8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): March 6, 2024

KILROY REALTY CORPORATION

KILROY REALTY, L.P.

(Exact name of registrant as specified in its charter)

Kilroy Realty Corporation	Maryland	001-12675	95-4598246
	(State or other jurisdiction of incorporation or organization)	(Commission File No.)	(I.R.S. Employer Identification No.)
Kilroy Realty, L.P.	Delaware	000-54005	95-4612685
	(State or other jurisdiction of incorporation or organization)	(Commission File No.)	(I.R.S. Employer Identification No.)

12200 W. Olympic Boulevard, Suite 200, Los Angeles, California, 90064

(Address of principal executive offices) (Zip Code)

(310) 481-8400

(Registrant's telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:
Registrant	Title of each class	Name of each exchange on which registered	Ticker Symbol
Kilroy Realty Corporation	Common Stock, $.01 par value	New York Stock Exchange	KRC

Securities registered pursuant to Section 12(g) of the Act:
Registrant	Title of each class
Kilroy Realty, L.P.	Common Units Representing Limited Partnership Interests

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2.):

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Kilroy Realty Corporation:

Emerging growth company ☐

Kilroy Realty, L.P.:

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Kilroy Realty Corporation ☐ Kilroy Realty, L.P. ☐

ITEM 1.01    ENTRY INTO A MATERIAL AGREEMENT

Revolving Credit Facility

On March 6, 2024, Kilroy Realty, L.P. (the “Operating Partnership”), as borrower, entered into a fourth amended and restated credit agreement (the “Credit Agreement”) with JPMorgan Chase Bank, N.A., as administrative agent and a lender, and certain other financial institutions party thereto as lenders, which amends and restates and replaces in its entirety that certain third amended and restated credit agreement, dated as of April 20, 2021, by and among the Operating Partnership, JPMorgan Chase Bank, N.A., as administrative agent and a lender, and the other lenders named therein.

The Credit Agreement provides for a senior unsecured revolving credit facility (the “Credit Facility”) that permits borrowings of up to $1.1 billion, subject to the satisfaction of certain customary conditions. The Credit Facility also includes an accordion feature to increase the revolving commitments or add one or more tranches of term loans up to an aggregate amount of $1.6 billion, subject to obtaining lender commitments and the satisfaction of certain customary conditions. The Operating Partnership expects to use the Credit Facility for general corporate purposes, including funding acquisition, development and redevelopment projects, and repaying debt. The Credit Facility matures on July 31, 2028, which date may be extended by the Operating Partnership by six months on up to two occasions subject to the satisfaction of certain conditions, including payment by the Operating Partnership of an extension fee that is equal to 6.25 basis points of the then-outstanding revolving commitments under the Credit Facility that are the subject of each such extension. The Credit Facility is guaranteed by Kilroy Realty Corporation (the “Company”).

The Credit Facility provides that the revolving loans thereunder will bear interest at floating rates, at the Operating Partnership’s option, equal to either (x) a term secured overnight financing rate (“SOFR”) plus a credit spread adjustment of 0.10% per annum and an applicable margin ranging from 0.725% to 1.450% per annum, (y) a daily effective SOFR rate plus a credit spread adjustment of 0.10% per annum and an applicable margin ranging from 0.725% to 1.450% per annum and (z) a base rate plus an applicable margin ranging from 0.000% to 0.450% per annum, in each case, with such applicable margin depending on the Operating Partnership’s credit rating. The Operating Partnership is also obligated to pay a facility fee on the aggregate revolving commitments under the Credit Facility ranging from 12.5 basis points to 30 basis points depending on the Operating Partnership’s credit rating. In addition, the Credit Facility also features a sustainability-linked pricing component whereby the pricing can improve by 0.01% if the Operating Partnership meets certain sustainability performance targets.

The Operating Partnership is required to comply with the following financial covenants under the Credit Facility:

•Maximum total debt to total asset value ratio of no greater than 60%, except during certain limited periods of time following a material acquisition, during which time such ratio shall not be greater than 65%;

•Ratio of adjusted EBITDA to fixed charges of not less than 1.50x;

•Maximum secured debt to total asset value ratio of not greater than 40%;

•Ratio of unencumbered asset pool properties value to unsecured debt of not less than 1.67x, except during certain limited periods of time following a material acquisition, during which time such ratio shall not be less than 1.55x; and

•Ratio of unencumbered asset pool property net operating cash flow to unsecured debt service of not less than 1.75x.

The Operating Partnership may voluntarily prepay loans and terminate revolving commitments under the Credit Agreement in whole or in part at any time, subject to certain notice requirements.

The Credit Facility contains customary affirmative and negative covenants that, among other things, limit the ability of the Company to, upon the occurrence and continuance of an event of default, pay dividends and enter into certain transactions. A breach of such covenants (after notice and cure periods in certain circumstances) or any other event of default would entitle the administrative agent to accelerate the Operating Partnership’s debt obligations.

