Commitments and Contingencies (Tables)

9 Months Ended

Sep. 30, 2021

Commitments and Contingencies Disclosure [Abstract]

Schedule of contractual expiration dates for ground leases

The following table summarizes our properties that are held subject to long-term noncancellable ground lease obligations as of September 30, 2021 and the respective contractual expiration dates:

Property	Contractual Expiration Date (1)
701, 801 and 837 N. 34th Street, Seattle, WA (2)	December 2041
1701 Page Mill Road and 3150 Porter Drive, Palo Alto, CA	December 2067
Kilroy Airport Center Phases I, II, and III, Long Beach, CA	July 2084
3243 S. La Cienega Boulevard, Los Angeles, CA	October 2106
200 W. 6th St. Austin, TX (3)	December 2112

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(1)    Reflects the contractual expiration date prior to the impact of any extension or purchase options held by the Company.

(2)    The Company has three 10-year and one 45-year extension options for this ground lease, which if exercised would extend the expiration date to December 2116. These extension options are not assumed to be exercised in our calculation of the present value of the future minimum lease payments for this lease.

(3)    We entered into this ground lease in connection with a development property acquisition in June 2021. Refer to Note 2 “Acquisitions” for additional information.

Schedule of future minimum rental repayments for ground leases

The minimum commitment under our ground leases as of September 30, 2021 for future periods is summarized as follows:

Year Ending	(in thousands)
Remaining 2021	$	1,602
2022	6,441
2023	6,496
2024	6,531
2025	6,567
2026	6,604
Thereafter	373,943
Total undiscounted cash flows (1)(2)(3)(4)(5)(6)	408,184
Present value discount	(282,508)
Ground lease liabilities	$	125,676

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(1)Excludes contingent future rent payments based on gross income or adjusted gross income and reflects the minimum ground lease obligations before the impact of ground lease extension options.

(2)One of our ground lease obligations is subject to a fair market value adjustment every five years; however, the lease includes ground rent subprotection and infrastructure rent credits, which currently limit our annual rental obligations to $1.0 million. The contractual obligations for that ground lease included above assumes the lesser of $1.0 million or annual lease rental obligation in effect as of September 30, 2021.

(3)One of our ground lease obligations is subject to a fair market value adjustment every five years based on a combination of CPI adjustments and third-party appraisals limited to maximum increases annually. The contractual obligations for that lease included above assume the current annual ground lease obligation in effect at September 30, 2021 for the remainder of the lease term since we cannot predict future adjustments.

(4)One of our ground lease obligations includes a component that is based on the percentage of adjusted gross income that exceeds the minimum ground rent. The minimum rent is subject to increases every ten years by an amount equal to 60% of the average annual percentage rent for the previous three years. The contractual obligations for this lease included above assume the current annual ground lease obligation in effect at September 30, 2021 for the remainder of the lease term since we cannot predict future adjustments.

(5)One of our ground lease obligations is subject to fixed 5% ground rent increases every five years, with the next increase occurring on December 1, 2022.

(6)One of our ground lease obligations is subject to fixed 2% ground rent increases every year, with ground rent resets occurring every ten years based on CPI. The contractual obligations for that lease included above assume increases for the remaining current ten-year period based on the current annual ground lease obligation in effect at September 30, 2021 and no subsequent changes for the remainder of the lease term since we cannot predict future CPI adjustments.