beginning and end of the nine months ended September 30, 2020 and 2019 . Nine Months Ended September 30, 2020 2019 (in thousands) RECONCILIATION OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH: Cash and cash equivalents at beginning of period $ 60,044 $ 51,604 Restricted cash at beginning of period 16,300 119,430 Cash and cash equivalents and restricted cash at beginning of period $ 76,344 $ 171,034 Cash and cash equivalents at end of period $ 849,009 $ 297,620 Restricted cash at end of period 16,300 6,300 Cash and cash equivalents and restricted cash at end of period $ 865,309 $ 303,920 |
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 follows (in thousands): Nine Months Ended September 30, 2020 2019 SUPPLEMENTAL CASH FLOWS INFORMATION: Cash paid for interest, net of capitalized interest of $58,405 and $58,337 as of September 30, 2020 and 2019, respectively $ 35,898 $ 28,139 Cash paid for amounts included in the measurement of ground lease liabilities $ 4,686 $ 3,917 NON-CASH INVESTING TRANSACTIONS: Accrual for expenditures for operating properties and development properties $ 154,253 $ 148,468 Tenant improvements funded directly by tenants $ 9,118 $ 10,254 Assumption of accrued liabilities in connection with acquisitions $ — $ 3,967 Initial measurement of operating right of use ground lease assets $ — $ 82,938 Initial measurement of operating ground lease liabilities $ — $ 87,409 NON-CASH FINANCING TRANSACTIONS: Accrual of distributions payable to common unitholders (Note 15) $ 59,416 $ 53,205 The following is a reconciliation of our cash and cash equivalents and restricted cash at the beginning and end of the nine months ended September 30, 2020 and 2019 . Nine Months Ended September 30, 2020 2019 (in thousands) RECONCILIATION OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH: Cash and cash equivalents at beginning of period $ 60,044 $ 51,604 Restricted cash at beginning of period 16,300 119,430 Cash and cash equivalents and restricted cash at beginning of period $ 76,344 $ 171,034 Cash and cash equivalents at end of period $ 849,009 $ 297,620 Restricted cash at end of period 16,300 6,300 Cash and cash equivalents and restricted cash at end of period $ 865,309 $ 303,920 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On October 14, 2020 , aggregate dividends, distributions and dividend equivalents of $59.4 million were paid to common stockholders, common unitholders and RSU holders of record on September 30, 2020 . |
Organization, Ownership and B_2
Organization, Ownership and Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
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, 303 Second LLC, 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, 303 Second LLC, 100 First LLC, Redwood LLC and all of our wholly-owned and controlled subsidiaries. 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, 2020 . 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, 2019 . |
New accounting pronouncements | Accounting Pronouncements Adopted January 1, 2020 ASU No. 2016-13 “Financial Instruments - Credit Losses (Topic 326)” Effective January 1, 2020, we adopted Financial Accounting Standards Board (“FASB”) FASB Accounting Standards Update (“ASU”) No. 2016-13 (“ASU 2016-13”), which amends 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. In November 2018, the FASB released ASU No. 2018-19 “Codification Improvements to Topic 326, Financial Instruments - Credit Losses.” This ASU clarifies that receivables arising from operating leases are not within the scope of Subtopic 326-20 “Financial Instruments – Credit Losses.” Instead, impairment of receivables arising from operating leases should be accounted for under Subtopic 842-30 “Leases – Lessor.” The adoption did not have a material impact on our consolidated financial statements or notes to our consolidated financial statements. ASU No. 2018-13 “Fair Value Measurement (Topic 820)” Effective January 1, 2020, we adopted FASB ASU No. 2018-13 (“ASU 2018-13”), which amends the disclosure requirements for fair value measurements. The amendments in ASU 2018-13 include new, modified and eliminated disclosure requirements and are the result of a broader disclosure project called FASB Concepts Statement, Conceptual Framework for Financial Reporting - Chapter 8: Notes to Financial Statements (the “Concepts Statement”), which the FASB finalized on August 28, 2018. The FASB used the guidance in the Concepts Statement to improve the effectiveness of Topic 820’s disclosure requirements. The adoption did not have a material impact on our consolidated financial statements or notes to our consolidated financial statements. ASU No. 2018-15 “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40)” Effective January 1, 2020, we adopted FASB ASU No. 2018-15 (“ASU 2018-15”), which amends a customer’s accounting for implementation costs incurred in a cloud computing arrangement that is a service contract. ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The adoption did not have a material impact on our consolidated financial statements or notes to our consolidated financial statements. COVID-19 Pandemic The global impact of the COVID-19 pandemic continues to evolve rapidly and, as cases of the illness caused by the virus have continued to be identified in additional countries, many countries, including the United States, have reacted by instituting or re-instituting quarantines and restrictions on travel. In addition, all the states where we own properties and/or have development projects (i.e., California and Washington), have reacted to the COVID-19 pandemic by instituting quarantines, restrictions on travel, “shelter in place” rules, restrictions on types of business that may continue to operate and/or restrictions on types of construction projects that may continue. COVID-19 Lease Modification Accounting Relief Due to the business disruptions and challenges severely affecting the global economy caused by the COVID-19 pandemic, many lessors may be required to provide rent deferrals and other lease concessions to lessees. While the lease modification guidance in Accounting Standards Codification (“ASC”) Topic 842 (“Topic 842”) addresses routine changes to lease terms resulting from negotiations between the lessee and the lessor, this guidance did not contemplate concessions being so rapidly executed to address the sudden liquidity constraints of some lessees arising from the COVID-19 pandemic and restrictions intended to prevent its spread. |
Organization, Ownership and B_3
Organization, Ownership and Basis of Presentation (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of real estate properties | As of September 30, 2020 , the following properties were excluded from our stabilized portfolio. We did not have any redevelopment properties or properties held for sale at September 30, 2020 . Number of Properties/Projects Estimated Rentable Square Feet (1) / Units In-process development projects - tenant improvement 4 1,435,000 In-process development projects - under construction (2) 3 856,000 Completed residential development project (3) 1 608 units ________________________ (1) Estimated rentable square feet upon completion. (2) In addition to the estimated office and life science rentable square feet noted above, development projects under construction also include 193 residential units. (3) Represents all three recently completed residential phases of our mixed-use development in San Diego, California that are not yet stabilized. Our stabilized portfolio of operating properties was comprised of the following properties at September 30, 2020 : Number of Buildings Rentable Square Feet Number of Tenants Percentage Occupied Percentage Leased Stabilized Office Properties (1) 114 14,329,607 461 92.2 % 95.5 % ________________________ (1) Includes stabilized retail space. Number of Number of Units 2020 Average Occupancy Stabilized Residential Property 1 200 87.8 % |