In connection with the Credit Facility, the Company entered into a fourth amended and restated guaranty (the “Credit Facility Guaranty”) pursuant to which it has absolutely, irrevocably and unconditionally guaranteed to the administrative agent under the Credit Facility for the benefit of the lenders party to the Credit Facility, the payment and performance of the obligations of the Operating Partnership under the Credit Facility as and when due and payable.

The foregoing descriptions of the Credit Facility and the Credit Facility Guaranty are only summaries and are qualified in their entirety by reference to the full text of the Credit Facility and the Credit Facility Guaranty, copies of which will be filed as exhibits to the Company’s and the Operating Partnership’s Quarterly Report on Form 10-Q for the quarter ending March 31, 2024.

Term Loan Facility

On March 6, 2024, the Operating Partnership, as borrower, entered into a term loan agreement (the “Term Loan Agreement”) with JPMorgan Chase Bank, N.A., as administrative agent and a lender, and certain other financial institutions party thereto as lenders. The Term Loan Agreement provides for a $200 million senior unsecured term loan facility (the “Term Loan Facility”), the full amount of which was borrowed at closing. The Term Loan Facility also includes an accordion feature to increase the term loan commitments or add one or more tranches of term loans up to an aggregate amount of $330 million, subject to obtaining lender commitments and the satisfaction of certain customary conditions. The Term Loan Facility is guaranteed by the Company.

The Term Loan Facility provides that the term loans thereunder will bear interest at floating rates, at the Operating Partnership’s option, equal to either (x) a term SOFR-based rate option plus a credit spread adjustment of 0.10% per annum and an applicable margin ranging from 0.80% to 1.60% per annum, and (y) a base rate interest rate option plus an applicable margin ranging from 0.00% to 0.60% per annum, in each case, with such applicable margin depending on the Operating Partnership’s credit rating.

The Operating Partnership may voluntarily prepay loans under the Term Loan Agreement in whole or in part at any time, subject to certain notice requirements. Amounts borrowed under the Term Loan Facility that are repaid or prepaid may not be reborrowed.

The Operating Partnership is required to comply with the following financial covenants under the Term Loan Facility:

•Maximum total debt to total asset value ratio of no greater than 60%, except during certain limited periods of time following a material acquisition, during which time such ratio shall not be greater than 65%;

•Ratio of adjusted EBITDA to fixed charges of not less than 1.50x;

•Maximum secured debt to total asset value ratio of not greater than 40%;

•Ratio of unencumbered asset pool properties value to unsecured debt of not less than 1.67x, except during certain limited periods of time following a material acquisition, during which time such ratio shall not be less than 1.55x; and

•Ratio of unencumbered asset pool property net operating cash flow to unsecured debt service of not less than 1.75x.

The Term Loan Facility provides for borrowings in U.S. dollars. The proceeds of the Term Loan Facility were used to pay down outstanding term loans under the Operating Partnership’s existing term loan facility pursuant to its term loan agreement, dated October 3, 2022 (as amended, the “Existing Term Loan Agreement”). The Term Loan Facility has a final maturity date of October 3, 2027, which date reflects the exercise of two one-year extension options that may be exercised by the Operating Partnership (subject to the satisfaction of certain conditions); provided, that the Operating Partnership must pay an extension fee that is equal to 12.5 basis points of the then-outstanding principal amount of the term loans for the first extension and an extension fee that is equal to 15 basis points of the then-outstanding principal amount of the term loans for the second extension.

The Term Loan Agreement contains customary affirmative and negative covenants that, among other things, limit the ability of the Company to, upon the occurrence and continuance of an event of default, pay dividends and enter into certain transactions. A breach of such covenants (after notice and cure periods in certain circumstances) or any other event of default would entitle the administrative agent to accelerate the Operating Partnership’s debt obligations.

In connection with the Term Loan Facility, the Company entered into a guaranty (the “Term Loan Guaranty”) pursuant to which it has absolutely, irrevocably and unconditionally guaranteed to the administrative agent under the Term Loan Facility for the benefit of the lenders party to the Term Loan Facility, the payment and performance of the obligations of the Operating Partnership under the Term Loan Facility as and when due and payable.

The foregoing descriptions of the Term Loan Agreement and the Term Loan Guaranty are only summaries and are qualified in their entirety by reference to the full text of the Term Loan Agreement and the Term Loan Guaranty, copies of which will be filed as exhibits to the Company’s and the Operating Partnership’s Quarterly Report on Form 10-Q for the quarter ending March 31, 2024.

