EX-99.1 2 exhibit991.htm EX-99.1 Document

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Q1 2024 Supplemental Financial Report
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KILROY REALTY CORPORATION REPORTS
FIRST QUARTER FINANCIAL RESULTS
---------------

LOS ANGELES, May 2, 2024 - Kilroy Realty Corporation (NYSE: KRC) today reported financial results for its first quarter ended March 31, 2024.

First Quarter Highlights

Financial Results
Revenues of $278.6 million
Net income available to common stockholders of $0.42 per diluted share
Funds from operations available to common stockholders and unitholders (“FFO”) of $133.7 million, or $1.11 per diluted share

Leasing and Occupancy
Stabilized portfolio was 84.2% occupied and 85.7% leased at March 31, 2024
Signed approximately 400,000 square feet of leases, inclusive of 116,000 square feet of short-term leases, comprised of 161,000 square feet of new leasing on previously vacant space, 79,000 square feet of new leasing on currently occupied space, and 160,000 square feet of renewal leasing
GAAP rents increased 8.6% and cash rents decreased 2.9% from prior levels on stabilized leasing, excluding short-term leasing

Balance Sheet / Liquidity
In January, completed a public offering of $400.0 million of 12-year unsecured senior notes at an interest rate of 6.250% due January 2036
In March, closed on the recast of the Company’s $1.1 billion unsecured revolving credit facility, which now matures July 31, 2028, before extension options
In connection with the recast of the unsecured revolving credit facility, paid down the existing $520.0 million unsecured term loan facility by $200.0 million and extended the final maturity on an aggregate principal amount of $200.0 million of the remaining $320.0 million by twelve months to October 3, 2027, inclusive of exercising two one-year extension options
As of March 31, 2024, the Company had approximately $2.0 billion of total liquidity comprised of approximately $0.9 billion of cash and short-term investments and approximately $1.1 billion available under the unsecured revolving credit facility
In March, established a new $500.0 million “at-the-market” stock offering program
In March, the Company’s Board of Directors (the “Board”) approved a $500.0 million share repurchase program

Dividend
The Board declared and paid a regular quarterly cash dividend on its common stock of $0.54 per share, equivalent to an annual rate of $2.16


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Q1 2024 Supplemental Financial Report
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Net Income Available to Common Stockholders / FFO Guidance and Outlook
The Company is providing an updated Nareit-defined FFO per diluted share guidance for the full year 2024 of $4.15 to $4.30 per share, with a midpoint of $4.23 per share.
Full Year 2024 Range
as of February 2024
Full Year 2024 Range
as of May 2024
Low EndHigh EndLow EndHigh End
$ and shares/units in thousands, except per share/unit amounts
Net income available to common stockholders per share - diluted$1.45 $1.61 $1.46 $1.61 
Weighted average common shares outstanding - diluted (1)
118,000 118,000 118,000 118,000 
Net income available to common stockholders$171,000 $190,000 $172,500 $190,000 
Adjustments:
Net income attributable to noncontrolling common units of the Operating Partnership1,900 2,000 1,900 2,000 
Net income attributable to noncontrolling interests in consolidated property partnerships20,500 21,000 20,500 21,000 
Depreciation and amortization of real estate assets330,000 330,000 335,000 336,000 
Gains on sales of depreciable real estate— — — — 
Funds From Operations attributable to noncontrolling interests in consolidated property partnerships(30,000)(32,000)(31,000)(32,000)
Funds From Operations (2)
$493,400 $511,000 $498,900 $517,000 
Weighted average common shares/units outstanding – diluted (3)
120,250 120,250 120,250 120,250 
Funds From Operations per common share/unit – diluted (3)
$4.10 $4.25 $4.15 $4.30 

Key AssumptionsFebruary 2024 AssumptionsMay 2024 Assumptions
Change in same store cash NOI (2)
(4.0%) to (6.0%)(3.5%) to (5.5%)
Average full year occupancy82.5% to 84.0%82.5% to 84.0%
General and administrative expenses$72 million to $80 million$72 million to $80 million
Total development spending (4)
$200 million to $300 million$200 million to $300 million
Weighted average common shares/units outstanding – diluted (in thousands) (3)
120,250120,250
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(1)Calculated based on estimated weighted average shares outstanding, including non-participating share-based awards.
(2)See pages 32-33 for Management Statements on Funds From Operations and Same Store Cash Net Operating Income.
(3)Calculated based on weighted average shares outstanding, including participating and non-participating share-based awards, and the dilutive impact of contingently issuable shares, and assuming the exchange of all common limited partnership units outstanding. Reported amounts are attributable to common stockholders, common unitholders and restricted stock unitholders.
(4)Remaining 2024 development spending is $150 million to $250 million.

The Company’s guidance estimates for the full year 2024, and the reconciliation of net income available to common stockholders per share - diluted and FFO per share and unit - diluted included within this press release, reflect management’s views on current and future market conditions, including assumptions with respect to rental rates, occupancy levels, and the earnings impact of the events referenced in this press release. These guidance estimates do not include the impact on the Company’s operating results from potential future acquisitions, dispositions (including any associated gains or
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Q1 2024 Supplemental Financial Report
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losses), capital markets activity, impairment charges, or any events outside of the Company’s control, as the timing and magnitude of any such events are not known at the time the Company provides guidance. There can be no assurance that the Company’s actual results will not differ materially from these estimates.

Conference Call and Audio Webcast
The Company’s management will discuss first quarter results and the current business environment during the Company’s May 3, 2024 earnings conference call. The call will begin at 9:00 a.m. Pacific Time and last approximately one hour. To participate and obtain conference call dial-in details, register by using the following link, https://www.netroadshow.com/events/login?show=7488a962&confId=58187. Those interested in listening via the Internet can access the conference call at https://events.q4inc.com/attendee/123531322. It may be necessary to download audio software to hear the conference call. A replay of the conference call will be available via telephone on May 3, 2024 through May 10, 2024 by dialing (866) 813-9403 and entering passcode 591632. International callers should dial (929) 458-6194 and enter the same passcode. The replay will also be available on our website at https://investors.kilroyrealty.com/shareholders/investor-events/default.aspx.

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Table of Contents
This Supplemental Financial Report contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements include, among other things, information concerning lease expirations, debt maturities, potential investments, development and redevelopment activity, projected construction costs, dispositions, and other forward-looking financial data. In some instances, forward-looking statements can be identified by the use of forward-looking terminology such as “expect,” “future,” “will,” “would,” “pursue,” or “project”, and variations of such words and similar expressions that do not relate to historical matters. Forward-looking statements are based on Kilroy Realty Corporation’s current expectations, beliefs, and assumptions, and are not guarantees of future performance. Forward-looking statements are inherently subject to uncertainties, risks, changes in circumstances, trends, and factors that are difficult to predict, many of which are outside of Kilroy Realty Corporation’s control. Accordingly, actual performance, results, and events may vary materially from those indicated or implied in the forward-looking statements, and you should not rely on the forward-looking statements as predictions of future performance, results, or events. Numerous factors could cause actual future performance, results, and events to differ materially from those indicated in the forward-looking statements, including, among others: global market and general economic conditions, including periods of heightened inflation, and their effect on our liquidity and financial conditions and those of our tenants; adverse economic or real estate conditions generally, and specifically, in the States of California, Texas, and Washington; risks associated with our investment in real estate assets, which are illiquid, and with trends in the real estate industry; defaults on or non-renewal of leases by tenants; any significant downturn in tenants’ businesses, including bankruptcy, lack of liquidity or lack of funding, and the impact labor disruptions or strikes, such as episodic strikes in the entertainment industry, may have on our tenants’ businesses; our ability to re-lease property at or above current market rates; reduced demand for office space, including as a result of remote working and flexible working arrangements that allow work from remote locations other than an employer's office premises; costs to comply with government regulations, including environmental remediation; the availability of cash for distribution and debt service, and exposure to risk of default under debt obligations; increases in interest rates and our ability to manage interest rate exposure; changes in interest rates and the availability of financing on attractive terms or at all, which may adversely impact our future interest expense and our ability to pursue development, redevelopment, and acquisition opportunities and refinance existing debt; a decline in real estate asset valuations, which may limit our ability to dispose of assets at attractive prices, or obtain or maintain debt financing, and which may result in write-offs or impairment charges; significant competition, which may decrease the occupancy and rental rates of properties; potential losses that may not be covered by insurance; the ability to successfully complete acquisitions and dispositions on announced terms; the ability to successfully operate acquired, developed, and redeveloped properties; the ability to successfully complete development and redevelopment projects on schedule and within budgeted amounts; delays or refusals in obtaining all necessary zoning, land use, and other required entitlements, governmental permits and authorizations for our development and redevelopment properties; increases in anticipated capital expenditures, tenant improvement, and/or leasing costs; defaults on leases for land on which some of our properties are located; adverse changes to, or enactment or implementations of, tax laws or other applicable laws, regulations, or legislation, as well as business and consumer reactions to such changes; risks associated with joint venture investments, including our lack of sole decision-making authority, our reliance on co-venturers' financial condition, and disputes between us and our co-venturers; environmental uncertainties and risks related to natural disasters; risks associated with climate change and our sustainability strategies, and our ability to achieve our sustainability goals; and our ability to maintain our status as a REIT. These factors are not exhaustive and additional factors could adversely affect our business and financial performance. For a discussion of additional factors that could materially adversely affect Kilroy Realty Corporation’s business and financial performance, see the factors included under the caption “Risk Factors” in Kilroy Realty Corporation’s annual report on Form 10-K for the year ended December 31, 2023, and its other filings with the Securities and Exchange Commission. All forward-looking statements are based on currently available information and speak only as of the dates on which they are made. Kilroy Realty Corporation assumes no obligation to update any forward-looking statement made in this Supplemental Financial Report that becomes untrue because of subsequent events, new information, or otherwise, except to the extent we are required to do so in connection with our ongoing requirements under federal securities laws.
Pictured on cover page, in order of appearance: Aero, Long Beach, CA | 2100 Kettner, San Diego, CA | Westside Media Center, Los Angeles, CA



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01
Corporate Data and Financial Highlights

Company Background
Financial Highlights
Consolidated Balance Sheets
Consolidated Statements of Operations
Funds From Operations and Funds Available for Distribution
Net Operating Income



Q1 2024 Supplemental Financial Report
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Company Background

Kilroy Realty Corporation (NYSE: KRC), a publicly traded real estate investment trust and member of the S&P MidCap 400 Index, is a leading U.S. landlord and developer, with operations in San Diego, Los Angeles, the San Francisco Bay Area, Seattle, and Austin. The Company has over seven decades of experience developing, acquiring and managing office, life science, and mixed-use real estate assets. At March 31, 2024, the Company’s stabilized portfolio comprised of 121 buildings encompassing an aggregate of approximately 17.0 million square feet of primarily office and life science space that was 84.2% occupied and 85.7% leased. The Company also has 1,001 residential units in the Los Angeles and San Diego regions, which had an average occupancy of 93.1% for the quarter ended March 31, 2024. 
Board of DirectorsExecutive and Senior Management TeamInvestor Relations
John KilroyChairAngela M. AmanChief Executive Officer12200 W. Olympic Blvd., Suite 200
Los Angeles, CA 90064
(310) 481-8400
Web: www.kilroyrealty.com
E-mail: investorrelations@kilroyrealty.com
Edward F. Brennan, PhDLead IndependentJustin W. SmartPresident
Angela M. AmanEliott TrencherEVP, Chief Financial Officer and Chief Investment Officer
Jolie Hunt
Scott S. IngrahamRobert ParatteEVP, Chief Leasing Officer
Louisa G. RitterHeidi R. RothEVP, Chief Administrative Officer
Bill Hutcheson
Gary R. StevensonJohn OsmondEVP, Head of Asset ManagementSVP, Investor Relations & Capital Markets
Peter B. StonebergMerryl WerberSVP, Chief Accounting Officer and Controller
Equity Research Coverage
BarclaysJefferies LLC
Brendan Lynch(212) 526-9428Peter Abramowitz(212) 336-7241
BofA SecuritiesJ.P. Morgan
Camille Bonnel(646) 855-5042Anthony Paolone(212) 622-6682
BMO Capital Markets Corp.Keybanc Capital Markets
John P. Kim(212) 885-4115Upal Rana(917) 368-2316
BTIGMizuho Securities USA LLC
Thomas Catherwood(212) 738-6140Vikram Malhotra(212) 282-3827
Citigroup Investment ResearchRBC Capital Markets
Michael Griffin(212) 816-5871Mike Carroll(440) 715-2649
Deutsche Bank Securities, Inc. Scotiabank
Omotayo Okusanya(212) 250-9284Nicholas Yulico(212) 225-6904
Evercore ISIWells Fargo
Steve Sakwa(212) 446-9462Blaine Heck(443) 263-6529
Goldman Sachs & Co. LLCWolfe Research
Caitlin Burrows(212) 902-4736Andrew Rosivach(646) 582-9250
Green Street Advisors
Dylan Burzinski(949) 640-8780

Kilroy Realty Corporation is followed by the analysts listed above. Please note that any opinions, estimates or forecasts regarding Kilroy Realty Corporation’s performance made by these analysts are theirs alone and do not represent opinions, forecasts or predictions of Kilroy Realty Corporation or its management. Kilroy Realty Corporation does not by its reference above or distribution imply its endorsement of or concurrence with such information, conclusions or recommendations.