Prepaid Expenses and Other As_2
Prepaid Expenses and Other Assets, Net (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Prepaid expenses and other assets, net | Prepaid expenses and other assets, net consisted of the following at September 30, 2020 and December 31, 2019 : September 30, 2020 December 31, 2019 (in thousands) Furniture, fixtures and other long-lived assets, net $ 42,899 $ 35,286 Prepaid expenses 12,807 18,724 Note receivable (1) — 1,651 Total prepaid expenses and other assets, net $ 55,706 $ 55,661 ________________________ (1) During the nine months ended September 30, 2020 , the balance of the note receivable was written-off and the note receivable was placed on non-accrual status. We do not recognize interest income on non-accrual financing receivables. As of December 31, 2019 the note receivable was shown net of a valuation allowance of approximately $3.6 million . |
Secured and Unsecured Debt of_2
Secured and Unsecured Debt of the Operating Partnership (Tables) - Kilroy Realty L.P. [Member] | 9 Months Ended |
Sep. 30, 2020 | |
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, 2020 and December 31, 2019 : September 30, 2020 December 31, 2019 (in thousands) Outstanding borrowings $ — $ 245,000 Remaining borrowing capacity 750,000 505,000 Total borrowing capacity (1) $ 750,000 $ 750,000 Interest rate (2) 1.15 % 2.76 % Facility fee-annual rate (3) 0.200% Maturity date July 2022 ________________________ (1) We may elect to borrow, subject to bank approval and obtaining commitments for any additional borrowing capacity, up to an additional $600.0 million under an accordion feature under the terms of the unsecured revolving credit facility and unsecured term loan facility. (2) Our unsecured revolving credit facility interest rate was calculated based on the contractual rate of LIBOR plus 1.000% as of September 30, 2020 and December 31, 2019 . (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, 2020 and December 31, 2019 , $2.4 million and $3.4 million of unamortized deferred financing costs, respectively, which are included in prepaid expenses and other assets, net on our consolidated balance sheets, remained to be amortized through the maturity date of our unsecured revolving credit facility. December 31, 2019 : December 31, 2019 (in thousands) Outstanding borrowings $ 150,000 Remaining borrowing capacity — Total borrowing capacity (1) $ 150,000 Interest rate (2) 2.85 % Undrawn facility fee-annual rate 0.200 % Maturity date July 2022 ________________________ (1) As of December 31, 2019 , $0.7 million of unamortized deferred financing costs 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 the contractual rate of LIBOR plus 1.100% as of December 31, 2019 . |
Schedule of debt maturities | The following table summarizes the stated debt maturities and scheduled amortization payments as of September 30, 2020 : Year (in thousands) Remaining 2020 $ 1,304 2021 5,342 2022 5,554 2023 305,775 2024 431,006 2025 406,245 Thereafter 2,800,442 Total aggregate principal value (1) $ 3,955,668 ________________________ (1) Includes gross principal balance of outstanding debt before the effect of the following at September 30, 2020 : $23.3 million of unamortized deferred financing costs for the unsecured senior notes and secured debt and $8.5 million of unamortized discounts for the unsecured senior notes. |
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, 2020 and 2019 . 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, 2020 2019 2020 2019 (in thousands) Gross interest expense $ 38,807 $ 32,220 $ 111,069 $ 95,507 Capitalized interest and deferred financing costs (19,339 ) (20,585 ) (61,273 ) (60,902 ) Interest expense $ 19,468 $ 11,635 $ 49,796 $ 34,605 |
Stockholders' Equity of the C_2
Stockholders' Equity of the Company (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Schedule of Sale of Stock | The following table sets forth information regarding settlements of forward equity sale agreements under our at-the-market offering program for the nine months ended September 30, 2020 : Nine Months Ended September 30, 2020 (in millions, except share and per share data) Shares of common stock settled during the period 3,147,110 Weighted average price per share of common stock $ 80.08 Aggregate gross proceeds $ 252.0 Aggregate net proceeds after selling commissions $ 247.3 |
Partners' Capital of the Oper_2
Partners' Capital of the Operating Partnership (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
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, 2020 December 31, 2019 September 30, 2019 Company owned common units in the Operating Partnership 115,247,221 106,016,287 106,011,916 Company owned general partnership interest 98.4 % 98.1 % 98.1 % Noncontrolling common units of the Operating Partnership 1,931,574 2,023,287 2,023,287 Ownership interest of noncontrolling interest 1.6 % 1.9 % 1.9 % |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of share-based payment award, restricted stock units, valuation assumptions | The determination of the grant date fair value of the portion of the 2020 Performance-Based RSU grants covered by the market condition was calculated using a Monte Carlo simulation pricing model based on the assumptions in the table below, which resulted in a $84.54 grant date fair value per share. Fair Value Assumptions Valuation date January 31, 2020 Expected share price volatility 17.0% Risk-free interest rate 1.35% Fair value per share on valuation date (1) $84.54 ________________________ (1) Using the same Monte Carlo methodology and assumptions, the grant date fair value of one participant’s 2020 Performance-Based RSU grants was calculated as $85.52 per share. |
Rental Income and Future Mini_2
Rental Income and Future Minimum Rent (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Rental income | The table below sets forth the allocation of rental income between fixed and variable payments and collectability reversals or recoveries for the three and nine months ended September 30, 2020 and 2019 : Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 (in thousands) Fixed lease payments $ 197,295 $ 181,994 $ 585,257 $ 524,174 Variable lease payments 31,650 30,470 93,059 82,654 Collectability (reversals) recoveries (1) (1,823 ) (143 ) (14,205 ) 2,504 Total rental income $ 227,122 $ 212,321 $ 664,111 $ 609,332 ______________ (1) Represents adjustments to rental income related to our assessment of the collectability of amounts due under leases with our tenants. For the three and nine months ended September 30, 2020 , includes a reduction in revenue of $1.8 million and $14.2 million |
Future contractual minimum rent under operating leases | Future contractual minimum rent under operating leases as of September 30, 2020 for future periods is summarized as follows: Year Ending (in thousands) Remaining 2020 $ 174,957 2021 729,823 2022 804,938 2023 790,212 2024 748,183 2025 716,941 Thereafter 3,453,142 Total (1) $ 7,418,196 ______________ (1) Excludes residential leases and leases with a term of one year or less. |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of contractual expiration dates for ground leases | The following table summarizes our properties that are held subject to long-term noncancellable ground lease obligations and the respective contractual expiration dates: Property Contractual Expiration Date (1) 601 108th Ave NE, Bellevue, WA November 2093 701, 801 and 837 N. 34th Street, Seattle, WA (2) December 2041 1701 Page Mill Road and 3150 Porter Drive, Palo Alto, CA December 2067 Kilroy Airport Center Phases I, II, and III, Long Beach, CA July 2084 3243 S. La Cienega Boulevard, Los Angeles, CA October 2106 ____________________ (1) Reflects the contractual expiration date prior to the impact of any extension or purchase options held by the Company. (2) The Company has three 10 -year and one 45 -year extension options for this ground lease, which if exercised would extend the expiration date to December 2116. These extension options are not assumed to be exercised in our calculation of the present value of the future minimum lease payments for this lease. |