Existing Term Loan Facility

In connection with the transactions described above, the Operating Partnership will also amend (the “Amendment”) the Existing Term Loan Agreement to substantially conform the terms of the Existing Term Loan Agreement to the terms of the Term Loan Agreement. The foregoing description of the Amendment is only a summary and is qualified in its entirety by reference to the

full text of the Amendment, a copy of which will be filed as an exhibit to the Company’s and the Operating Partnership’s Quarterly Report on Form 10-Q for the quarter ending March 31, 2024.

ITEM 2.03    CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT

The information set forth in Item 1.01 is incorporated herein by reference.

ITEM 7.01    REGULATION FD DISCLOSURE

On March 6, 2024, the Company issued a press release announcing its entry into the Credit Facility and the Term Loan Agreement. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

The information included in this Current Report on Form 8-K under this Item 7.01 (including Exhibit 99.1) shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any filing made by the Company or the Operating Partnership under the Exchange Act or the Securities Act of 1933, as amended (the “Securities Act”), except as shall be expressly set forth by specific reference in such a filing.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

(d) Exhibits.

99.1*	Press Release dated March 6, 2024.
104	Cover Page Interactive Data File (embedded within the Inline XBRL document).

_______________

*    Furnished herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Kilroy Realty Corporation
Date: March 6, 2024
	By:	/s/ Merryl E. Werber
		Merryl E. Werber Senior Vice President, Chief Accounting Officer and Controller

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Kilroy Realty, L.P.
Date: March 6, 2024
	By:	Kilroy Realty Corporation,
		Its general partner
	By:	/s/ Merryl E. Werber
		Merryl E. Werber Senior Vice President, Chief Accounting Officer and Controller

EX-99.1

Exhibit 99.1

Contact:	FOR RELEASE:
Eliott Trencher	March 6, 2024
Executive Vice President,
Chief Financial Officer
and Chief Investment Officer
(310) 481-8587
or
Taylor Friend
Senior Vice President, Treasurer
(310) 481-8574

KILROY REALTY RECASTS ITS $1.1 BILLION SUSTAINABILITY-LINKED

UNSECURED REVOLVING CREDIT FACILITY

LOS ANGELES, CA – March 6, 2024 — Kilroy Realty Corporation (NYSE: KRC) (the “Company”), today announced that its operating partnership, Kilroy Realty, L.P. (the “Borrower”), has closed on an amended and restated senior unsecured revolving credit facility that permits borrowings of up to $1.1 billion (the “Revolving Credit Facility”). The term of the Revolving Credit Facility was extended three years and goes through July 31, 2028 before extension options.

“We are extremely pleased to announce the recast of our revolving credit facility, which has allowed us to extend the maturity of the facility by three years, while maintaining total available borrowing capacity,” stated Angela Aman, Chief Executive Officer of the Company. “Our strong banking partnerships continue to provide Kilroy with robust liquidity and financial flexibility as we look to capture outsized growth opportunities and create value for all stakeholders.”

The Revolving Credit Facility also features a sustainability-linked pricing component whereby the pricing can improve by 1 basis point per annum if the Borrower meets certain sustainability performance targets as verified by an independent third-party. Additionally, the Borrower may elect to borrow, subject to additional lender commitments and the satisfaction of certain conditions, up to an additional $500 million under the Revolving Credit Facility pursuant to an accordion feature. The Borrower expects to use the Revolving Credit Facility for general corporate purposes, including funding acquisition, development and redevelopment projects, and repaying debt.

Revolving Credit Facility Key Terms Overview

	Amended and Restated Revolving Credit Facility	Old Revolving Credit Facility
Amount	$1.1B	$1.1B
SOFR Borrowing Spread (1)	90 bps	90 bps
SOFR Credit Spread Adjustment	10 bps	10 bps
Annual Facility Fee (1)	20 bps	20 bps
Maturity Date before Extension Options	July 31, 2028	July 31, 2025
Extension Options	Two 6-Month	Two 6-Month

(1)The borrowing spread and facility fee are variable and subject to a ratings-based pricing grid based on the Borrower’s credit rating.

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The Revolving Credit Facility was syndicated to a group of twelve U.S. and international banks led by JPMorgan Chase Bank, N.A., BofA Securities, Inc., Wells Fargo Securities, LLC, PNC Capital Markets LLC, and U.S. Bank National Association, which acted as joint lead arrangers and joint bookrunners. JPMorgan Chase Bank, N.A. is the administrative agent for the Revolving Credit Facility and Bank of America, N.A. is the syndication agent. BMO Capital Markets Corp., The Bank of Nova Scotia, and Sumitomo Mitsui Banking Corporation acted as joint lead arrangers. Wells Fargo Bank, N.A., PNC Bank, National Association, U.S. Bank National Association, Barclays Bank PLC, BMO Bank, N.A., Sumitomo Mitsui Banking Corporation, and The Bank of Nova Scotia acted as co-documentation agents. Other participants in the Revolving Credit Facility include KeyBank National Association, The Bank of New York Mellon, and Associated Bank, National Association. J.P. Morgan Securities LLC and BofA Securities, Inc. acted as sustainability structuring agents.