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Financial Highlights
(unaudited, $ in thousands, except per share amounts)
Three Months Ended
 3/31/202412/31/20239/30/20236/30/20233/31/2023
INCOME ITEMS:
Revenues$278,581 $269,016 $283,594 $284,282 $292,802 
Capitalized Interest and Debt Costs19,807 21,510 20,056 19,470 17,731 
Cash Lease Termination Fees (1)
3,851 3,437 1,682 225 — 
EARNINGS METRICS:
Net Income Available to Common Stockholders $49,920 $47,284 $52,762 $55,587 $56,608 
Net Operating Income (2)
189,270 184,725 193,396 198,584 208,425 
EBITDA, as adjusted (3)
182,602 171,387 173,798 178,020 184,577 
Company's Share of EBITDA, as adjusted (3)
173,942 163,059 165,408 169,858 173,018 
Company's Share of EBITDA, as adjusted less interest income (3)
160,752 152,363 158,393 166,437 171,558 
Funds From Operations (4)
133,723 129,257 134,047 141,853 145,959 
Funds Available for Distribution (4)
125,328 109,528 118,698 119,546 132,533 
PER SHARE INFORMATION (5):
Net Income Available to Common Stockholders per common share – diluted$0.42 $0.40 $0.45 $0.47 $0.48 
Funds From Operations per common share – diluted (4)
1.11 1.08 1.12 1.19 1.22 
Dividends declared per common share0.54 0.54 0.54 0.54 0.54 
RATIOS (6):
Net Operating Income Margin (2)
67.9 %68.7 %68.2 %69.9 %71.2 %
Net Debt to Company's Share of EBITDA, as adjusted Ratio (3)(7)
6.3x6.2x6.1x6.1x6.0x
Net Debt to Company's Share of EBITDA, as adjusted less interest income Ratio (3)(7)
6.6x6.5x6.2x6.2x6.1x
Fixed Charge Coverage Ratio - Net Income1.0x1.0x1.2x1.4x1.6x
Fixed Charge Coverage Ratio - EBITDA, as adjusted (3)
3.3x3.4x3.7x4.1x4.6x
Net Income Payout Ratio114.9 %120.5 %108.8 %104.3 %97.9 %
FFO / FAD Payout Ratio (4)
47.9 % / 51.1%49.5% / 58.4%47.7% / 53.9%45.0% / 53.4%43.8% / 48.2%
STABILIZED PORTFOLIO INFORMATION:
Change in Same Store Net Operating Income (8)
(9.4)%(10.6)%(5.0)%(2.3)%3.6 %
Change in Same Store Cash Net Operating Income (8)
(7.2)%(1.2)%0.2 %2.7 %16.3 %
Period End Occupancy Percentage84.2 %85.0 %86.2 %86.6 %89.6 %
Period End Leased Percentage85.7 %86.4 %87.5 %88.6 %91.6 %
Lease Composition (Net / Gross) (9)
51% / 49%51% / 49%49% / 51%49% / 51%48% / 52%

________________________
Note: Definitions for commonly used terms in this Supplemental Financial Report are on pages 35-37 “Definitions Included in Supplemental.” Refer to pages 31-33 for Management Statements on non-GAAP supplemental measures.        
(1)Represents cash receipts of lease termination fees in the period they are received, which may not correspond to the timing of GAAP revenue recognition of the lease termination fee over the remaining term of the lease.
(2)Please refer to page 38 for a reconciliation of GAAP Net Income Available to Common Stockholders to Net Operating Income.
(3)Please refer to page 40 for a reconciliation of GAAP Net Income Available to Common Stockholders to the Company's EBITDA metrics.
(4)Please refer to page 6 for reconciliations of GAAP Net Income Available to Common Stockholders to Funds From Operations available to common stockholders and unitholders and Funds Available for Distribution to common stockholders and unitholders, and page 41 for a reconciliation of GAAP Net Cash Provided by Operating Activities to Funds Available for Distribution to common stockholders and unitholders.
(5)Reported amounts are attributable to common stockholders, common unitholders and restricted stock unitholders.
(6)Ratios are calculated based on current quarter annualized amounts unless otherwise noted.
(7)Calculated on a trailing-12 month basis. Please refer to page 29 for the calculation of this ratio.
(8)Calculated as the change over the same prior year period. The Same Store Portfolio was comprised of 119 properties during the three months ended March 31, 2024. For all quarterly periods in 2023, the Same Store Portfolio was comprised of 115 properties.
(9)Based upon annualized base rent, including 100% of consolidated property partnerships, as of the period end. Excludes leases at our three residential properties.
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Consolidated Balance Sheets
(unaudited, $ in thousands)
3/31/202412/31/20239/30/20236/30/20233/31/2023
ASSETS:
Land and improvements$1,743,170 $1,743,170 $1,743,170 $1,738,242 $1,738,242 
Buildings and improvements8,479,359 8,463,674 8,431,499 8,353,596 8,335,285 
Undeveloped land and construction in progress2,114,242 2,034,804 1,950,424 1,894,545 1,788,542 
Total real estate assets held for investment12,336,771 12,241,648 12,125,093 11,986,383 11,862,069 
Accumulated depreciation and amortization(2,594,996)(2,518,304)(2,443,659)(2,369,515)(2,294,202)
Total real estate assets held for investment, net9,741,775 9,723,344 9,681,434 9,616,868 9,567,867 
Cash and cash equivalents855,007 510,163 618,794 361,885 476,358 
Marketable securities109,513 284,670 278,789 25,786 23,288 
Current receivables, net13,291 13,609 11,383 10,686 15,926 
Deferred rent receivables, net457,494 460,979 466,073 463,640 457,870 
Deferred leasing costs and acquisition-related intangible assets, net226,506 229,705 228,742 230,559 238,184 
Right of use ground lease assets130,026 125,506 125,765 126,022 126,277 
Prepaid expenses and other assets, net65,588 53,069 60,141 75,588 63,622 
TOTAL ASSETS$11,599,200 $11,401,045 $11,471,121 $10,911,034 $10,969,392 
LIABILITIES AND EQUITY:
Liabilities:
Secured debt, net$601,990 $603,225 $604,480 $240,142 $241,547 
Unsecured debt, net4,518,297 4,325,153 4,330,326 4,172,833 4,171,029 
Accounts payable, accrued expenses and other liabilities401,892 371,179 426,662 377,733 418,902 
Ground lease liabilities128,966 124,353 124,517 124,678 124,837 
Accrued dividends and distributions65,111 64,440 64,423 64,438 64,461 
Deferred revenue and acquisition-related intangible liabilities, net166,436 173,638 178,542 185,429 195,629 
Rents received in advance and tenant security deposits73,777 79,364 74,646 78,187 80,565 
Total liabilities5,956,469 5,741,352 5,803,596 5,243,440 5,296,970 
Equity:
Stockholders’ Equity
Common stock1,174 1,173 1,173 1,172 1,171 
Additional paid-in capital5,208,753 5,205,839 5,195,106 5,184,227 5,175,402 
Retained earnings203,080 221,149 237,665 248,695 257,079 
Total stockholders’ equity5,413,007 5,428,161 5,433,944 5,434,094 5,433,652 
Noncontrolling Interests
Common units of the Operating Partnership53,087 53,275 53,328 53,358 53,386 
Noncontrolling interests in consolidated property partnerships176,637 178,257 180,253 180,142 185,384 
Total noncontrolling interests229,724 231,532 233,581 233,500 238,770 
Total equity5,642,731 5,659,693 5,667,525 5,667,594 5,672,422 
TOTAL LIABILITIES AND EQUITY$11,599,200 $11,401,045 $11,471,121 $10,911,034 $10,969,392 
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Consolidated Statements of Operations
(unaudited, $ and shares in thousands, except per share amounts)
Three Months Ended
3/31/202412/31/20239/30/20236/30/20233/31/2023
REVENUES
Rental income$274,890 $265,643 $280,681 $281,309 $290,104 
Other property income3,691 3,373 2,913 2,973 2,698 
Total revenues278,581 269,016 283,594 284,282 292,802 
EXPENSES
Property expenses57,320 60,731 59,445 55,008 53,780 
Real estate taxes29,239 21,000 28,363 28,277 28,228 
Ground leases2,752 2,560 2,390 2,413 2,369 
General and administrative expenses (1)
17,579 22,078 24,761 22,659 23,936 
Leasing costs2,279 1,956 1,852 1,326 1,372 
Depreciation and amortization88,031 86,016 85,224 90,362 93,676 
Total expenses197,200 194,341 202,035 200,045 203,361 
OTHER INCOME (EXPENSES)
Interest income13,190 10,696 7,015 3,421 1,460 
Interest expense(38,871)(32,325)(29,837)(26,383)(25,671)
Total other expenses(25,681)(21,629)(22,822)(22,962)(24,211)
NET INCOME55,700 53,046 58,737 61,275 65,230 
Net income attributable to noncontrolling common units of the Operating Partnership(502)(471)(515)(537)(560)
Net income attributable to noncontrolling interests in consolidated property partnerships (5,278)(5,291)(5,460)(5,151)(8,062)
Total income attributable to noncontrolling interests(5,780)(5,762)(5,975)(5,688)(8,622)
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS$49,920 $47,284 $52,762 $55,587 $56,608 
Weighted average common shares outstanding – basic117,338 117,240 117,185 117,155 117,059 
Weighted average common shares outstanding – diluted117,961 117,816 117,495 117,360 117,407 
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS PER SHARE
Net income available to common stockholders per share – basic$0.42 $0.40 $0.45 $0.47 $0.48 
Net income available to common stockholders per share – diluted$0.42 $0.40 $0.45 $0.47 $0.48 
_______________________
(1)The three months ended December 31, 2023, September 30, 2023, June 30, 2023 and March 31, 2023 includes $4.9 million, $5.8 million, $3.1 million and $3.2 million, respectively, of retirement costs for our former CEO and former President, primarily comprised of accelerated stock compensation expense.
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Funds From Operations and Funds Available for Distribution
(unaudited, $ in thousands, except per share amounts)
Three Months Ended
3/31/202412/31/20239/30/20236/30/20233/31/2023
FUNDS FROM OPERATIONS (1):
Net income available to common stockholders$49,920 $47,284 $52,762 $55,587 $56,608 
Adjustments:
Net income attributable to noncontrolling common units of the Operating Partnership502 471 515 537 560 
Net income attributable to noncontrolling interests in consolidated property partnerships5,278 5,291 5,460 5,151 8,062 
Depreciation and amortization of real estate assets 86,460 84,402 83,518 88,473 91,671 
Funds From Operations attributable to noncontrolling interests in consolidated property partnerships(8,437)(8,191)(8,208)(7,895)(10,942)
Funds From Operations (1)
$133,723 $129,257 $134,047 $141,853 $145,959 
Weighted average common shares/units outstanding – basic (2)
119,660 118,896 118,934 118,930 118,818 
Weighted average common shares/units outstanding – diluted (3)
120,283 119,473 119,245 119,134 119,165 
FFO per common share/unit – basic (1)
$1.12 $1.09 $1.13 $1.19 $1.23 
FFO per common share/unit – diluted (1)
$1.11 $1.08 $1.12 $1.19 $1.22 
FUNDS AVAILABLE FOR DISTRIBUTION (1):
Funds From Operations (1)
$133,723 $129,257 $134,047 $141,853 $145,959 
Adjustments:
Recurring tenant improvements, leasing commissions and capital expenditures(11,763)(31,411)(20,519)(17,850)(17,766)
Amortization of deferred revenue related to tenant-funded tenant improvements (4)
(6,502)(5,717)(4,883)(4,912)(5,185)
Net effect of straight-line rents3,536 5,143 (2,382)(5,720)(5,619)
Amortization of net below market rents (5)
(904)(973)(1,034)(1,608)(3,033)
Amortization of deferred financing costs and net debt discount/premium1,757 1,279 1,312 1,254 1,355 
Non-cash amortization of share-based compensation awards3,381 8,498 10,596 7,721 10,043 
Lease related adjustments, leasing costs and other (6)
1,216 1,966 (401)(2,106)5,462 
Adjustments attributable to noncontrolling interests in consolidated property partnerships 884 1,486 1,962 914 1,317 
Funds Available for Distribution (1)
$125,328 $109,528 $118,698 $119,546 $132,533 
________________________
(1)Please refer to pages 31-33 for Management Statements on non-GAAP supplemental measures. Reported per common share/unit amounts are attributable to common stockholders, common unitholders and restricted stock unitholders.
(2)Calculated based on weighted average shares outstanding including participating share-based awards and assuming the exchange of all common limited partnership units outstanding.
(3)Calculated based on weighted average shares outstanding including participating and non-participating share-based awards, dilutive impact of contingently issuable shares, and assuming the exchange of all common limited partnership units outstanding.
(4)Represents revenue recognized during the period as a result of the amortization of deferred revenue recorded for tenant-funded tenant improvements.
(5)Represents the non-cash adjustment related to the acquisition of buildings with above and/or below market rents.
(6)Includes other cash and non-cash adjustments attributable to lease-related matters including GAAP revenue recognition timing differences, leasing costs and other.
6