Schedule of future minimum rental repayments for ground leases | The minimum commitment under our ground leases as of September 30, 2020 for future periods is summarized as follows: Year Ending (in thousands) Remaining 2020 $ 1,411 2021 5,641 2022 5,642 2023 5,662 2024 5,662 2025 5,662 Thereafter 280,723 Total undiscounted cash flows (1)(2)(3)(4)(5)(6) 310,403 Present value discount (212,467 ) Ground lease liabilities $ 97,936 ________________________ (1) Excludes contingent future rent payments based on gross income or adjusted gross income and reflects the minimum ground lease obligations before the impact of ground lease extension options. (2) One of our ground lease obligations is subject to a fair market value adjustment every five years ; however, the lease includes ground rent subprotection and infrastructure rent credits which currently limit our annual rental obligations to $1.0 million . The contractual obligations for that ground lease included above assumes the lesser of $1.0 million or annual lease rental obligation in effect as of September 30, 2020 . (3) One of our ground lease obligations includes a component which is based on the percentage of gross income that exceeds the minimum ground rent. The minimum rent is subject to increases every five years based on 50% of the average annual percentage rent for the previous five years . The contractual obligations for that lease included above assume the current annual ground lease obligation in effect at September 30, 2020 for the remainder of the lease term since we cannot predict future adjustments. (4) One of our ground lease obligations is subject to a fair market value adjustment every five years based on a combination of CPI adjustments and third-party appraisals limited to maximum increases annually. The contractual obligations for that lease included above assume the current annual ground lease obligation in effect at September 30, 2020 for the remainder of the lease term since we cannot predict future adjustments. (5) One of our ground lease obligations includes a component which is based on the percentage of adjusted gross income that exceeds the minimum ground rent. The minimum rent is subject to increases every ten years by an amount equal to 60% of the average annual percentage rent for the previous three years . The contractual obligations for this lease included above assume the current annual ground lease obligation in effect at September 30, 2020 for the remainder of the lease term since we cannot predict future adjustments. (6) One of our ground lease obligations is subject to fixed 5% ground rent increases every five years, with the next increase occurring on December 1, 2022 . |
Fair Value Measurements and D_2
Fair Value Measurements and Disclosures (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
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, 2020 and December 31, 2019 : Fair Value (Level 1) (1) September 30, 2020 December 31, 2019 Description (in thousands) Marketable securities (2) $ 25,073 $ 27,098 ________________________ (1) Based on quoted prices in active markets for identical securities. (2) The marketable securities are held in a limited rabbi trust. |
Net gain (loss) on marketable securities | The following table sets forth the net gain on marketable securities recorded during the three and nine months ended September 30, 2020 and 2019 : Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Description (in thousands) (in thousands) Net gain on marketable securities $ 1,658 $ 673 $ 1,094 $ 2,898 |
Carrying value and fair value of company's remaining financial instruments | The following table sets forth the carrying value and the fair value of our other financial instruments as of September 30, 2020 and December 31, 2019 : September 30, 2020 December 31, 2019 Carrying Fair (1) Carrying Fair (1) (in thousands) Liabilities Secured debt, net $ 254,854 $ 268,518 $ 258,593 $ 272,997 Unsecured debt, net $ 3,668,976 $ 4,024,194 $ 3,049,185 $ 3,252,217 Unsecured line of credit $ — $ — $ 245,000 $ 245,195 ________________________ (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 Commo_3
Net Income Available to Common Stockholders Per Share of the Company (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
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, 2020 and 2019 : Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 (in thousands, except share and per share amounts) Numerator: Net income available to common stockholders $ 49,028 $ 43,846 $ 108,463 $ 122,943 Allocation to participating securities (1) (572 ) (530 ) (1,657 ) (1,582 ) Numerator for basic and diluted net income available to common stockholders $ 48,456 $ 43,316 $ 106,806 $ 121,361 Denominator: Basic weighted average vested shares outstanding 115,226,324 104,841,176 112,405,817 102,252,739 Effect of dilutive securities 441,333 518,728 470,058 619,697 Diluted weighted average vested shares and common stock equivalents outstanding 115,667,657 105,359,904 112,875,875 102,872,436 Basic earnings per share: Net income available to common stockholders per share $ 0.42 $ 0.41 $ 0.95 $ 1.19 Diluted earnings per share: Net income available to common stockholders per share $ 0.42 $ 0.41 $ 0.95 $ 1.18 ________________________ (1) |
Net Income Available to Commo_4
Net Income Available to Common Unitholders Per Unit of the Operating Partnership (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Net Income Available To Common Unitholders [Line Items] | |
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, 2020 and 2019 : Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 (in thousands, except share and per share amounts) Numerator: Net income available to common stockholders $ 49,028 $ 43,846 $ 108,463 $ 122,943 Allocation to participating securities (1) (572 ) (530 ) (1,657 ) (1,582 ) Numerator for basic and diluted net income available to common stockholders $ 48,456 $ 43,316 $ 106,806 $ 121,361 Denominator: Basic weighted average vested shares outstanding 115,226,324 104,841,176 112,405,817 102,252,739 Effect of dilutive securities 441,333 518,728 470,058 619,697 Diluted weighted average vested shares and common stock equivalents outstanding 115,667,657 105,359,904 112,875,875 102,872,436 Basic earnings per share: Net income available to common stockholders per share $ 0.42 $ 0.41 $ 0.95 $ 1.19 Diluted earnings per share: Net income available to common stockholders per share $ 0.42 $ 0.41 $ 0.95 $ 1.18 ________________________ (1) |
Kilroy Realty L.P. [Member] | |
Net Income Available To Common Unitholders [Line Items] | |
Net income available to common stockholders | 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, 2020 and 2019 : Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 (in thousands, except unit and per unit amounts) Numerator: Net income available to common unitholders $ 49,728 $ 44,589 $ 109,955 $ 124,998 Allocation to participating securities (1) (572 ) (530 ) (1,657 ) (1,582 ) Numerator for basic and diluted net income available to common unitholders $ 49,156 $ 44,059 $ 108,298 $ 123,416 Denominator: Basic weighted average vested units outstanding 117,158,160 106,864,463 114,394,706 104,276,187 Effect of dilutive securities 441,333 518,728 470,058 619,697 Diluted weighted average vested units and common unit equivalents outstanding 117,599,493 107,383,191 114,864,764 104,895,884 Basic earnings per unit: Net income available to common unitholders per unit $ 0.42 $ 0.41 $ 0.95 $ 1.18 Diluted earnings per unit: Net income available to common unitholders per unit $ 0.42 $ 0.41 $ 0.94 $ 1.18 ________________________ (1) |