In addition, the Company paid down its existing $520 million senior unsecured term loan facility (the “Existing Term Loan Facility”) by $200 million and extended the final maturity on an aggregate principal amount of $200 million of the remaining $320 million by 12 months to October 3, 2027, inclusive of exercising its two one-year extension options (the “New Term Loan Facility”). The borrowing rate under the New Term Loan Facility is variable and subject to a ratings-based pricing grid, currently calculated as one-month Adjusted Secured Overnight Financing Rate (“SOFR”) plus 95-basis points, unchanged from the prior rate. The New Term Loan Facility was syndicated to a group of twelve U.S. and international banks led by JPMorgan Chase Bank, N.A., BofA Securities, Inc., Wells Fargo Securities, LLC, PNC Capital Markets LLC, U.S. Bank National Association, and The Bank of Nova Scotia, which acted as joint lead arrangers and joint bookrunners.

About Kilroy Realty Corporation

Kilroy Realty Corporation (NYSE: KRC, the “Company”, “Kilroy”) is a leading U.S. landlord and developer, with operations in San Diego, Greater Los Angeles, the San Francisco Bay Area, Greater Seattle and Austin. The Company has earned global recognition for sustainability, building operations, innovation and design. As a pioneer and innovator in the creation of a more sustainable real estate industry, the Company’s approach to modern business environments helps drive creativity and productivity for some of the world’s leading technology, entertainment, life science and business services companies.

The Company is a publicly traded real estate investment trust (“REIT”) and member of the S&P MidCap 400 Index with more than seven decades of experience developing, acquiring and managing office, life science and mixed-use projects. As of December 31, 2023, Kilroy’s stabilized portfolio totaled approximately 17.0 million square feet of primarily office and life science space that was 85.0% occupied and 86.4% leased. The Company also had approximately 1,000 residential units in Hollywood and San Diego, which had a quarterly average occupancy of 92.5%. In addition, the Company had two in-process life science redevelopment projects totaling approximately 100,000 square feet with total estimated redevelopment costs of $80.0 million and one approximately 875,000 square foot in-process development project with a total estimated investment of $1.0 billion.

A Leader in Sustainability and Commitment to Corporate Social Responsibility

Kilroy has a longstanding commitment to sustainability and continues to be a recognized leader in our sector. For over a decade, the Company and its sustainability initiatives have been recognized with numerous honors, including being listed on the Dow Jones Sustainability World Index, earning the GRESB five star rating and being named a sector and regional leader in the Americas. Other honors have included the Nareit Leader in the Light Award, being named ENERGY STAR Partner of the Year and receiving the ENERGY STAR highest honor of Sustained Excellence.

Kilroy is proud to have achieved carbon neutral operations across our portfolio since 2020. The Company also has a longstanding commitment to maintain high levels of LEED, Fitwel and ENERGY STAR certifications across the portfolio.

A significant part of the Company’s foundation is its commitment to enhancing employee growth, satisfaction and wellness while maintaining a diverse and thriving culture. For the fifth year in a row, the Company has been named to Bloomberg’s Gender Equality Index, which recognizes companies committed to supporting gender equality through policy development, representation, and transparency.

More information is available athttp://www.kilroyrealty.com.

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Forward-Looking Statements

This press release 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. Forward-looking statements are based on our 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 our 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 the 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; 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 our business and financial performance, see the factors included under the caption “Risk Factors” in our annual report on Form 10-K for the year ended December 31, 2023 and our 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. We assume no obligation to update any forward-looking statement made in this press release 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.

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XML

Cover Page Cover Page	Mar. 06, 2024
Entity Information [Line Items]
Document Type	8-K
Document Period End Date	Mar. 06, 2024
Entity Registrant Name	KILROY REALTY CORP
Entity Incorporation, State or Country Code	MD
Entity File Number	001-12675
Entity Tax Identification Number	95-4598246
Entity Central Index Key	0001025996
Amendment Flag	false
Entity Address, Address Line One	12200 W. Olympic Boulevard
Entity Address, Address Line Two	Suite 200
Entity Address, City or Town	Los Angeles
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	90064
City Area Code	310
Local Phone Number	481-8400
Title of 12(b) Security	Common Stock, $.01 par value
Security Exchange Name	NYSE
Trading Symbol	KRC
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false
Kilroy Realty L.P. [Member]
Entity Information [Line Items]
Entity Registrant Name	KILROY REALTY, L.P.
Entity Incorporation, State or Country Code	DE
Entity File Number	000-54005
Entity Tax Identification Number	95-4612685
Entity Central Index Key	0001493976
Title of 12(g) Security	Common Units Representing Limited Partnership Interests
Entity Emerging Growth Company	false