Q1 2024 Supplemental Financial Report
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Net Operating Income
(unaudited, $ in thousands)
Three Months Ended March 31,
20242023% Change
Operating Revenues:
Rental income (1)
$226,586 $243,507 (6.9)%
Tenant reimbursements (1)
48,304 46,597 3.7 %
Other property income3,691 2,698 36.8 %
Total operating revenues278,581 292,802 (4.9)%
Operating Expenses:
Property expenses 57,320 53,780 6.6 %
Real estate taxes29,239 28,228 3.6 %
Ground leases2,752 2,369 16.2 %
Total operating expenses89,311 84,377 5.8 %
Net Operating Income (2)
$189,270 $208,425 (9.2)%

chart-d3520c427e894ef79daa.jpgchart-429c07ea449443ceb00a.jpg
regionsa.jpg
________________________
(1)Revenue from tenant reimbursements is included in rental income on our consolidated statements of operations.
(2)Please refer to page 31-33 for Management Statements on non-GAAP supplemental measures and page 38 for a reconciliation of GAAP Net Income Available to Common Stockholders to Net Operating Income.
7


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02
Portfolio Data

Same Store Analysis
Stabilized Portfolio Occupancy Overview by Region
Information on Leases Commenced & Leases Executed
Stabilized Portfolio Capital Expenditures
Stabilized Portfolio Lease Expirations
Top 20 Tenants
Tenant Industry Diversification
Consolidated Ventures (Noncontrolling Property Partnerships)


Q1 2024 Supplemental Financial Report
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Same Store Analysis
(unaudited, $ in thousands)
Three Months Ended March 31,
20242023% Change% Contribution
Total Same Store Portfolio (1)
Number of properties119 119 
Square Feet16,213,906 16,213,906 
Average Occupancy85.2 %89.9 %
Percent of Stabilized Portfolio95.1 %
Operating Revenues:
Rental income (2)
$217,777 $236,471 (7.9)%(9.3)%
Tenant reimbursements (2)
44,809 43,400 3.2 %0.7 %
Other property income 3,133 2,426 29.1 %0.4 %
Total operating revenues265,719 282,297 (5.9)%(8.2)%
Operating Expenses:
Property expenses55,379 52,558 5.4 %(1.5)%
Real estate taxes 25,703 26,326 (2.4)%0.3 %
Ground leases 1,945 1,854 4.9 %0.0 %
Total operating expenses83,027 80,738 2.8 %(1.2)%
Net Operating Income$182,692 $201,559 (9.4)%(9.4)%
Same Store Analysis (Cash Basis)
 Three Months Ended March 31,
 20242023% Change% Contribution
Total operating revenues (3)
$263,181 $274,939 (4.3)%(6.1)%
Total operating expenses82,930 80,638 2.8 %(1.1)%
Cash Net Operating Income (4)
$180,251 $194,301 (7.2)%(7.2)%
________________________
(1)Same Store is defined as all properties owned and included in our stabilized portfolio as of January 1, 2023 and still owned and included in the stabilized portfolio as of March 31, 2024. Same Store includes 100% of consolidated property partnerships as well as our three residential properties.
(2)Revenue from tenant reimbursements is included in rental income on our consolidated statements of operations.
(3)For same store cash basis, lease termination and restoration fees are recognized in the period they are received, which may not correspond to the timing of GAAP revenue recognition. Tenant prepayments are recognized in the applicable lease billing period.
(4)Please refer to pages 31-33 for Management Statements on non-GAAP supplemental measures. Please refer to page 38 for a reconciliation of GAAP Net Income Available to Common Stockholders to Same Store Net Operating Income and Same Store Cash Net Operating Income. Adjustments to GAAP operating revenues include the net effect of straight-line rents, amortization of deferred revenue related to tenant-funded tenant improvements, amortization of above and below market lease intangibles and revenue reversals (recoveries) related to tenant creditworthiness.

9

Q1 2024 Supplemental Financial Report
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Stabilized Portfolio Occupancy Overview by Region

Portfolio BreakdownOccupied atLeased at
STABILIZED PORTFOLIO (1)(2)
YTD NOI %SF %Total SF 3/31/202412/31/20233/31/202412/31/2023
Los Angeles
Hollywood / West Hollywood8.3 %8.1 %1,383,563 85.9 %87.9 %87.1 %91.3 %
El Segundo3.7 %6.4 %1,103,595 76.0 %75.4 %76.0 %75.6 %
Long Beach2.3 %5.6 %957,706 80.5 %85.7 %83.8 %85.7 %
West Los Angeles3.1 %4.3 %726,975 58.8 %60.0 %58.8 %60.0 %
Culver City0.5 %1.0 %166,207 55.6 %71.9 %55.6 %71.9 %
Total Los Angeles17.9 %25.4 %4,338,046 76.5 %79.0 %77.6 %80.1 %
San Diego
Del Mar12.8 %10.5 %1,791,486 96.5 %96.9 %98.1 %97.1 %
I-15 Corridor1.5 %2.5 %433,851 79.9 %82.6 %83.8 %85.5 %
Little Italy / Point Loma0.4 %1.9 %319,879 41.7 %41.6 %43.7 %43.8 %
University Towne Center1.8 %1.4 %231,060 100.0 %100.0 %100.0 %100.0 %
Total San Diego16.5 %16.3 %2,776,276 87.9 %88.6 %89.7 %89.5 %
San Francisco Bay Area
San Francisco CBD25.1 %20.0 %3,400,600 84.7 %85.0 %84.8 %85.5 %
Silicon Valley8.6 %7.5 %1,286,100 100.0 %100.0 %100.0 %100.0 %
South San Francisco8.4 %4.7 %806,109 100.0 %100.0 %100.0 %100.0 %
Other Peninsula4.7 %4.0 %677,213 85.3 %93.2 %96.6 %96.6 %
Total San Francisco Bay Area46.8 %36.2 %6,170,022 89.9 %91.0 %91.3 %91.6 %
Seattle
Lake Union / Denny Regrade10.1 %12.2 %2,080,883 78.8 %78.9 %79.2 %78.9 %
Bellevue5.6 %5.4 %919,295 94.5 %93.6 %95.1 %95.4 %
Total Seattle15.7 %17.6 %3,000,178 83.6 %83.4 %84.1 %84.0 %
Austin
Austin CBD3.1 %4.5 %758,975 71.5 %64.9 %78.2 %78.2 %
Total Austin3.1 %4.5 %758,975 71.5 %64.9 %78.2 %78.2 %
TOTAL STABILIZED PORTFOLIO100.0 %100.0 %17,043,497 84.2 %85.0 %85.7 %86.4 %
Average Occupancy
Quarter-to-Date
84.5%
________________________
(1)Excludes residential properties.
(2)Buildings within a complex of properties are analyzed at the complex level.
10

Q1 2024 Supplemental Financial Report
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Stabilized Portfolio Occupancy Overview by Region, continued
 Occupied atLeased at
SubmarketSquare Feet3/31/202412/31/20233/31/202412/31/2023
Los Angeles, California
1350 Ivar AvenueHollywood16,448 100.0 %100.0 %100.0 %100.0 %
1355 Vine StreetHollywood183,129 100.0 %100.0 %100.0 %100.0 %
1375 Vine StreetHollywood159,236 100.0 %100.0 %100.0 %100.0 %
1395 Vine StreetHollywood2,575 100.0 %100.0 %100.0 %100.0 %
1500 N. El Centro AvenueHollywood113,447 63.6 %41.4 %63.6 %63.6 %
1525 N. Gower StreetHollywood9,610 100.0 %100.0 %100.0 %100.0 %
1575 N. Gower StreetHollywood264,430 100.0 %100.0 %100.0 %100.0 %
6115 W. Sunset BoulevardHollywood26,238 23.8 %53.0 %23.8 %53.0 %
6121 W. Sunset BoulevardHollywood93,418 100.0 %100.0 %100.0 %100.0 %
6255 W. Sunset BoulevardHollywood325,772 66.5 %77.9 %67.0 %84.1 %
8560 W. Sunset BoulevardWest Hollywood76,359 77.4 %87.6 %91.7 %87.6 %
8570 W. Sunset BoulevardWest Hollywood49,276 94.5 %94.5 %99.0 %99.0 %
8580 W. Sunset BoulevardWest Hollywood6,875 59.0 %59.0 %59.0 %59.0 %
8590 W. Sunset BoulevardWest Hollywood56,750 97.4 %97.4 %99.7 %97.4 %
2240 E. Imperial HighwayEl Segundo122,870 100.0 %100.0 %100.0 %100.0 %
2250 E. Imperial HighwayEl Segundo298,728 46.2 %46.2 %46.2 %46.2 %
2260 E. Imperial HighwayEl Segundo298,728 100.0 %100.0 %100.0 %100.0 %
909 N. Pacific Coast HighwayEl Segundo244,880 79.3 %78.6 %79.3 %79.3 %
999 N. Pacific Coast HighwayEl Segundo138,389 61.3 %58.1 %61.3 %58.1 %
3750 Kilroy Airport WayLong Beach10,718 100.0 %100.0 %100.0 %100.0 %
3760 Kilroy Airport WayLong Beach166,761 77.0 %77.0 %77.0 %77.0 %
3780 Kilroy Airport WayLong Beach221,452 89.9 %91.4 %91.8 %91.4 %
3800 Kilroy Airport WayLong Beach192,476 89.3 %89.3 %89.3 %89.3 %
3840 Kilroy Airport WayLong Beach138,441 77.6 %77.6 %77.6 %77.6 %
3880 Kilroy Airport WayLong Beach96,923 51.9 %100.0 %51.9 %100.0 %
3900 Kilroy Airport WayLong Beach130,935 78.7 %78.7 %100.0 %78.7 %
12100 W. Olympic BoulevardWest Los Angeles155,679 74.1 %74.1 %74.1 %74.1 %
12200 W. Olympic BoulevardWest Los Angeles154,544 32.0 %32.0 %32.0 %32.0 %
12233 W. Olympic BoulevardWest Los Angeles156,746 48.5 %52.7 %48.5 %52.7 %
12312 W. Olympic BoulevardWest Los Angeles76,644 100.0 %100.0 %100.0 %100.0 %
2100/2110 Colorado AvenueWest Los Angeles104,853 55.4 %55.4 %55.4 %55.4 %
501 Santa Monica BoulevardWest Los Angeles78,509 66.5 %68.4 %66.5 %68.4 %
3101-3243 La Cienega BoulevardCulver City166,207 55.6 %71.9 %55.6 %71.9 %
Total Los Angeles 4,338,046 76.5 %79.0 %77.6 %80.1 %
 