Supplemental Cash Flow Inform_3
Supplemental Cash Flow Information of the Company (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of supplemental cash flows | Supplemental cash flow information follows (in thousands): Nine Months Ended September 30, 2020 2019 SUPPLEMENTAL CASH FLOWS INFORMATION: Cash paid for interest, net of capitalized interest of $58,405 and $58,337 as of September 30, 2020 and 2019, respectively $ 35,898 $ 28,139 Cash paid for amounts included in the measurement of ground lease liabilities $ 4,686 $ 3,917 NON-CASH INVESTING TRANSACTIONS: Accrual for expenditures for operating properties and development properties $ 154,253 $ 148,468 Tenant improvements funded directly by tenants $ 9,118 $ 10,254 Assumption of accrued liabilities in connection with acquisitions $ — $ 3,967 Initial measurement of operating right of use ground lease assets $ — $ 82,938 Initial measurement of operating ground lease liabilities $ — $ 87,409 NON-CASH FINANCING TRANSACTIONS: Accrual of dividends and distributions payable to common stockholders and common unitholders (Note 15) $ 59,416 $ 53,205 Exchange of common units of the Operating Partnership into shares of the Company’s common stock $ 3,972 $ 78 |
Reconciliation of cash and cash equivalents and restricted cash | The following is a reconciliation of our cash and cash equivalents and restricted cash at the beginning and end of the nine months ended September 30, 2020 and 2019 . Nine Months Ended September 30, 2020 2019 (in thousands) RECONCILIATION OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH: Cash and cash equivalents at beginning of period $ 60,044 $ 51,604 Restricted cash at beginning of period 16,300 119,430 Cash and cash equivalents and restricted cash at beginning of period $ 76,344 $ 171,034 Cash and cash equivalents at end of period $ 849,009 $ 297,620 Restricted cash at end of period 16,300 6,300 Cash and cash equivalents and restricted cash at end of period $ 865,309 $ 303,920 |
Reconciliation of cash and cash equivalents and restricted cash | The following is a reconciliation of our cash and cash equivalents and restricted cash at the beginning and end of the nine months ended September 30, 2020 and 2019 . Nine Months Ended September 30, 2020 2019 (in thousands) RECONCILIATION OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH: Cash and cash equivalents at beginning of period $ 60,044 $ 51,604 Restricted cash at beginning of period 16,300 119,430 Cash and cash equivalents and restricted cash at beginning of period $ 76,344 $ 171,034 Cash and cash equivalents at end of period $ 849,009 $ 297,620 Restricted cash at end of period 16,300 6,300 Cash and cash equivalents and restricted cash at end of period $ 865,309 $ 303,920 |
Supplemental Cash Flow Inform_4
Supplemental Cash Flow Information of the Operating Partnership (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Other Significant Noncash Transactions [Line Items] | |
Schedule of supplemental cash flows | Supplemental cash flow information follows (in thousands): Nine Months Ended September 30, 2020 2019 SUPPLEMENTAL CASH FLOWS INFORMATION: Cash paid for interest, net of capitalized interest of $58,405 and $58,337 as of September 30, 2020 and 2019, respectively $ 35,898 $ 28,139 Cash paid for amounts included in the measurement of ground lease liabilities $ 4,686 $ 3,917 NON-CASH INVESTING TRANSACTIONS: Accrual for expenditures for operating properties and development properties $ 154,253 $ 148,468 Tenant improvements funded directly by tenants $ 9,118 $ 10,254 Assumption of accrued liabilities in connection with acquisitions $ — $ 3,967 Initial measurement of operating right of use ground lease assets $ — $ 82,938 Initial measurement of operating ground lease liabilities $ — $ 87,409 NON-CASH FINANCING TRANSACTIONS: Accrual of dividends and distributions payable to common stockholders and common unitholders (Note 15) $ 59,416 $ 53,205 Exchange of common units of the Operating Partnership into shares of the Company’s common stock $ 3,972 $ 78 |
Reconciliation of cash and cash equivalents and restricted cash | The following is a reconciliation of our cash and cash equivalents and restricted cash at the beginning and end of the nine months ended September 30, 2020 and 2019 . Nine Months Ended September 30, 2020 2019 (in thousands) RECONCILIATION OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH: Cash and cash equivalents at beginning of period $ 60,044 $ 51,604 Restricted cash at beginning of period 16,300 119,430 Cash and cash equivalents and restricted cash at beginning of period $ 76,344 $ 171,034 Cash and cash equivalents at end of period $ 849,009 $ 297,620 Restricted cash at end of period 16,300 6,300 Cash and cash equivalents and restricted cash at end of period $ 865,309 $ 303,920 |
Reconciliation of cash and cash equivalents and restricted cash | The following is a reconciliation of our cash and cash equivalents and restricted cash at the beginning and end of the nine months ended September 30, 2020 and 2019 . Nine Months Ended September 30, 2020 2019 (in thousands) RECONCILIATION OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH: Cash and cash equivalents at beginning of period $ 60,044 $ 51,604 Restricted cash at beginning of period 16,300 119,430 Cash and cash equivalents and restricted cash at beginning of period $ 76,344 $ 171,034 Cash and cash equivalents at end of period $ 849,009 $ 297,620 Restricted cash at end of period 16,300 6,300 Cash and cash equivalents and restricted cash at end of period $ 865,309 $ 303,920 |
Kilroy Realty L.P. [Member] | |
Other Significant Noncash Transactions [Line Items] | |
Schedule of supplemental cash flows | Supplemental cash flow information follows (in thousands): Nine Months Ended September 30, 2020 2019 SUPPLEMENTAL CASH FLOWS INFORMATION: Cash paid for interest, net of capitalized interest of $58,405 and $58,337 as of September 30, 2020 and 2019, respectively $ 35,898 $ 28,139 Cash paid for amounts included in the measurement of ground lease liabilities $ 4,686 $ 3,917 NON-CASH INVESTING TRANSACTIONS: Accrual for expenditures for operating properties and development properties $ 154,253 $ 148,468 Tenant improvements funded directly by tenants $ 9,118 $ 10,254 Assumption of accrued liabilities in connection with acquisitions $ — $ 3,967 Initial measurement of operating right of use ground lease assets $ — $ 82,938 Initial measurement of operating ground lease liabilities $ — $ 87,409 NON-CASH FINANCING TRANSACTIONS: Accrual of distributions payable to common unitholders (Note 15) $ 59,416 $ 53,205 |
Reconciliation of cash and cash equivalents and restricted cash | The following is a reconciliation of our cash and cash equivalents and restricted cash at the beginning and end of the nine months ended September 30, 2020 and 2019 . Nine Months Ended September 30, 2020 2019 (in thousands) RECONCILIATION OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH: Cash and cash equivalents at beginning of period $ 60,044 $ 51,604 Restricted cash at beginning of period 16,300 119,430 Cash and cash equivalents and restricted cash at beginning of period $ 76,344 $ 171,034 Cash and cash equivalents at end of period $ 849,009 $ 297,620 Restricted cash at end of period 16,300 6,300 Cash and cash equivalents and restricted cash at end of period $ 865,309 $ 303,920 |