11

Q1 2024 Supplemental Financial Report
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Stabilized Portfolio Occupancy Overview by Region, continued
Occupied atLeased at
SubmarketSquare Feet3/31/202412/31/20233/31/202412/31/2023
San Diego, California
12225 El Camino RealDel Mar58,401 100.0 %100.0 %100.0 %100.0 %
12235 El Camino RealDel Mar53,751 100.0 %100.0 %100.0 %100.0 %
12340 El Camino Real Del Mar109,307 100.0 %100.0 %100.0 %100.0 %
12390 El Camino RealDel Mar73,238 100.0 %100.0 %100.0 %100.0 %
12770 El Camino RealDel Mar75,035 100.0 %100.0 %100.0 %100.0 %
12780 El Camino RealDel Mar140,591 100.0 %100.0 %100.0 %100.0 %
12790 El Camino RealDel Mar87,944 100.0 %100.0 %100.0 %100.0 %
12830 El Camino RealDel Mar196,444 100.0 %100.0 %100.0 %100.0 %
12860 El Camino RealDel Mar92,042 100.0 %100.0 %100.0 %100.0 %
12348 High Bluff DriveDel Mar39,192 100.0 %100.0 %100.0 %100.0 %
12400 High Bluff Drive Del Mar216,518 91.7 %91.7 %100.0 %91.7 %
3579 Valley Centre Drive
Del Mar54,960 94.7 %94.7 %94.7 %94.7 %
3611 Valley Centre Drive Del Mar132,425 100.0 %100.0 %100.0 %100.0 %
3661 Valley Centre DriveDel Mar131,662 95.3 %100.0 %100.0 %100.0 %
3721 Valley Centre DriveDel Mar115,193 78.4 %78.4 %78.4 %78.4 %
3811 Valley Centre DriveDel Mar118,912 100.0 %100.0 %100.0 %100.0 %
3745 Paseo PlaceDel Mar95,871 89.6 %89.6 %93.2 %93.2 %
 13480 Evening Creek Drive NorthI-15 Corridor143,401 63.1 %54.5 %63.1 %63.1 %
13500 Evening Creek Drive NorthI-15 Corridor143,749 81.0 %92.9 %92.9 %92.9 %
13520 Evening Creek Drive NorthI-15 Corridor146,701 95.2 %100.0 %95.2 %100.0 %
2100 Kettner Boulevard Little Italy212,423 21.2 %20.5 %24.2 %23.8 %
2305 Historic Decatur RoadPoint Loma107,456 82.1 %82.1 %82.1 %82.1 %
9455 Towne Centre DriveUniversity Towne Center160,444 100.0 %100.0 %100.0 %100.0 %
9514 Towne Centre Drive *University Towne Center70,616 100.0 %100.0 %100.0 %100.0 %
Total San Diego2,776,276 87.9 %88.6 %89.7 %89.5 %
________________________
* Excluded from our Same Store portfolio.







12

Q1 2024 Supplemental Financial Report
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Stabilized Portfolio Occupancy Overview by Region, continued
 Occupied atLeased at
SubmarketSquare Feet3/31/202412/31/20233/31/202412/31/2023
San Francisco Bay Area, California
100 Hooper StreetSan Francisco CBD417,914 95.5 %95.5 %95.5 %95.5 %
100 First StreetSan Francisco CBD480,457 92.8 %98.3 %93.6 %98.3 %
303 Second StreetSan Francisco CBD784,658 73.2 %71.1 %73.2 %73.5 %
201 Third StreetSan Francisco CBD346,538 68.2 %68.2 %68.2 %68.2 %
360 Third StreetSan Francisco CBD436,357 66.6 %66.6 %66.6 %66.6 %
250 Brannan StreetSan Francisco CBD100,850 100.0 %100.0 %100.0 %100.0 %
301 Brannan StreetSan Francisco CBD82,834 100.0 %100.0 %100.0 %100.0 %
333 Brannan StreetSan Francisco CBD185,602 100.0 %100.0 %100.0 %100.0 %
345 Brannan StreetSan Francisco CBD110,050 99.7 %99.7 %99.7 %99.7 %
350 Mission StreetSan Francisco CBD455,340 99.7 %99.7 %99.7 %99.7 %
1290-1300 Terra Bella Avenue Silicon Valley114,175 100.0 %100.0 %100.0 %100.0 %
680 E. Middlefield RoadSilicon Valley171,676 100.0 %100.0 %100.0 %100.0 %
690 E. Middlefield RoadSilicon Valley171,215 100.0 %100.0 %100.0 %100.0 %
1701 Page Mill RoadSilicon Valley128,688 100.0 %100.0 %100.0 %100.0 %
3150 Porter DriveSilicon Valley36,886 100.0 %100.0 %100.0 %100.0 %
505 Mathilda AvenueSilicon Valley212,322 100.0 %100.0 %100.0 %100.0 %
555 Mathilda AvenueSilicon Valley212,322 100.0 %100.0 %100.0 %100.0 %
599 Mathilda AvenueSilicon Valley76,031 100.0 %100.0 %100.0 %100.0 %
605 Mathilda AvenueSilicon Valley162,785 100.0 %100.0 %100.0 %100.0 %
345 Oyster Point BoulevardSouth San Francisco40,410 100.0 %100.0 %100.0 %100.0 %
347 Oyster Point BoulevardSouth San Francisco39,780 100.0 %100.0 %100.0 %100.0 %
349 Oyster Point BoulevardSouth San Francisco65,340 100.0 %100.0 %100.0 %100.0 %
350 Oyster Point BoulevardSouth San Francisco234,892 100.0 %100.0 %100.0 %100.0 %
352 Oyster Point BoulevardSouth San Francisco232,215 100.0 %100.0 %100.0 %100.0 %
354 Oyster Point BoulevardSouth San Francisco193,472 100.0 %100.0 %100.0 %100.0 %
4100 Bohannon DriveOther Peninsula47,643 100.0 %100.0 %100.0 %100.0 %
4200 Bohannon DriveOther Peninsula43,600 69.4 %69.4 %69.4 %69.4 %
4300 Bohannon DriveOther Peninsula63,430 48.8 %48.8 %85.1 %85.1 %
4500 Bohannon DriveOther Peninsula63,429 100.0 %100.0 %100.0 %100.0 %
4600 Bohannon DriveOther Peninsula48,413 100.0 %100.0 %100.0 %100.0 %
4700 Bohannon DriveOther Peninsula63,429 100.0 %100.0 %100.0 %100.0 %
900 Jefferson AvenueOther Peninsula228,505 100.0 %100.0 %100.0 %100.0 %
900 Middlefield RoadOther Peninsula118,764 54.7 %100.0 %100.0 %100.0 %
Total San Francisco Bay Area6,170,022 89.9 %91.0 %91.3 %91.6 %


13

Q1 2024 Supplemental Financial Report
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Stabilized Portfolio Occupancy Overview by Region, continued
Occupied atLeased at
SubmarketSquare Feet3/31/202412/31/20233/31/202412/31/2023
Seattle, Washington
333 Dexter Avenue NorthLake Union618,766 100.0 %100.0 %100.0 %100.0 %
701 N. 34th StreetLake Union141,860 100.0 %100.0 %100.0 %100.0 %
801 N. 34th StreetLake Union173,615 100.0 %100.0 %100.0 %100.0 %
837 N. 34th StreetLake Union112,487 100.0 %100.0 %100.0 %100.0 %
320 Westlake Avenue NorthLake Union184,644 94.3 %96.1 %94.3 %96.1 %
321 Terry Avenue NorthLake Union135,755 100.0 %100.0 %100.0 %100.0 %
401 Terry Avenue NorthLake Union174,530 100.0 %100.0 %100.0 %100.0 %
2001 West 8th AvenueDenny Regrade539,226 20.0 %20.0 %21.6 %20.0 %
601 108th Avenue NEBellevue490,738 98.6 %100.0 %98.6 %100.0 %
10900 NE 4th StreetBellevue428,557 89.7 %86.2 %91.1 %90.1 %
Total Seattle3,000,178 83.6 %83.4 %84.1 %84.0 %
Austin, Texas
200 W. 6th Street *Austin CBD758,975 71.5 %64.9 %78.2 %78.2 %
Total Austin758,975 71.5 %64.9 %78.2 %78.2 %
TOTAL STABILIZED PORTFOLIO17,043,497 84.2 %85.0 %85.7 %86.4 %
________________________
* Excluded from our Same Store portfolio.

Average Residential Occupancy
Quarter-to-Date
RESIDENTIAL PROPERTIESSubmarketTotal No. of Units3/31/202412/31/2023
Los Angeles, California
1550 N. El Centro AvenueHollywood20090.6%91.7%
6390 De Longpre AvenueHollywood19392.4%91.2%
San Diego, California
3200 Paseo Village WayDel Mar60894.1%93.1%
TOTAL RESIDENTIAL PROPERTIES1,00193.1%92.5%
14

Q1 2024 Supplemental Financial Report
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Information on Leases Commenced (1)
Quarter to Date# of Leases
Square Feet
Weighted
Average Lease
Term (Mo.)
TI/LC
Per Sq.Ft. (2)
TI/LC
Per Sq.Ft. /Year (2)
Changes in
GAAP Rents (3)
Changes in
Cash Rents (3)
NewRenewalNewRenewalTotal
2nd Gen Leasing (4)(5)
10 12 109,490 129,776 239,266 54 $38.46 $8.55 4.3 %(7.1)%
1st Gen / Major Repositioning /
In-Process Development & Redevelopment Leasing (5)
— 53,469 — 53,469 182 $198.94 $13.12 
TOTAL12 12 162,959 129,776 292,735 
________________________
(1)Includes 100% of consolidated property partnerships.
(2)Includes tenant improvement costs and third-party leasing commissions. Amounts exclude tenant-funded tenant improvements and indirect leasing costs.
(3)Calculated as the change between GAAP rents / stated rents for new / renewed leases and the expiring GAAP rents for the same space. Space that was vacant when the property was acquired is excluded from our change in rents calculations to provide a more meaningful market comparison.
(4)Excludes leases with a lease term of less than one year.
(5)Refer to pages 35-37 "Definitions Included in Supplemental."