Reconciliation of cash and cash equivalents and restricted cash | The following is a reconciliation of our cash and cash equivalents and restricted cash at the beginning and end of the nine months ended September 30, 2020 and 2019 . Nine Months Ended September 30, 2020 2019 (in thousands) RECONCILIATION OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH: Cash and cash equivalents at beginning of period $ 60,044 $ 51,604 Restricted cash at beginning of period 16,300 119,430 Cash and cash equivalents and restricted cash at beginning of period $ 76,344 $ 171,034 Cash and cash equivalents at end of period $ 849,009 $ 297,620 Restricted cash at end of period 16,300 6,300 Cash and cash equivalents and restricted cash at end of period $ 865,309 $ 303,920 |
Organization, Ownership and B_4
Organization, Ownership and Basis of Presentation - Operating Properties (Details) | Sep. 30, 2020ft²property_unitresidential_unitprojectbuildingtenant |
Stabilized office properties [Member] | |
Real Estate Properties [Line Items] | |
Number of Buildings | building | 114 |
Rentable Square Feet | ft² | 14,329,607 |
Number of Tenants | tenant | 461 |
Percentage Occupied | 92.20% |
Percentage Leased | 95.50% |
Stabilized residential properties [Member] | |
Real Estate Properties [Line Items] | |
Number of Buildings | building | 1 |
Percentage Occupied | 87.80% |
Number of Units | building | 200 |
In-process development projects - tenant improvement [Member] | |
Real Estate Properties [Line Items] | |
Number of Buildings | project | 4 |
Rentable Square Feet | ft² | 1,435,000 |
In-process development projects - under construction [Member] | |
Real Estate Properties [Line Items] | |
Number of Buildings | project | 3 |
Rentable Square Feet | ft² | 856,000 |
Number of residential units | residential_unit | 193 |
Completed residential development project [Member] | |
Real Estate Properties [Line Items] | |
Number of Buildings | project | 1 |
Number of Units | property_unit | 608 |
Organization, Ownership and B_5
Organization, Ownership and Basis of Presentation - Narrative (Details) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2020USD ($)ft²aVIEpropertyproperty_partnershipprojectbuilding | Sep. 30, 2019 | Dec. 31, 2019USD ($)VIEentityproperty_partnership | |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||
Lease-up properties occupancy percentage | 95.00% | ||
Lease-up properties occupancy duration | 1 year | ||
Assets | $ 9,984,608 | $ 8,900,094 | |
Liabilities | 4,732,644 | 4,329,236 | |
Noncontrolling interest in VIE | $ 200,596 | $ 195,431 | |
San Francisco, California [Member] | |||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||
Number of properties | building | 1 | ||
Washington [Member] | |||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||
Number of properties | property | 1 | ||
Stabilized office properties [Member] | |||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||
Number of properties | building | 114 | ||
Rentable square feet | ft² | 14,329,607 | ||
Stabilized office properties [Member] | Washington [Member] | |||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||
Number of properties | property | 8 | ||
Development properties [Member] | |||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||
Number of properties | property | 2 | ||
Number of property partnerships | property_partnership | 3 | ||
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 | 750,370 | ||
Development properties [Member] | San Diego, California [Member] | |||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||
Rentable square feet | ft² | 95,871 | ||
Development properties [Member] | Washington [Member] | |||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||
Number of properties | property | 1 | ||
Office properties owned by consolidated property partnerships [Member] | |||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||
Number of properties | property | 4 | ||
Development sites [Member] | |||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||
Number of properties | project | 5 | ||
Area of undeveloped land | a | 61 | ||
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% | ||
101 First LLC and 303 Second LLC [Member] | |||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||
Company owned general partnership interest | 56.00% | ||
101 First LLC and 303 Second LLC [Member] | Development properties [Member] | |||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||
Number of property partnerships | property_partnership | 2 | ||
Redwood LLC [Member] | |||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||
Number of properties | property | 2 | ||
Company owned general partnership interest | 93.00% | ||
Operating Partnership [Member] | |||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||
Ownership interest (percent) | 98.40% | 98.10% | 98.10% |
Non-affiliated investors and certain of our executive officers and directors [Member] | Operating Partnership [Member] | |||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||
Ownership interest (percent) | 1.60% | 1.90% | 1.90% |
Variable Interest Entity, Primary Beneficiary [Member] | |||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||
Number of property partnerships | property_partnership | 2 | ||
Number of VIEs | VIE | 2 | 4 | |
Number of entities established | entity | 2 | ||
Assets | $ 477,600 | $ 676,700 | |
Liabilities | 35,300 | 40,100 | |
Variable Interest Entity, Primary Beneficiary [Member] | Real estate investment [Member] | |||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||
Assets | 395,000 | 598,000 | |
Variable Interest Entity, Primary Beneficiary [Member] | 101 First LLC and 303 Second LLC [Member] | |||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | |||
Noncontrolling interest in VIE | $ 194,900 | $ 189,600 |
Prepaid Expenses and Other As_3
Prepaid Expenses and Other Assets, Net (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Prepaid Expense and Other Assets [Abstract] | ||
Furniture, fixtures and other long-lived assets, net | $ 42,899 | $ 35,286 |
Prepaid expenses | 12,807 | 18,724 |
Note receivable | 0 | 1,651 |
Total prepaid expenses and other assets, net | $ 55,706 | 55,661 |
Valuation allowance | $ 3,600 |
Secured and Unsecured Debt of_3
Secured and Unsecured Debt of the Operating Partnership - Unsecured Senior Notes, Unsecured Revolving Credit Facility and Term Loan Facility (Details) - USD ($) | 1 Months Ended | 9 Months Ended | 12 Months Ended | |
Aug. 31, 2020 | Apr. 30, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | |
Terms of the Credit Facility | ||||
Outstanding borrowings | $ 0 | $ 245,000,000 | ||
Senior Notes [Member] | 2.500% Unsecured Senior Notes [Member] | ||||
Debt Instrument [Line Items] | ||||
Principal amount of debt | $ 425,000,000 | |||
Unamortized discount | $ 2,700,000 | |||
Stated interest rate on debt (percent) | 2.50% | |||
Senior Notes [Member] | 4.27% Unsecured Senior Notes [Member] | ||||
Debt Instrument [Line Items] | ||||
Principal amount of debt | $ 350,000,000 | |||
Stated interest rate on debt (percent) | 4.27% | |||
Minimum principal amount outstanding that may be repurchased (percent) | 5.00% | |||
Redemption Price as percent of principal amount (percent) | 100.00% | |||
Kilroy Realty L.P. [Member] | ||||
Terms of the Credit Facility | ||||
Outstanding borrowings | 0 | 245,000,000 | ||
Kilroy Realty L.P. [Member] | Senior Notes [Member] | ||||
Debt Instrument [Line Items] | ||||
Unamortized discount | 8,500,000 | |||
Kilroy Realty L.P. [Member] | Revolving credit facility [Member] | ||||
Terms of the Credit Facility | ||||
Outstanding borrowings | 0 | 245,000,000 | ||
Remaining borrowing capacity | 750,000,000 | 505,000,000 | ||
Total borrowing capacity | $ 750,000,000 | $ 750,000,000 | ||
Interest rate (percent) | 1.15% | 2.76% | ||