15

Q1 2024 Supplemental Financial Report
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Information on Leases Executed (1)
Quarter to Date (2)
# of LeasesSquare FeetWeighted
Average Lease
Term (Mo.)
TI/LC
Per Sq.Ft. (3)
TI/LC
Per Sq.Ft. /Year (3)
Changes in
GAAP Rents (4)
Changes in
Cash Rents (4)
Retention
Rates
NewRenewalNewRenewalTotal
2nd Gen Leasing (5)(6)
16 12 140,401 129,776 270,177 55 $42.91 $9.36 8.6 %(2.9)%30.9 %
1st Gen / Major Repositioning /
In-Process Development & Redevelopment Leasing (6)
— 13,717 — 13,717 69 $50.24 $8.74 
TOTAL20 12 154,118 129,776 283,894 
________________________
(1)Includes 100% of consolidated property partnerships. Excludes leases with a lease term of less than one year. During the three months ended March 31, 2024, we signed 115,864 square feet of leases with a lease term less than one year.
(2)During the three months ended March 31, 2024, 16 new leases totaling 134,501 square feet were signed but not commenced as of March 31, 2024.
(3)Includes tenant improvement costs and third-party leasing commissions. Amounts exclude tenant-funded tenant improvements and indirect leasing costs.
(4)Calculated as the change between GAAP rents / stated rents for new / renewed leases and the expiring GAAP rents for the same space. Space that was vacant when the property was acquired is excluded from our change in rents calculations to provide a more meaningful market comparison.
(5)Excludes leases with a lease term of less than one year.
(6)Refer to pages 35-37 "Definitions Included in Supplemental."




16

Q1 2024 Supplemental Financial Report
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Stabilized Portfolio Capital Expenditures
($ in thousands)
Q1 2024Q4 2023Q3 2023Q2 2023Q1 2023
2nd Gen Capital Expenditures: (1) (2)
Capital Improvements$4,962 $12,872 $6,361 $7,263 $7,297 
Tenant Improvements & Leasing Commissions 6,801 18,539 14,158 10,587 10,469 
Total$11,763 $31,411 $20,519 $17,850 $17,766 
Average Capital Expenditures to Average NOI Ratio - Trailing Five Quarters10.2 %
Q1 2024Q4 2023Q3 2023Q2 2023Q1 2023
Major Repositioning Capital Expenditures: (1) (3)
Capital Improvements$7,130 $1,411 $2,092 $1,298 $396 
Tenant Improvements & Leasing Commissions89 (329)— — — 
Total $7,219 $1,082 $2,092 $1,298 $396 
Q1 2024Q4 2023Q3 2023Q2 2023Q1 2023
1st Gen Capital Expenditures: (1) (4)
Tenant Improvements & Leasing Commissions$10,063 N/AN/AN/AN/A
Total$10,063 N/AN/AN/AN/A
________________________
(1)Refer to pages 35-37 “Definitions Included in Supplemental.”
(2)Includes 100% of capital expenditures of consolidated property partnerships.
(3)Prior to Q1 2024, this category was titled "1st Generation (Nonrecurring) Capital Expenditures." This category represents significant non-recurring capital expenditures for repositioning space that is expected to result in additional revenue generated when the space is re-leased.
(4)New category of capital expenditures beginning in Q1 2024.

17

Q1 2024 Supplemental Financial Report
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Stabilized Portfolio Lease Expiration Summary (1)
($ in thousands, except for annualized rent per sq. ft.)
chart-f484c5c313b3427080ba.jpg
# of Expiring Leases4670637152384442151320
% of Total Leased Sq. Ft.4.9 %5.0 %14.1 %7.5 %7.9 %8.1 %11.4 %14.8 %7.9 %8.2 %10.2 %
Annualized Base Rent (ABR)
$34,664$32,884$94,594$43,775$69,322$61,695$95,748$137,863$73,937$69,315$89,588
% of Total ABR (2)
4.3 %4.1 %11.8 %5.4 %8.6 %7.7 %11.9 %17.3 %9.2 %8.6 %11.1 %
Annualized Rent per Sq. Ft.$50.26$46.09$47.37$41.00$61.85$54.00$59.41$66.01$66.29$59.92$62.15
________________________
(1)For leases that have been renewed early with existing tenants, the expiration date and annualized base rent information presented takes into consideration the renewed lease terms. Excludes leases not commenced as of March 31, 2024, space leased under month-to-month leases, storage leases, vacant space and future lease renewal options not executed as of March 31, 2024.
(2)Includes 100% of annualized base rent of consolidated property partnerships.
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Stabilized Portfolio Lease Expiration Schedule by Region
($ in thousands, except for annualized rent per sq. ft.)
Year
Region# of
Expiring Leases
Total
Square Feet
% of Total
Leased Sq. Ft.
Annualized
Base Rent (1)
% of Total
Annualized
Base Rent
Annualized Rent
per Sq. Ft.
2024Los Angeles28 260,713 1.8 %$11,831 1.4 %$45.38 
San Diego39,344 0.3 %1,399 0.2 %35.56 
San Francisco Bay Area236,194 1.7 %15,739 2.0 %66.64 
Seattle153,395 1.1 %5,695 0.7 %37.13 
Austin— — — %— — %— 
Total46 689,646 4.9 %$34,664 4.3 %$50.26 
2025Los Angeles34 223,255 1.6 %$9,390 1.2 %$42.06 
San Diego17 225,358 1.6 %9,218 1.1 %40.90 
San Francisco Bay Area124,088 0.8 %8,725 1.1 %70.31 
Seattle10 140,831 1.0 %5,551 0.7 %39.42 
Austin— — — %— — %— 
Total70 713,532 5.0 %$32,884 4.1 %$46.09 
2026Los Angeles26 488,231 3.5 %$20,153 2.5 %$41.28 
San Diego162,192 1.0 %8,582 1.1 %52.91 
San Francisco Bay Area16 941,332 6.7 %49,294 6.1 %52.37 
Seattle12 405,215 2.9 %16,565 2.1 %40.88 
Austin— — — %— — %— 
Total63 1,996,970 14.1 %$94,594 11.8 %$47.37 
2027Los Angeles38 732,877 5.2 %$27,069 3.4 %$36.94 
San Diego18 171,689 1.2 %8,519 1.1 %49.62 
San Francisco Bay Area76,582 0.5 %4,922 0.5 %64.27 
Seattle10 86,543 0.6 %3,265 0.4 %37.73 
Austin— — — %— — %— 
Total71 1,067,691 7.5 %$43,775 5.4 %$41.00 
2028Los Angeles21 114,983 0.8 %$5,978 0.7 %$51.99 
San Diego12 214,134 1.5 %12,173 1.5 %56.85 
San Francisco Bay Area11 730,461 5.2 %49,244 6.2 %67.41 
Seattle61,231 0.4 %1,927 0.2 %31.47 
Austin— — — %— — %— 
Total52 1,120,809 7.9 %$69,322 8.6 %$61.85 
2029
and
Beyond
Los Angeles45 1,401,704 10.0 %$80,413 10.0 %$57.37 
San Diego57 1,609,568 11.4 %99,531 12.4 %61.84 
San Francisco Bay Area36 3,391,679 24.0 %250,073 31.1 %73.73 
Seattle24 1,617,162 11.4 %74,118 9.3 %45.83 
Austin10 536,287 3.8 %24,011 3.0 %44.77 
Total172 8,556,400 60.6 %$528,146 65.8 %$61.73 
________________________
(1)Includes 100% of annualized base rent of consolidated property partnerships.
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Top 20 Tenants
($ in thousands)  
Tenant Name (1)
Region
Annualized Base Rental Revenue (2)
Rentable
Square Feet
Percentage of
Total Annualized Base Rental Revenue
Percentage of
Total Rentable
Square Feet
Year(s) of Significant Lease Expiration(s) (3)
Weighted Average Remaining
Lease Term (Years)
Global technology companySeattle / San Diego$44,851 849,826 5.6 %5.0 %2032 - 2033 / 20379.3
Cruise LLCSan Francisco Bay Area35,449 374,618 4.4 %2.2 %20317.7
Stripe, Inc.San Francisco Bay Area33,110 425,687 4.1 %2.5 %203410.3
Salesforce, Inc. (4)
San Francisco Bay Area /
Seattle
29,981 613,497 3.7 %3.6 %2024 / 2029 - 2030 / 20324.8
LinkedIn Corporation / Microsoft Corporation (5)
San Francisco Bay Area29,752 663,460 3.7 %3.9 %2024 / 20262.2
Adobe Systems, Inc.San Francisco Bay Area /
Seattle
27,897 522,879 3.5 %3.1 %2027 / 20317.1
Okta, Inc.San Francisco Bay Area24,206 293,001 3.0 %1.7 %20284.6
DoorDash, Inc.San Francisco Bay Area23,842 236,759 3.0 %1.4 %20327.8
Netflix, Inc.Los Angeles21,854 361,388 2.7 %2.1 %20328.3
Cytokinetics, Inc.San Francisco Bay Area18,167 234,892 2.3 %1.4 %20339.6
Box, Inc.San Francisco Bay Area16,853 287,679 2.1 %1.7 %20284.3
DIRECTV, LLCLos Angeles16,085 532,956 2.0 %3.1 %2026 - 20273.4
Synopsys, Inc.San Francisco Bay Area15,492 342,891 1.9 %2.0 %20306.4
Amazon.comSeattle14,989 340,705 1.9 %2.0 %2029 - 20305.8
Neurocrine Biosciences, Inc.San Diego14,046 254,578 1.8 %1.5 %2025 / 20316.7
Riot Games, Inc. (6)
Los Angeles13,829 210,133 1.7 %1.2 %2024 / 2026 / 20313.2
Viacom International, Inc.Los Angeles13,718 220,330 1.7 %1.3 %20284.8
Indeed, Inc.Austin13,430 330,394 1.7 %1.9 %203410.8
Sony Interactive Entertainment, LLCSan Francisco Bay Area13,059 127,760 1.6 %0.7 %20306.0
Tandem Diabetes Care, Inc. San Diego12,409 143,850 1.5 %0.8 %203511.1
Total Top 20 Tenants$433,019 7,367,283 53.9 %43.1 %6.6
    
________________________
(1)Includes subsidiaries of the tenant listed.
(2)The information presented is based upon annualized base rental revenues as of March 31, 2024 and Includes 100% of annualized base rental revenues of consolidated property partnerships.
(3)We define significant lease expirations as those with space expiring greater than 25,000 rentable square feet.
(4)The 2024 lease expiration represents 140,509 rentable square feet expiring on August 31, 2024.
(5)The 2024 lease expiration represents 76,031 rentable square feet expiring on October 31, 2024.
(6)The 2024 lease expiration represents 6,411 rentable square feet expiring on July 31, 2024 and 40,236 rentable square feet expiring on November 30, 2024.
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Tenant Industry Diversification (1)


Annualized Base Rent (2)
Square Feet Leased
chart-57d953a47d29455eb2aa.jpg chart-696ab88beb8245c584ba.jpg

________________________
(1)Based on the North American Industry Classification System as of March 31, 2024.
(2)Includes 100% of annualized base rent of consolidated property partnerships.
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Consolidated Ventures (Noncontrolling Property Partnerships)

PropertyVenture PartnerSubmarketRentable
Square Feet
KRC
Ownership %
100 First Street, San Francisco, CANorges Bank Real Estate ManagementSan Francisco 480,45756%
303 Second Street, San Francisco, CANorges Bank Real Estate ManagementSan Francisco784,65856%
900 Jefferson Avenue and 900 Middlefield Road,
Redwood City, CA (1)
Local developerRedwood City347,26993%
Quarter-to-Date
Total operating revenues$30,447 
Total operating expenses8,238 
Net Operating Income - Consolidated Ventures (2)(3)
$22,209 
Adjustments:
Amortization of deferred revenue related to tenant-funded tenant improvements(934)
Net effect of straight-line rents(372)
Lease related adjustments, leasing costs and other1,870 
Other (4)
81 
Cash Net Operating Income - Consolidated Ventures (3)
$22,854 
Company's Share of Cash Net Operating Income - Consolidated Ventures (3)
$15,685 
____________________
(1)Reflects the KRC ownership percentage at time of agreement. Actual percentage may vary depending on cash flows or promote structure.
(2)For breakout of Net Operating Income by partnership, refer to page 38, Reconciliation of Net Income Available to Common Stockholders to Same Store Net Operating Income.
(3)Please refer to pages 31-33 for Management Statements on non-GAAP supplemental measures.
(4)Includes revenue reversals (recoveries) related to tenant creditworthiness.

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03
Development


In-Process Development & Redevelopment
Future Development Pipeline


Q1 2024 Supplemental Financial Report
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In-Process Development & Redevelopment
($ in millions)
UNDER CONSTRUCTIONLocationConstruction Start Date
Estimated Stabilization Date (1)
Estimated Rentable Square FeetTotal Estimated Investment
Total Cash Costs Incurred as of
3/31/2024 (2)(3)
% Leased
Office / Life Science
San Francisco Bay Area
Kilroy Oyster Point - Phase 2South San Francisco2Q 20214Q 2025875,000 $1,000 $644 —%
4400 Bohannon Drive (4)
Other Peninsula4Q 20223Q 202548,000 55 22 —%
San Diego County
4690 Executive Drive (4)
University Towne Center1Q 20222Q 202552,000 25 20 —%
TOTAL:975,000 $1,080 $686 —%
________________________
(1)For office and retail, represents the earlier of anticipated 95% occupancy date or one year from substantial completion of base building components. For multi-phase projects, interest and carry cost capitalization may cease and recommence driven by various factors, including tenant improvement construction and other tenant related timing or project scope. For projects being redeveloped, redevelopment will occur in phases based on existing lease expiration dates and timing of the tenant improvement build-out.
(2)Represents costs incurred as of March 31, 2024, excluding accrued liabilities recorded in accordance with GAAP.
(3)For redevelopment properties, includes the existing depreciated basis for the buildings to be redeveloped.
(4)Redevelopment property.

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Future Development Pipeline
($ in millions)
FUTURE DEVELOPMENT PIPELINELocation
Approx. Developable
Square Feet / Resi Units (1)
Total Cash Costs Incurred as of 3/31/2024 (2)
Los Angeles
1633 26th StreetWest Los Angeles190,000$15 
San Diego
Santa Fe Summit South / North56 Corridor600,000 - 650,000115 
2045 Pacific HighwayLittle Italy275,00055 
Kilroy East VillageEast Village1,100 units68 
San Francisco Bay Area
Kilroy Oyster Point - Phases 3 and 4South San Francisco875,000 - 1,000,000223 
Flower MartSOMA2,300,000579 
Seattle
SIX0Denny Regrade925,000 and 650 units185 
Austin
Stadium TowerStadium District / Domain493,00072 
TOTAL:$1,312 
________________________
(1)Represents developable office/life science square feet and/or residential units. The developable square feet, residential units, and scope of projects could change materially from estimated data provided due to one or more of the following: any significant changes in the economy, market conditions, our markets, tenant requirements and demands, construction costs, new supply, regulatory and entitlement processes or project design.
(2)Represents costs incurred as of March 31, 2024, excluding accrued liabilities recorded in accordance with GAAP.




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04
Debt and
Capitalization Data

Capital Structure
Debt Analysis


Q1 2024 Supplemental Financial Report
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Capital Structure
As of March 31, 2024 ($ in thousands)
Shares/Units
Aggregate Principal
Amount (1) or $
Value Equivalent
% of Total Market Capitalization
Stated Rate (2)
Maturity Date
Unsecured Debt
Revolving Credit Facility$— — %6.34 %
7/31/2028 (3)
Term Loan Facility120,000 1.3 %6.38 %
10/3/2026 (4)
Term Loan Facility200,000 2.1 %6.37 %
10/3/2027 (4)
Private Placement Senior Notes Series A due 202650,000 0.5 %4.30 %7/18/2026
Private Placement Senior Notes Series B due 2026200,000 2.1 %4.35 %10/18/2026
Private Placement Senior Notes Series A due 2027175,000 1.8 %3.35 %2/17/2027
Private Placement Senior Notes Series B due 202975,000 0.8 %3.45 %2/17/2029
Private Placement Senior Notes due 2031350,000 3.7 %4.27 %1/31/2031
Senior Notes due 2024403,712 4.3 %3.45 %12/15/2024
Senior Notes due 2025400,000 4.2 %4.38 %10/1/2025
Senior Notes due 2028400,000 4.2 %4.75 %12/15/2028
Senior Notes due 2029400,000 4.2 %4.25 %8/15/2029
Senior Notes due 2030500,000 5.3 %3.05 %2/15/2030
Senior Notes due 2032425,000 4.5 %2.50 %11/15/2032
Senior Notes due 2033450,000 4.8 %2.65 %11/15/2033
Senior Notes due 2036400,000 4.2 %6.25 %1/15/2036
$4,548,712 48.0 %4.06 %
Secured Debt (5)
12100,12200, and 12312 W. Olympic Blvd., Los Angeles$155,469 1.6 %3.57 %12/1/2026
320 Westlake Ave. N. and 321 Terry Ave. N., Seattle80,745 0.9 %4.48 %7/1/2027
One Paseo Mixed-Use Campus, San Diego375,000 4.0 %5.90 %8/10/2034
$611,214 6.5 %5.12 %
Total Debt$5,159,926 54.5 %4.19 %
Equity and Noncontrolling Interest in the Operating Partnership (6)
Common limited partnership units outstanding (7)
1,150,574$41,915 0.4 %
Shares of common stock outstanding117,366,4054,275,658 45.1 %
Total Equity and Noncontrolling Interest in the Operating Partnership$4,317,573 45.5 %
Total Market Capitalization$9,477,499 100.0 %
________________________
(1)Represents the gross aggregate principal amount due at maturity before the effect of unamortized deferred financing costs and premiums and discounts.
(2)Our unsecured revolving credit facility and unsecured term loan facilities' interest rates were calculated using the Secured Overnight Financing Rate (“SOFR”) plus a SOFR adjustment of 0.10% and a margin of 0.900% and 0.950%, respectively, based on our credit rating as of March 31, 2024. All other stated rates are fixed interest rates.
(3)Does not assume the exercise of the Company's two six-month extension options.
(4)The maturity dates of the each of the unsecured term loans assumes the exercise of the two twelve-month extensions, at the Company’s election.
(5)The mortgage notes are secured by the properties listed.
(6)Value based on closing share price of $36.43 as of March 31, 2024.
(7)Includes common units of the Operating Partnership not owned by the Company; does not include noncontrolling interests in consolidated property partnerships.
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Debt Analysis
As of March 31, 2024 ($ in thousands)
chart-5df95aaff2a54ecdb19a.jpg
Total Debt$408,238$406,246$521,317$449,125$400,000$475,000$500,000$350,000$425,000$450,000$375,000$400,000
Weighted Average
Stated Rate
3.46%4.37%4.59%4.88%4.75%4.12%3.05%4.27%2.50%2.65%5.90%—%6.25%
% of Total8%8%10%8%8%9%10%7%8%9%7%—%8%
________________________
(1)The maturity dates of the unsecured term loans assume the exercise of the two twelve-month extensions, at the Company's election.
(2)As of March 31, 2024, there was no outstanding balance on our unsecured revolving credit facility maturing on July 31, 2028, before two six-month extensions, at the Company's election.
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Debt Analysis, continued
As of March 31, 2024 ($ in thousands)
NET DEBT TO COMPANY'S SHARE OF EBITDA, AS ADJUSTED RATIOS (1)
3/31/202412/31/20239/30/20236/30/20233/31/2023
Total principal amount of debt$5,159,926 $4,961,406 $4,969,869 $4,440,610 $4,442,046 
Cash and cash equivalents(855,007)(510,163)(618,794)(361,885)(476,358)
Certificates of deposit(78,256)(256,581)(252,830)— — 
Net debt$4,226,663 $4,194,662 $4,098,245 $4,078,725 $3,965,688 
Trailing 12-months Company's share of EBITDA, as adjusted (2)
$672,267 $671,343 $673,324 $668,950 $660,112 
Trailing 12-months Company's share of EBITDA, as adjusted less interest income (2)
$637,945 $648,751 $656,196 $658,543 $653,001 
Net debt to Company's share of EBITDA, as adjusted Ratio6.3x6.2x6.1x6.1x6.0x
Net debt to Company's share of EBITDA, as adjusted less interest income Ratio6.6x6.5x6.2x6.2x6.1x
KEY DEBT COVENANTS (3)
CovenantActual Performance
as of March 31, 2024
Unsecured Credit and Term Loan Facilities and Private Placement Notes:
Total debt to total asset valueless than 60%32%
Fixed charge coverage ratiogreater than 1.5x3.3x
Unsecured debt ratiogreater than 1.67x3.18x
Unencumbered asset pool debt service coverage greater than 1.75x3.67x
Unsecured Senior Notes due 2024, 2025, 2028, 2029, 2030, 2032, 2033 and 2036:
Total debt to total asset valueless than 60%40%
Interest coveragegreater than 1.5x5.8x
Secured debt to total asset valueless than 40%5%
Unencumbered asset pool value to unsecured debtgreater than 150%274%
________________________
(1)Please refer to pages 31-33 for Management Statements on non-GAAP supplemental measures.
(2)Calculated as the sum of the Company's share of EBITDA, as adjusted for the trailing 4 quarters. Please refer to page 40 for a reconciliation of GAAP Net Income Available to Common Stockholders to the Company's Share of EBITDA, as adjusted and the Company's Share of EBITDA, as adjusted less interest income.
(3)All covenant ratio titles utilize terms and are calculated as defined in the respective debt and credit agreements.

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05
Non-GAAP Supplemental
Measures


Q1 2024 Supplemental Financial Report
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Management Statements on Non-GAAP Supplemental Measures
Included in this section are management’s statements regarding certain non-GAAP financial measures provided in this supplemental financial report and, with respect to Funds From Operations available to common stockholders and common unitholders (“FFO”), in the Company’s earnings release on May 2, 2024 and the reasons why management believes that these measures provide useful information to investors about the Company’s financial condition and results of operations.

Net Operating Income:

Management believes that Net Operating Income (“NOI”) is a useful supplemental measure of the Company’s operating performance. The Company defines NOI as follows: consolidated operating revenues (rental income and other property income) less consolidated property and related expenses (property expenses, real estate taxes and ground leases). Other real estate investment trusts (“REITs”) may use different methodologies for calculating NOI, and accordingly, the Company’s NOI may not be comparable to other REITs.

Because NOI excludes leasing costs, general and administrative expenses, interest expense, depreciation and amortization, other nonproperty income and losses, and gains and losses from property dispositions, it provides a performance measure that, when compared year over year, reflects the consolidated revenues and expenses directly associated with owning and operating commercial real estate and the impact to operations from trends in occupancy rates, rental rates, and operating costs, providing a perspective on operations not immediately apparent from net income. The Company uses NOI to evaluate its operating performance on a portfolio basis since NOI allows the Company to evaluate the impact that factors such as occupancy levels, lease structure, rental rates, and tenant base have on the Company’s results, margins and returns. In addition, management believes that NOI provides useful information to the investment community about the Company’s financial and operating performance when compared to other REITs since NOI is generally recognized as a standard measure of performance in the real estate industry.