Facility fee-annual rate (percent) | 0.20% | 0.20% | ||
Contingent additional borrowings | $ 600,000,000 | |||
Unamortized deferred financing costs | $ 2,400,000 | $ 3,400,000 | ||
Kilroy Realty L.P. [Member] | Revolving credit facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||||
Terms of the Credit Facility | ||||
Variable rate (percent) | 1.00% | 1.00% | ||
Kilroy Realty L.P. [Member] | Line of credit [Member] | $150 Million Term Loan Facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Repayment of debt | $ 150,000,000 | |||
Terms of the Credit Facility | ||||
Outstanding borrowings | $ 150,000,000 | |||
Remaining borrowing capacity | 0 | |||
Total borrowing capacity | $ 150,000,000 | |||
Interest rate (percent) | 2.85% | |||
Undrawn facility fee-annual rate (percent) | 0.20% | |||
Unamortized deferred financing costs | $ 700,000 | |||
Kilroy Realty L.P. [Member] | Line of credit [Member] | $150 Million Term Loan Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||||
Terms of the Credit Facility | ||||
Variable rate (percent) | 1.10% |
Secured and Unsecured Debt of_4
Secured and Unsecured Debt of the Operating Partnership - Debt Maturities (Details) - Kilroy Realty L.P. [Member] $ in Thousands | Sep. 30, 2020USD ($) |
Stated debt maturities and scheduled amortization payments | |
Remaining 2020 | $ 1,304 |
2021 | 5,342 |
2022 | 5,554 |
2023 | 305,775 |
2024 | 431,006 |
2025 | 406,245 |
Thereafter | 2,800,442 |
Total debt | 3,955,668 |
Unsecured term loan facility, unsecured senior notes and secured debt [Member] | |
Stated debt maturities and scheduled amortization payments | |
Unamortized deferred financing costs | 23,300 |
Unsecured senior notes [Member] | |
Stated debt maturities and scheduled amortization payments | |
Unamortized discount | $ 8,500 |
Secured and Unsecured Debt of_5
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, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Capitalized Interest and Loan Fees [Line Items] | ||||
Interest expense | $ 19,468 | $ 11,635 | $ 49,796 | $ 34,605 |
Kilroy Realty L.P. [Member] | ||||
Capitalized Interest and Loan Fees [Line Items] | ||||
Gross interest expense | 38,807 | 32,220 | 111,069 | 95,507 |
Capitalized interest and deferred financing costs | (19,339) | (20,585) | (61,273) | (60,902) |
Interest expense | $ 19,468 | $ 11,635 | $ 49,796 | $ 34,605 |
Stockholders' Equity of the C_3
Stockholders' Equity of the Company (Details) - USD ($) | Mar. 25, 2020 | Feb. 18, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | May 19, 2020 | May 18, 2020 | Dec. 31, 2019 | Jun. 30, 2018 |
Class of Stock [Line Items] | ||||||||||||
Common stock, shares authorized (in shares) | 280,000,000 | 280,000,000 | 280,000,000 | 150,000,000 | 150,000,000 | |||||||
Forward equity offering, numbers of shares authorized (in shares) | 5,750,000 | |||||||||||
Forward equity offering, value of shares offered | $ 494,500,000 | |||||||||||
Forward equity offering price per share (in dollars per share) | $ 86 | |||||||||||
At the market stock offering aggregate gross sales price of common stock | $ 500,000,000 | |||||||||||
Common stock, shares issued (in shares) | 115,247,221 | 115,247,221 | 106,016,287 | |||||||||
Proceeds from issuance of stock | $ 721,675,000 | $ 353,904,000 | ||||||||||
Forward equity sale [Member] | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Proceeds from issuance of stock | $ 474,900,000 | $ 247,300,000 | ||||||||||
Common Stock [Member] | Forward equity sale [Member] | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Common stock, shares issued (in shares) | 3,594,576 | 3,594,576 | ||||||||||
At the market stock offering remaining amount available for issuance | $ 214,200,000 | $ 214,200,000 | ||||||||||
2018 At-The-Market Program [Member] | Common Stock [Member] | Forward equity sale [Member] | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Sale of stock, shares available for sale (in shares) | 3,147,110 | |||||||||||
Price per share (in dollars per share) | $ 80.08 | |||||||||||
Common Stock [Member] | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Issuance of common stock (in shares) | 0 | 0 | 8,897,110 | 5,000,000 | ||||||||
Common Stock [Member] | Forward equity sale [Member] | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Issuance of common stock (in shares) | 3,147,110 | |||||||||||
Price per share (in dollars per share) | $ 80.08 | $ 80.08 | ||||||||||
Number of shares issued (in shares) | 5,750,000 | |||||||||||
Proceeds from issuance of stock | $ 252,000,000 | |||||||||||
Aggregate net proceeds after selling commissions | $ 247,300,000 |
Noncontrolling Interests on t_2
Noncontrolling Interests on the Company's Consolidated Financial Statements (Details) $ / shares in Units, $ in Millions | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2020USD ($)trading_day$ / sharesshares | Sep. 30, 2019shares | Dec. 31, 2019USD ($)$ / sharesshares | |
Noncontrolling Interest [Line Items] | |||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | |
Number of trading days | trading_day | 10 | ||
Aggregate value upon redemption of outstanding noncontrolling common units | $ | $ 102.2 | $ 167.7 | |
Non-affiliated investors and certain of our executive officers and directors [Member] | Common units [Member] | |||
Noncontrolling Interest [Line Items] | |||
Common units outstanding held by common limited partners (in units) | shares | 1,931,574 | 2,023,287 | 2,023,287 |
Operating Partnership [Member] | |||
Noncontrolling Interest [Line Items] | |||
Ownership interest (percent) | 98.40% | 98.10% | 98.10% |
Operating Partnership [Member] | Non-affiliated investors and certain of our executive officers and directors [Member] | |||
Noncontrolling Interest [Line Items] | |||
Ownership interest (percent) | 1.60% | 1.90% | 1.90% |
Partners' Capital of the Oper_3
Partners' Capital of the Operating Partnership (Details) - shares | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Operating Partnership [Member] | |||
General Partners' Capital Account [Abstract] | |||
Ownership interest (percent) | 98.40% | 98.10% | 98.10% |
Kilroy Realty L.P. [Member] | Common units [Member] | |||
General Partners' Capital Account [Abstract] | |||
Company owned common units in the Operating Partnership (in units) | 115,247,221 | 106,011,916 | 106,016,287 |
Noncontrolling common units of the Operating Partnership (in units) | 1,931,574 | 2,023,287 | |
Non-affiliated investors and certain of our executive officers and directors [Member] | Operating Partnership [Member] | |||
General Partners' Capital Account [Abstract] | |||
Ownership interest (percent) | 1.60% | 1.90% | 1.90% |
Non-affiliated investors and certain of our executive officers and directors [Member] | Common units [Member] | |||
General Partners' Capital Account [Abstract] | |||
Noncontrolling common units of the Operating Partnership (in units) | 1,931,574 | 2,023,287 | 2,023,287 |
Share-Based Compensation - Narr
Share-Based Compensation - Narrative (Details) $ / shares in Units, $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Jan. 31, 2020USD ($)installment$ / sharesshares | Sep. 30, 2020USD ($)compensation_planshares | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)compensation_planshares | Sep. 30, 2019USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of share-based incentive compensation plans | compensation_plan | 1 | 1 | |||
Effective registration shares (in shares) | shares | 10,700,000 | 10,700,000 | |||
Number of shares available for grant (in shares) | shares | 1,600,000 | 1,600,000 | |||
Share-based compensation expense | $ | $ 7.8 | $ 6.8 | $ 30 | $ 24.4 | |
Share-based compensation expense capitalized | $ | 1.8 | $ 0.7 | 5.7 | $ 4.2 | |
Share-based compensation not yet recognized | $ | $ 42.6 | $ 42.6 | |||