However, NOI should not be viewed as an alternative measure of the Company’s financial performance since it does not reflect general and administrative expenses, leasing costs, interest expense, depreciation and amortization costs, other nonproperty income and losses and the level of capital expenditures necessary to maintain the operating performance of the Company’s properties, or trends in development and construction activities which are significant economic costs and activities that could materially impact the Company’s results from operations.

Same Store Net Operating Income:

Management believes that Same Store NOI is a useful supplemental measure of the Company’s operating performance. Same Store NOI represents the consolidated NOI for all of the properties that were owned and included in the Company's stabilized portfolio for two comparable reporting periods. Because Same Store NOI excludes the change in NOI from developed, redeveloped, acquired and disposed of and held for sale properties, it highlights operating trends such as occupancy levels, rental rates and operating costs on properties. Other REITs may use different methodologies for calculating Same Store NOI, and accordingly, the Company’s Same Store NOI may not be comparable to other REITs.

However, Same Store NOI should not be viewed as an alternative measure of the Company’s financial performance since it does not reflect the operations of the Company’s entire portfolio, nor does it reflect the impact of general and administrative expenses, leasing costs, interest expense, depreciation and amortization costs, other nonproperty income and losses and the level of capital expenditures necessary to maintain the operating performance of the Company’s properties, or trends in development and construction activities which are significant economic costs and activities that could materially impact the Company’s results from operations.
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Management Statements on Non-GAAP Supplemental Measures, continued
Same Store Cash Net Operating Income:

Management believes that Same Store Cash NOI is a useful supplemental measure of the Company’s operating performance. Same Store Cash NOI represents the consolidated NOI for all of the properties that were owned and included in the Company’s stabilized portfolio for two comparable reporting periods, adjusted for the net effect of straight-line rents, amortization of deferred revenue related to tenant-funded tenant improvements, amortization of above and below market lease intangibles, and the provision for bad debts. Because Same Store Cash NOI excludes the change in NOI from developed, redeveloped, acquired and disposed of and held for sale properties, it highlights operating trends on a cash basis such as occupancy levels, rental rates and operating costs on properties. Other REITs may use different methodologies for calculating Same Store Cash NOI, and accordingly, our Same Store Cash NOI may not be comparable to other REITs.

However, Same Store Cash NOI should not be viewed as an alternative measure of the Company’s financial performance since it does not reflect the operations of the Company's entire portfolio, nor does it reflect the impact of general and administrative expenses, acquisition-related expenses, interest expense, depreciation and amortization costs, other nonproperty income and losses, the level of capital expenditures and leasing costs necessary to maintain the operating performance of the Company's properties, or trends in development and construction activities which are significant economic costs and activities that could materially impact the Company's results from operations.

EBITDA, as adjusted, Company's Share of EBITDA, as adjusted, and Company's Share of EBITDA, as adjusted less interest income:

Management believes that consolidated earnings before interest expense, depreciation and amortization, gain/loss on early extinguishment of debt, gains and losses on depreciable real estate, net income attributable to noncontrolling interests, preferred dividends and distributions, original issuance costs of redeemed preferred stock and preferred units, and impairment losses (“EBITDA, as adjusted”) is a useful supplemental measure of the Company’s operating performance. When considered with other GAAP measures and FFO, management believes EBITDA, as adjusted, gives the investment community a more complete understanding of the Company’s consolidated operating results, including the impact of general and administrative expenses and acquisition-related expenses, before the impact of investing and financing transactions and facilitates comparisons with competitors. Management also believes it is appropriate to present EBITDA, as adjusted, as it is used in several of the Company’s financial covenants for both its secured and unsecured debt. However, EBITDA, as adjusted, should not be viewed as an alternative measure of the Company’s operating performance since it excludes financing costs as well as depreciation and amortization costs which are significant economic costs that could materially impact the Company’s results of operations and liquidity. Other REITs may use different methodologies for calculating EBITDA, as adjusted, and, accordingly, the Company’s EBITDA, as adjusted, may not be comparable to other REITs. The Company’s calculation of EBITDA, as adjusted, is the same as EBITDAre, as defined by Nareit, as the Company does not have any unconsolidated joint ventures. The Company’s Share of EBITDA, as adjusted, is EBITDA, as adjusted less amounts attributable to noncontrolling interests in consolidated property partnerships. The Company’s Share of EBITDA, as adjusted less interest income also deducts interest income.

Net Debt to Company's Share of EBITDA, as adjusted Ratio and Net Debt to Company's Share of EBITDA, as adjusted less interest income Ratio:

Management believes that the ratios of our principal balance of debt, less cash and cash equivalents and certificates of deposit, divided by the Company’s share of EBITDA, as adjusted, as well as the Company's share of EBITDA, as adjusted less interest income are useful supplemental measures of the level of borrowed capital being used to increase the potential return of our real estate investments and proxies for a measure we believe is used by many lenders and rating agencies to evaluate our ability to repay and service our debt obligations. We believe the ratios are beneficial disclosure to investors as supplemental means of evaluating our ability to meet obligations senior to those of our equity holders. Other REITs may use different methodologies for calculating these ratios and, accordingly, the Company’s Net Debt to Company’s Share of EBITDA, as adjusted Ratio and Net Debt to Company's Share of EBITDA, as adjusted less interest income Ratio may not be comparable to other REITs.
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Management Statements on Non-GAAP Supplemental Measures, continued
Funds From Operations:

The Company calculates Funds From Operations available to common stockholders and common unitholders (“FFO”) in accordance with the 2018 Restated White Paper on FFO approved by the Board of Governors of Nareit. The White Paper defines FFO as net income or loss (calculated in accordance with GAAP), excluding depreciation and amortization related to real estate, gains and losses from the sale of certain real estate assets, gains and losses from change in control, and impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity. The reconciling items include amounts to adjust earnings from consolidated partially-owned entities and equity in earnings of unconsolidated affiliates to FFO. Our calculation of FFO includes the amortization of deferred revenue related to tenant-funded tenant improvements and excludes the depreciation of the related tenant improvement assets. We also add back net income attributable to noncontrolling common units of the Operating Partnership because we report FFO attributable to common stockholders and common unitholders.

Management believes that FFO is a useful supplemental measure of the Company’s operating performance. The exclusion from FFO of gains and losses from the sale of operating real estate assets allows investors and analysts to readily identify the operating results of the assets that form the core of the Company’s activity and assists in comparing those operating results between periods. Also, because FFO is generally recognized as the industry standard for reporting the operations of REITs, it facilitates comparisons of operating performance to other REITs. However, other REITs may use different methodologies to calculate FFO, and accordingly, the Company’s FFO may not be comparable to all other REITs.

Implicit in historical cost accounting for real estate assets in accordance with GAAP is the assumption that the value of real estate assets diminishes predictably over time. Since real estate values have historically risen or fallen with market conditions, many industry investors and analysts have considered presentations of operating results for real estate companies using historical cost accounting alone to be insufficient. Because FFO excludes depreciation and amortization of real estate assets, management believes that FFO along with the required GAAP presentations provides a more complete measurement of the Company’s performance relative to its competitors and a more appropriate basis on which to make decisions involving operating, financing, and investing activities than the required GAAP presentations alone would provide.

However, FFO should not be viewed as an alternative measure of the Company’s operating performance since it does not reflect either depreciation and amortization costs or the level of capital expenditures and leasing costs necessary to maintain the operating performance of the Company’s properties, which are significant economic costs and could materially impact the Company’s results from operations.

Funds Available for Distribution:

Management believes that Funds Available for Distribution available to common stockholders and common unitholders (“FAD”) is a useful supplemental measure of the Company’s liquidity. The Company computes FAD by adding to FFO the non-cash amortization of deferred financing costs, debt discounts and premiums and share-based compensation awards, amortization of above (below) market rents for acquisition properties, then subtracting recurring tenant improvements, leasing commissions and capital expenditures and eliminating the net effect of straight-line rents, amortization of deferred revenue related to tenant improvements, adjusting for other lease related items and amounts of gain or loss on marketable securities related to the Company’s executive deferred compensation plan that are capitalized as development costs, and after adjustment for amounts attributable to noncontrolling interests in consolidated property partnerships. FAD provides an additional perspective on the Company’s ability to fund cash needs and make distributions to stockholders by adjusting FFO for the impact of certain cash and non-cash items, as well as adjusting FFO for recurring capital expenditures and leasing costs. Management also believes that FAD provides useful information to the investment community about the Company’s financial position as compared to other REITs since FAD is a liquidity measure used by other REITs. However, other REITs may use different methodologies for calculating FAD and, accordingly, the Company’s FAD may not be comparable to other REITs.
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06
Definitions and Reconciliations



Q1 2024 Supplemental Financial Report
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Definitions Included in Supplemental
Annualized Base Rent:
Includes the impact of straight-lining rent escalations and the amortization of free rent periods and excludes the impact of the following: amortization of deferred revenue related to tenant-funded tenant improvements, amortization of above/below market rents, amortization for lease incentives due under existing leases, and expense reimbursement revenue. Additionally, the underlying leases contain various expense structures including full service gross, modified gross and triple net. Amounts represent percentage of total portfolio annualized contractual base rental revenue.
Capital Expenditures:
Expenditures for capital improvements, tenant improvements costs (excluding tenant-funded tenant improvements), and leasing commissions.
Change in GAAP / Cash Rents (Leases Commenced):
Calculated as the change between GAAP / cash rents for new/renewed leases and the expiring GAAP / cash rents for the same space. May include leases for which re-leasing timing was impacted by the COVID-19 pandemic and restrictions intended to prevent its spread. Excludes leases for which the space was vacant when the property was acquired by the Company.
Change in GAAP / Cash Rents (Leases Executed):
Calculated as the change between GAAP / cash rents for signed leases and the expiring GAAP / cash rents for the same space. May include leases for which re-leasing timing was impacted by the COVID-19 pandemic and restrictions intended to prevent its spread. Excludes leases for which the space was vacant when the property was acquired by the Company.
Estimated Stabilization Date (Development):
Management’s estimation of the earlier of stabilized occupancy (95%) or one year from the date of the cessation of major base building construction activities for office and retail properties and upon substantial completion for residential properties.
FAD Payout Ratio:
Calculated as current-quarter dividends accrued to common stockholders and common unitholders (excluding dividend equivalents accrued to restricted stock unitholders) divided by FAD.
First Generation ("1st Gen"):
Space not yet leased at recently completed development and redevelopment properties that have been added to the stabilized portfolio. Capital expenditures for first generation space do not include expenditures for in-process development and redevelopment projects and these costs are not subtracted in our calculation of FAD.
Fixed Charge Coverage Ratio - EBITDA, as adjusted:
Calculated as EBITDA, as adjusted, divided by gross interest expense (excluding amortization of deferred debt costs and debt discounts/premiums) and current year accrued preferred dividends.
Fixed Charge Coverage Ratio - Net Income:
Calculated as net income, divided by gross interest expense (excluding amortization of deferred debt costs and debt discounts/premiums) and current year accrued preferred dividends.
FFO Payout Ratio:
Calculated as current-quarter dividends accrued to common stockholders and common unitholders (excluding dividend equivalents accrued to restricted stock unitholders) divided by FFO attributable to common stockholders and unitholders.
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Q1 2024 Supplemental Financial Report
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Definitions Included in Supplemental, continued
GAAP Effective Rate:
The rate at which interest expense is recorded for financial reporting purposes, which reflects the amortization of any discounts/premiums, excluding debt issuance costs.
Gross Lease Types:
Represents leases where the landlord is obligated to pay the tenant's proportionate share of certain operating expenses.
Interest Coverage Ratio:
Calculated as EBITDA, as adjusted, divided by gross interest expense (excluding amortization of deferred debt costs and debt discounts/premiums).
Major Repositioning:
Space for which we are incurring significant non-recurring capital expenditures to reposition and is expected to result in additional revenue generated when re-leased. Capital expenditures for this space are not subtracted in our calculation of FAD.
Net Effect of Straight-Line Rents:
Represents the straight-line rent income recognized during the period offset by cash received during the period that was applied to deferred rents receivable balances for terminated leases and the provision for bad debts recorded for deferred rent receivable balances.
Net Income Payout Ratio:
Calculated as current-quarter dividends accrued to common stockholders and common unitholders (excluding dividend equivalents accrued to restricted stock unitholders) divided by net income.
Net Leases Types:
Represents leases where the tenant is obligated to pay their proportionate share of certain operating expenses.
Net Operating Income Margins:
Calculated as net operating income divided by total revenues.
Redevelopment Properties:
Properties for which we expect to spend significant development and construction costs pursuant to a formal plan to change its use.
Retention Rates (Leases Executed):
Calculated as the percentage of space renewed by existing tenants at lease expiration or termination.
Same Store Portfolio:
Our Same Store Portfolio includes all of our properties owned and included in our stabilized portfolio for two comparable reporting periods, i.e., owned and included in our stabilized portfolio as of January 1, 2023 and still owned and included in the stabilized portfolio as of March 31, 2024. It includes our residential portfolio, which consists of our 200-unit residential tower and 193-unit Jardine project in Hollywood, California and 608 residential units at our One Paseo mixed-use project in Del Mar, California. It does not include undeveloped land, development and redevelopment properties currently committed for construction, under construction, or in the tenant improvement phase, completed residential developments not yet stabilized and properties held-for-sale. We define redevelopment properties as those projects for which we expect to spend significant development and construction costs on existing or acquired buildings pursuant to a formal plan, the intended result of which is a higher economic return on the property.