Share-based compensation not yet recognized period of recognition | 1 year 7 months 6 days | ||||
Restricted Stock Units (RSUs) [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares granted in period (in shares) | shares | 263,626 | ||||
Market Measure-Based Restricted Stock Units (RSUs) [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares granted in period (in shares) | shares | 154,267 | ||||
Time-Based Restricted Stock Units (RSUs) [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares granted in period (in shares) | shares | 109,359 | ||||
Number of RSUs forfeited (in shares) | shares | 5,148 | ||||
Time-Based RSUs [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 3 years | ||||
Number of installments | installment | 3 | ||||
Right to receive number of shares (in shares) | shares | 1 | ||||
Time-Based Restricted Stock Units (RSUs), Grant [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Fair value RSUs granted | $ | $ 9 | ||||
Performance-Based RSUs [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of RSUs forfeited (in shares) | shares | 12,263 | ||||
Vesting period | 3 years | ||||
Vesting, achievement of pre-set FFO per share goals, percentage of RSUs | 100.00% | 100.00% | |||
Vesting, Average debt to EBIDTA ratio, percentage of RSUs | 50.00% | 50.00% | |||
Vesting, Market measure, percentage of RSUs | 50.00% | 50.00% | |||
Number of shares issuable per RSU | 1 | ||||
Share price | $ / shares | $ 82.57 | ||||
Fair value per share on valuation date (in dollars per share) | $ / shares | $ 84.54 | ||||
Remaining expected life, including future volatility | 5 years 9 months 18 days | ||||
Performance period | 2 years 10 months 24 days | ||||
Fair value RSUs granted | $ | $ 12.9 | ||||
Share-based compensation expense | $ | $ 3.2 | ||||
Accelerated Compensation Related to Severance Packages [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation expense | $ | $ 0.2 | 4.5 | |||
General and Administrative Expense [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Cash severance costs for departure of an executive officer | $ | $ 14.1 |
Share-Based Compensation - Fair
Share-Based Compensation - Fair Value Assumptions (Details) - Performance-Based RSUs [Member] | 1 Months Ended |
Jan. 31, 2020$ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected share price volatility | 17.00% |
Risk-free interest rate | 1.35% |
Fair value per share on valuation date (in dollars per share) | $ 84.54 |
One Participant [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Fair value per share on valuation date (in dollars per share) | $ 85.52 |
Rental Income and Future Mini_3
Rental Income and Future Minimum Rent - Rental income (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Leases [Abstract] | ||||
Fixed lease payments | $ 197,295 | $ 181,994 | $ 585,257 | $ 524,174 |
Variable lease payments | 31,650 | 30,470 | 93,059 | 82,654 |
Collectability (reversals) recoveries (1) | (1,823) | (143) | (14,205) | 2,504 |
Total rental income | 227,122 | $ 212,321 | 664,111 | $ 609,332 |
Reveral of revenue related to the cumulative impact of transitioning to a cash basis of revenue recognition as a result of the COVID-19 pandemic. | $ (1,800) | $ (14,200) |
Rental Income and Future Mini_4
Rental Income and Future Minimum Rent - Future Contractual Minimum Rent (Details) $ in Thousands | Sep. 30, 2020USD ($) |
Future contractual minimum rent under operating lease | |
Remaining 2020 | $ 174,957 |
2021 | 729,823 |
2022 | 804,938 |
2023 | 790,212 |
2024 | 748,183 |
2025 | 716,941 |
Thereafter | 3,453,142 |
Total | $ 7,418,196 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)ground_lease | Sep. 30, 2019USD ($) | |
Long-term Purchase Commitment [Line Items] | ||||
Commitments for contracts and executed leases, operating and redevelopment and development properties | $ 737.4 | $ 737.4 | ||
Weighted average discount rate, ground leases | 5.11% | 5.11% | ||
Weighted average remaining lease term | 54 years | 54 years | ||
Variable lease, cost | $ 0.7 | $ 0.7 | $ 2.4 | $ 2.3 |
Environmental matters [Member] | ||||
Long-term Purchase Commitment [Line Items] | ||||
Accrued environmental remediation liabilities | $ 72 | $ 72 | ||
Ten year ground lease extension option [Member] | ||||
Long-term Purchase Commitment [Line Items] | ||||
Number of extension options | ground_lease | 3 | |||
Ground lease extension option term | 10 years | |||
Forty-five year ground lease extension option [Member] | ||||
Long-term Purchase Commitment [Line Items] | ||||
Number of extension options | ground_lease | 1 | |||
Ground lease extension option term | 45 years |
Commitments and Contingencies_2
Commitments and Contingencies - Minimum Commitment Under Ground Leases (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2020 | Dec. 31, 2019 | Jan. 01, 2019 | |
Minimum commitment under our ground leases | |||
Remaining 2020 | $ 1,411 | ||
2021 | 5,641 | ||
2022 | 5,642 | ||
2023 | 5,662 | ||
2024 | 5,662 | ||
2025 | 5,662 | ||
Thereafter | 280,723 | ||
Total undiscounted cash flows | 310,403 | ||
Present value discount | (212,467) | ||
Ground lease liabilities | $ 97,936 | $ 98,400 | $ 87,409 |
Period after which ground lease rentals are adjusted based on fair market value and the Consumer Price Index | 5 years | ||
Annual ground lease rental obligations limit | $ 1,000 | ||
Average annual percentage rent for previous five years (percent) | 50.00% | ||
Previous period included in average annual rent percentage for five-year increases | 5 years | ||
Duration of ground lease prior to increase ten years | 10 years | ||
Average annual percentage rent for previous ten years (percent) | 60.00% | ||
Previous period included in average annual rent percentage for ten-year increases | 3 years | ||
Percentage rent increase every five years | 5.00% |
Fair Value Measurements and D_3
Fair Value Measurements and Disclosures - Assets and Liabilities Reported at Fair Value (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Fair value adjustment of marketable securities and deferred compensation plan liability | |||||
Net gain on marketable securities | $ 1,658 | $ 673 | $ 1,094 | $ 2,898 | |
Fair value, measurements, recurring [Member] | Fair value (Level 1) [Member] | |||||
Assets and Liabilities Reported at Fair Value | |||||
Marketable securities | $ 25,073 | $ 25,073 | $ 27,098 |
Fair Value Measurements and D_4
Fair Value Measurements and Disclosures - Financial Instruments Disclosed at Fair Value (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Carrying value [Member] | Secured debt [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of debt, net | $ 254,854 | $ 258,593 |
Carrying value [Member] | Unsecured debt [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of debt, net | 3,668,976 | 3,049,185 |
Carrying value [Member] | Line of credit [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of debt, net | 0 | 245,000 |
Fair value [Member] | Secured debt [Member] | Fair value (level 2) [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of debt, net | 268,518 | 272,997 |
Fair value [Member] | Unsecured debt [Member] | Fair value (level 2) [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of debt, net | 4,024,194 | 3,252,217 |
Fair value [Member] | Line of credit [Member] | Fair value (level 2) [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair value of debt, net | $ 0 | $ 245,195 |
Net Income Available to Commo_5
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, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Numerator: | ||||
Net income available to common stockholders | $ 49,028 | $ 43,846 | $ 108,463 | $ 122,943 |
Allocation to participating securities | (572) | (530) | (1,657) | (1,582) |
Numerator for basic and diluted net income available to common stockholders | $ 48,456 | $ 43,316 | $ 106,806 | $ 121,361 |