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Q1 2024 Supplemental Financial Report
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Definitions Included in Supplemental, continued
Same Store Portfolio Rollforward
Number of BuildingsSquare Feet
Same Store Portfolio as of December 31, 202311515,063,419 
Stabilized Development and Redevelopment Properties Added1,151,118 
Remeasurements— (631)
Same Store Portfolio as of March 31, 202411916,213,906
Stabilized Development and Redevelopment Properties Excluded from Same Store2829,591
Stabilized Portfolio as of March 31, 202412117,043,497

Second Generation ("2nd Gen"):
Space at properties in the stabilized portfolio for which capital expenditures are generally recurring in nature or relate to space previously occupied.
Stated Interest Rate:
The rate at which interest expense is recorded per the respective loan documents, excluding the impact of the amortization of any debt discounts/premiums.
Tenant Improvement Phase:
Represents projects that have reached cold shell condition and are ready for tenant improvements, which may require additional major base building construction before being placed in service.
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Q1 2024 Supplemental Financial Report
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Reconciliation of Net Income Available to Common Stockholders to Same Store Net Operating Income
(unaudited, $ in thousands)
 
Three Months Ended (1)
 3/31/202412/31/20239/30/20236/30/20233/31/2023
Net Income Available to Common Stockholders$49,920 $47,284 $52,762 $55,587 $56,608 
Net income attributable to noncontrolling common units of the Operating Partnership502 471 515 537 560 
Net income attributable to noncontrolling interests in consolidated property partnerships5,278 5,291 5,460 5,151 8,062 
Net Income55,700 53,046 58,737 61,275 65,230 
Adjustments:
General and administrative expenses17,579 22,078 24,761 22,659 23,936 
Leasing costs2,279 1,956 1,852 1,326 1,372 
Depreciation and amortization88,031 86,016 85,224 90,362 93,676 
Interest income(13,190)(10,696)(7,015)(3,421)(1,460)
Interest expense38,871 32,325 29,837 26,383 25,671 
Net Operating Income, as defined (2)
189,270 184,725 193,396 198,584 208,425 
Wholly-Owned Properties167,061 162,348 170,492 176,582 179,500 
Consolidated property partnerships: (3)
100 First Street (4)
5,958 6,561 6,782 6,075 6,011 
303 Second Street (4)
10,794 10,099 10,243 9,706 17,247 
Crossing/900 (5)
5,457 5,717 5,879 6,221 5,667 
Net Operating Income, as defined (2)
189,270 184,725 193,396 198,584 208,425 
Non-Same Store Net Operating Income (6)
(6,578)(20,892)(21,052)(21,127)(19,909)
Same Store Net Operating Income182,692 163,833 172,344 177,457 188,516 
Adjustments:
Amortization of deferred revenue related to tenant-funded tenant improvements(6,190)(5,215)(4,384)(4,461)(4,517)
Net effect of straight-line rents5,443 8,140 617 (1,992)(1,471)
Amortization of net below market rents(353)(422)(483)(1,057)(2,305)
Lease related adjustments(194)2,236 (805)(3,374)5,679 
Other (7)
(1,147)1,144 432 1,003 436 
Same Store Cash Net Operating Income$180,251 $169,716 $167,721 $167,576 $186,338 
 
________________________
(1)The Same Store Portfolio was comprised of 119 properties during the three months ended March 31, 2024. For all quarterly periods in 2023, the Same Store Portfolio was comprised of 115 properties.
(2)Please refer to page 31-33 for a Management Statements on non-GAAP supplemental measures.
(3)Reflects Net Operating Income for all periods presented.
(4)For all periods presented, an unrelated third party entity owned approximately 44% common equity interests in two properties located at 100 First Street and 303 Second Street in San Francisco, CA.
(5)For all periods presented, an unrelated third party entity owned an approximate 7% common equity interest in two properties located at 900 Jefferson Avenue and 900 Middlefield Road in Redwood City, CA.
(6)Includes the results of one office development building added to the stabilized portfolio during the third quarter of 2023, one office development building added to the stabilized portfolio during the fourth quarter of 2023 and our in-process and future development projects.
(7)Includes revenue reversals (recoveries) related to tenant creditworthiness and other.



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Q1 2024 Supplemental Financial Report
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Reconciliation of Net Income Available to Common Stockholders to Same Store Net Operating Income, continued
(unaudited, $ in thousands)
 
Three Months Ended (1)
 12/31/20229/30/20226/30/20223/31/2022
Net Income Available to Common Stockholders$52,625 $79,757 $47,105 $53,128 
Net income attributable to noncontrolling common units of the Operating Partnership588 664 515 516 
Net income attributable to noncontrolling interests in consolidated property partnerships6,262 6,239 6,355 5,739 
Net Income59,475 86,660 53,975 59,383 
Adjustments:
General and administrative expenses25,217 23,524 22,120 22,781 
Leasing costs1,404 1,015 1,447 1,013 
Depreciation and amortization91,396 81,140 96,415 88,660 
Interest income(1,264)(295)(125)(81)
Interest expense23,550 19,982 20,121 20,625 
Gain on sale of depreciable operating property— (17,329)— — 
Net Operating Income, as defined (2)
199,778 194,697 193,953 192,381 
Wholly-Owned Properties174,983 170,166 168,721 168,431 
Consolidated property partnerships: (3)
100 First Street (4)
6,116 5,791 5,745 5,922 
303 Second Street (4)
12,702 12,941 13,333 12,000 
Crossing/900 (5)
5,977 5,799 6,154 6,028 
Net Operating Income, as defined (2)
199,778 194,697 193,953 192,381 
Non-Same Store Net Operating Income (6)
(16,435)(13,335)(12,239)(10,440)
Same Store Net Operating Income183,343 181,362 181,714 181,941 
Adjustments:
Amortization of deferred revenue related to tenant-funded tenant improvements(4,607)(4,646)(4,631)(4,009)
Net effect of straight-line rents(3,689)(6,992)(12,183)(15,730)
Amortization of net below market rents(2,287)(2,520)(2,720)(2,872)
Lease related adjustments(2,010)(194)401 706 
Other (7)
1,008 400 530 151 
Same Store Cash Net Operating Income$171,758 $167,410 $163,111 $160,187 
________________________
(1)Same Store Portfolio as of the comparative 2023 period. For all quarterly periods, the Same Store Portfolio was comprised of 115 properties.
(2)Please refer to page 31-33 for a Management Statements on non-GAAP supplemental measures.
(3)Reflects Net Operating Income for all periods presented.
(4)For all periods presented, an unrelated third party entity owned approximately 44% common equity interests in two properties located at 100 First Street and 303 Second Street in San Francisco, CA.
(5)For all periods presented, an unrelated third party entity owned an approximate 7% common equity interest in two properties located at 900 Jefferson Avenue and 900 Middlefield Road in Redwood City.
(6)Includes the results of one office development building added to the stabilized portfolio during the fourth quarter of 2023 and our in-process and future development projects.
(7)Includes revenue reversals (recoveries) related to tenant creditworthiness and other.
39

Q1 2024 Supplemental Financial Report
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Reconciliation of Net Income Available to Common Stockholders to Company's Share of EBITDA, as adjusted
(unaudited, $ in thousands)

 Three Months Ended
 3/31/202412/31/20239/30/20236/30/20233/31/2023
Net Income Available to Common Stockholders$49,920 $47,284 $52,762 $55,587 $56,608 
Interest expense38,871 32,325 29,837 26,383 25,671 
Depreciation and amortization88,031 86,016 85,224 90,362 93,676 
Net income attributable to noncontrolling common units of the Operating Partnership502 471 515 537 560 
Net income attributable to noncontrolling interests in consolidated property partnerships5,278 5,291 5,460 5,151 8,062 
EBITDA, as adjusted (1)
182,602 171,387 173,798 178,020 184,577 
EBITDA, as adjusted (1), attributable to noncontrolling interests in consolidated property partnerships
(8,660)(8,328)(8,390)(8,162)(11,559)
Company's share of EBITDA, as adjusted (1)
$173,942 $163,059 $165,408 $169,858 $173,018 
Interest income(13,190)(10,696)(7,015)(3,421)(1,460)
Company's share of EBITDA, as adjusted less interest income (1)
$160,752 $152,363 $158,393 $166,437 $171,558 
________________________
(1)Please refer to pages 31-33 for Management Statements on non-GAAP supplemental measures.

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Q1 2024 Supplemental Financial Report
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Reconciliation of GAAP Net Cash Provided by Operating Activities to Funds Available for Distribution
(unaudited, $ in thousands)
 Three Months Ended
 3/31/202412/31/20239/30/20236/30/20233/31/2023
GAAP Net Cash Provided by Operating Activities
$167,869 $110,223 $208,816 $101,414 $182,136 
Adjustments:
Recurring tenant improvements, leasing commissions and capital expenditures(11,763)(31,411)(20,519)(17,850)(17,766)
Depreciation of non-real estate furniture, fixtures and equipment(1,571)(1,614)(1,706)(1,889)(2,005)
Net changes in operating assets and liabilities (1)
(21,554)39,064 (58,450)41,727 (20,525)
Noncontrolling interests in consolidated property partnerships share of FFO and FAD
(7,553)(6,705)(6,246)(6,981)(9,625)
Cash adjustments related to investing and financing activities(100)(29)(3,197)3,125 318 
Funds Available for Distribution (2)
$125,328 $109,528 $118,698 $119,546 $132,533 
_______________________
(1)Primarily includes changes in the following assets and liabilities: marketable securities, current receivables, prepaid expenses and other assets, accounts payable, accrued expenses and other liabilities, and rents received in advance and tenant security deposits. 
(2)Please refer to page 31-33 for Management Statements on non-GAAP supplemental measures.

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