Denominator: | ||||
Basic weighted average vested shares outstanding (in shares) | 115,226,324 | 104,841,176 | 112,405,817 | 102,252,739 |
Effect of dilutive securities (in shares) | 441,333 | 518,728 | 470,058 | 619,697 |
Diluted weighted average vested shares and common stock equivalents outstanding (in shares) | 115,667,657 | 105,359,904 | 112,875,875 | 102,872,436 |
Basic earnings per share: | ||||
Net income available to common stockholders per share (in dollars per share) | $ 0.42 | $ 0.41 | $ 0.95 | $ 1.19 |
Diluted earnings per share: | ||||
Net income available to common stockholders per share (in dollars per share) | $ 0.42 | $ 0.41 | $ 0.95 | $ 1.18 |
Net Income Available to Commo_6
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, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Numerator: | ||||
Net income available to common unitholders | $ 49,028 | $ 43,846 | $ 108,463 | $ 122,943 |
Allocation to participating securities | (572) | (530) | (1,657) | (1,582) |
Numerator for basic and diluted net income available to common stockholders | $ 48,456 | $ 43,316 | $ 106,806 | $ 121,361 |
Denominator: | ||||
Basic weighted average vested shares outstanding (in shares) | 115,226,324 | 104,841,176 | 112,405,817 | 102,252,739 |
Effect of dilutive securities (in shares) | 441,333 | 518,728 | 470,058 | 619,697 |
Diluted weighted average vested shares and common stock equivalents outstanding (in shares) | 115,667,657 | 105,359,904 | 112,875,875 | 102,872,436 |
Basic earnings per unit: | ||||
Net income available to common stockholders per share (in dollars per share) | $ 0.42 | $ 0.41 | $ 0.95 | $ 1.19 |
Diluted earnings per unit: | ||||
Net income available to common stockholders per share (in dollars per share) | $ 0.42 | $ 0.41 | $ 0.95 | $ 1.18 |
Kilroy Realty L.P. [Member] | ||||
Numerator: | ||||
Net income available to common unitholders | $ 49,728 | $ 44,589 | $ 109,955 | $ 124,998 |
Allocation to participating securities | (572) | (530) | (1,657) | (1,582) |
Numerator for basic and diluted net income available to common stockholders | $ 49,156 | $ 44,059 | $ 108,298 | $ 123,416 |
Denominator: | ||||
Basic weighted average vested shares outstanding (in shares) | 117,158,160 | 106,864,463 | 114,394,706 | 104,276,187 |
Effect of dilutive securities (in shares) | 441,333 | 518,728 | 470,058 | 619,697 |
Diluted weighted average vested shares and common stock equivalents outstanding (in shares) | 117,599,493 | 107,383,191 | 114,864,764 | 104,895,884 |
Basic earnings per unit: | ||||
Net income available to common stockholders per share (in dollars per share) | $ 0.42 | $ 0.41 | $ 0.95 | $ 1.18 |
Diluted earnings per unit: | ||||
Net income available to common stockholders per share (in dollars per share) | $ 0.42 | $ 0.41 | $ 0.94 | $ 1.18 |
Supplemental Cash Flow Inform_5
Supplemental Cash Flow Information of the Company - Supplemental Cash Flow (Details) - USD ($) $ in Thousands | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Jan. 01, 2019 | |
SUPPLEMENTAL CASH FLOWS INFORMATION: | ||||
Cash paid for interest, net of capitalized interest of $58,405 and $58,337 as of September 30, 2020 and 2019, respectively | $ 35,898 | $ 28,139 | ||
Capitalized interest | 58,405 | 58,337 | ||
Cash paid for amounts included in the measurement of ground lease liabilities | 4,686 | 3,917 | ||
NON-CASH INVESTING TRANSACTIONS: | ||||
Accrual for expenditures for operating properties and development properties | 154,253 | 148,468 | ||
Tenant improvements funded directly by tenants | 9,118 | 10,254 | ||
Assumption of accrued liabilities in connection with acquisitions | 0 | 3,967 | ||
Initial measurement of operating right of use ground lease assets | 95,733 | $ 96,348 | $ 82,938 | |
Initial measurement of operating ground lease liabilities | 97,936 | $ 98,400 | $ 87,409 | |
NON-CASH FINANCING TRANSACTIONS: | ||||
Accrual of dividends and distributions payable to common stockholders and common unitholders (Note 15) | 59,416 | 53,205 | ||
Exchange of common units of the Operating Partnership into shares of the Company’s common stock | $ 3,972 | $ 78 |
Supplemental Cash Flow Inform_6
Supplemental Cash Flow Information of the Company - Reconciliation of Cash and Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Dec. 31, 2018 |
RECONCILIATION OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH: | ||||
Cash and cash equivalents | $ 849,009 | $ 60,044 | $ 297,620 | $ 51,604 |
Restricted cash | 16,300 | 16,300 | 6,300 | 119,430 |
Cash and cash equivalents and restricted cash | $ 865,309 | $ 76,344 | $ 303,920 | $ 171,034 |
Supplemental Cash Flow Inform_7
Supplemental Cash Flow Information of the Operating Partnership - Supplemental Cash Flow (Details) - USD ($) $ in Thousands | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Jan. 01, 2019 | |
SUPPLEMENTAL CASH FLOWS INFORMATION: | ||||
Cash paid for interest, net of capitalized interest of $58,405 and $58,337 as of September 30, 2020 and 2019, respectively | $ 35,898 | $ 28,139 | ||
Capitalized interest | 58,405 | 58,337 | ||
Cash paid for amounts included in the measurement of ground lease liabilities | 4,686 | 3,917 | ||
NON-CASH INVESTING TRANSACTIONS: | ||||
Accrual for expenditures for operating properties and development properties | 154,253 | 148,468 | ||
Tenant improvements funded directly by tenants | 9,118 | 10,254 | ||
Assumption of accrued liabilities in connection with acquisitions | 0 | 3,967 | ||
Initial measurement of operating right of use ground lease assets | 95,733 | $ 96,348 | $ 82,938 | |
Initial measurement of operating ground lease liabilities | 97,936 | 98,400 | 87,409 | |
NON-CASH FINANCING TRANSACTIONS: | ||||
Accrual of distributions payable to common unitholders (Note 15) | 59,416 | 53,205 | ||
Kilroy Realty L.P. [Member] | ||||
SUPPLEMENTAL CASH FLOWS INFORMATION: | ||||
Cash paid for interest, net of capitalized interest of $58,405 and $58,337 as of September 30, 2020 and 2019, respectively | 35,898 | 28,139 | ||
Capitalized interest | 58,405 | 58,337 | ||
Cash paid for amounts included in the measurement of ground lease liabilities | 4,686 | 3,917 | ||
NON-CASH INVESTING TRANSACTIONS: | ||||
Accrual for expenditures for operating properties and development properties | 154,253 | 148,468 | ||
Tenant improvements funded directly by tenants | 9,118 | 10,254 | ||
Assumption of accrued liabilities in connection with acquisitions | 0 | 3,967 | ||
Initial measurement of operating right of use ground lease assets | 95,733 | 96,348 | 82,938 | |
Initial measurement of operating ground lease liabilities | 97,936 | $ 98,400 | $ 87,409 | |
NON-CASH FINANCING TRANSACTIONS: | ||||
Accrual of distributions payable to common unitholders (Note 15) | $ 59,416 | $ 53,205 |
Supplemental Cash Flow Inform_8
Supplemental Cash Flow Information of the Operating Partnership - Reconciliation of Cash and Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Dec. 31, 2018 |
RECONCILIATION OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH: | ||||
Cash and cash equivalents | $ 849,009 | $ 60,044 | $ 297,620 | $ 51,604 |
Restricted cash | 16,300 | 16,300 | 6,300 | 119,430 |
Cash and cash equivalents and restricted cash | 865,309 | 76,344 | 303,920 | 171,034 |
Kilroy Realty L.P. [Member] | ||||
RECONCILIATION OF CASH AND CASH EQUIVALENTS AND RESTRICTED CASH: | ||||
Cash and cash equivalents | 849,009 | 60,044 | 297,620 | 51,604 |
Restricted cash | 16,300 | 16,300 | 6,300 | 119,430 |
Cash and cash equivalents and restricted cash | $ 865,309 | $ 76,344 | $ 303,920 | $ 171,034 |
Subsequent Events (Details)
Subsequent Events (Details) $ in Millions | Oct. 14, 2020USD ($) |
Subsequent event [Member] | |
Subsequent Event [Line Items] | |
Payment of dividends | $ 59.4 |