Kilroy Realty Corporation (NYSE: KRC) today reported
financial results for its first quarter ended March 31, 2021.
COVID-19 Pandemic Key Business
Update
Operations
- Collected 96% of contractual first quarter rent billings across
all property types, including 98% from office and life science
tenants
- The collection rate for April across all property types was
95%, including 97% from office and life science tenants, as of the
date of this release
- Limited lease expiration exposure with an average of
approximately 6.7% of total rentable square feet expiring per year
through 2025
Balance Sheet / Liquidity Highlights
- As of the date of this release, the company had approximately
$2.6 billion of total liquidity comprised of approximately $500.0
million of cash and cash equivalents, $1.0 billion of restricted
cash and full availability under the recently amended $1.1 billion
unsecured revolving credit facility
- No significant debt maturities until 2023
- Weighted average debt maturity of approximately 7.0 years
Development
- $1.5 billion of projects under development
- 88% leased across office and life science space
- As of the date of this release, all in-process projects were
under active construction
- Remaining spending to complete the projects of approximately
$350.0 million, fully funded with cash and cash equivalents
First Quarter Highlights
Financial Results
- Net income available to common stockholders per share of $4.26,
including a $3.92 per share gain on sale of an operating
property
- Funds from operations available to common stockholders and
unitholders (“FFO”) per share of $0.98
- Both net income available to common stockholders per share and
FFO per share included a $0.01 per share charge primarily due to
residential and office tenant creditworthiness as a result of the
COVID-19 pandemic
- Revenues increased to $235.6 million, including the charge
noted above
Stabilized Portfolio
- Stabilized portfolio was 91.5% occupied and 93.3% leased at
March 31, 2021
- Signed approximately 206,000 square feet of new or renewing
leases
- GAAP and cash rents increased approximately 15.4% and 4.9%,
respectively, from prior levels
Dispositions
- On March 30, completed the sale of The Exchange on 16th, an
approximately 750,000 square foot operating property in San
Francisco’s Mission Bay neighborhood for gross proceeds of $1.08
billion, or approximately $1,440 per square foot, and a GAAP gain
on sale of an operating property of $457.3 million
Development
- In January, completed construction on and added 9455 Towne
Centre Drive, an approximately 160,000 square foot office
development project located in the University Towne Center
submarket of San Diego, to the stabilized portfolio. The project is
100% leased to a Fortune 50 company
- In March, transferred Kilroy Oyster Point - Phase 1, an
approximately 656,000 square foot life science development project
in South San Francisco, from the under construction phase to the
tenant improvement phase. Phase 1 is 100% leased to two
tenants
Recent Developments
- In April, Kilroy Realty, L.P., (“Borrower”) the company’s
operating partnership, amended and restated its unsecured revolving
credit facility (the “Credit Facility”). The new
sustainability-linked Credit Facility includes an increase in size
from $750.0 million to $1.1 billion, a reduction in borrowing costs
and an extension of the maturity date to July 31, 2025 with two
six-month extension options
- The Credit Facility now bears interest at LIBOR plus
0.900%
- The Credit Facility also features a sustainability-linked
pricing component whereby the pricing can improve if the Borrower
meets certain sustainability performance targets
- In April, completed construction on Jardine, the 193-unit
residential project in the Hollywood submarket of Los Angeles
Results for the Quarter Ended March 31, 2021
For the first quarter ended March 31, 2021, KRC reported net
income available to common stockholders of $497.6 million, or $4.26
per share, including a $3.92 per share gain on sale of an operating
property, compared to $39.8 million, or $0.37 per share, in the
first quarter of 2020. FFO in the first quarter of 2021 was $116.2
million, or $0.98 per share, compared to $110.2 million, or $1.00
per share, in the first quarter of 2020. Current period net income
available to common stockholders and FFO per share included a $0.01
per share charge primarily due to residential and office tenant
creditworthiness related to the COVID-19 pandemic.
All per share amounts in this report are presented on a diluted
basis.
Net Income Available to Common Stockholders / FFO Guidance
and Outlook
The company is providing a guidance range of NAREIT-defined FFO
per diluted share for its second quarter 2021 of $0.80 to $0.86 per
share, with a midpoint of $0.83 per share.
Second Quarter 2021
Range
at March 31, 2021
Low End
High End
Net income available to common
stockholders per share - diluted
$
0.28
$
0.34
Weighted average common shares outstanding
- diluted (1)
117,600
117,600
Net income available to common
stockholders
$
33,000
$
40,000
Adjustments:
Net income attributable to noncontrolling
common units of the Operating Partnership
450
650
Net income attributable to noncontrolling
interests in consolidated property partnerships
5,000
6,000
Depreciation and amortization of real
estate assets
65,000
65,000
Gains on sales of depreciable real
estate
—
—
Funds From Operations attributable to
noncontrolling interests in consolidated property partnerships
(8,500
)
(9,500
)
Funds From Operations (2)
$
94,950
$
102,150
Weighted average common shares/units
outstanding – diluted (3)
118,800
118,800
Funds From Operations per common
share/unit – diluted (3)
$
0.80
$
0.86
Key 2Q 2021 assumptions include:
- Same Store Cash NOI growth of 1.0% to 2.0% (4)
- Quarter-end occupancy of 91.3% to 91.5%
- Total development spending of approximately $100.0 million to
$125.0 million
- No acquisitions or dispositions assumed
________________________
(1)
Calculated based on estimated weighted
average shares outstanding including non-participating share-based
awards.
(2)
See management statement for Funds From
Operations at end of release.
(3)
Calculated based on weighted average
shares outstanding including participating and non-participating
share-based awards, dilutive impact of stock options and
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)
See management statement for Same Store
Cash Net Operating Income on page 32 of our Supplemental Financial
Report furnished on Form 8-K with this press release.
The company’s guidance estimates for the second quarter 2021,
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.
Although these guidance estimates reflect the impact on the
company’s operating results of an assumed range of future
disposition activity, these guidance estimates do not include any
estimates of possible future gains or losses from possible future
dispositions because the magnitude of gains or losses on sales of
depreciable operating properties, if any, will depend on the sales
price and depreciated cost basis of the disposed assets at the time
of disposition, information that is not known at the time the
company provides guidance, and the timing of any gain recognition
will depend on the closing of the dispositions, information that is
also not known at the time the company provides guidance and may
occur after the relevant guidance period. We caution you not to
place undue reliance on our assumed range of future disposition
activity because any potential future disposition transactions will
ultimately depend on the market conditions and other factors,
including but not limited to the company’s capital needs, the
particular assets being sold and the company’s ability to defer
some or all of the taxable gain on the sales. These guidance
estimates also do not include the impact on operating results from
potential future acquisitions, possible capital markets activity,
possible future impairment charges or any events outside of the
company’s control. There can be no assurance that the company’s
actual results will not differ materially from these estimates.
Conference Call and Audio Webcast
KRC management will discuss first quarter results and the
current business environment during the company’s April 29, 2021
earnings conference call. The call will begin at 10:00 a.m. Pacific
Time and last approximately one hour. Those interested in listening
via the Internet can access the conference call at https://services.choruscall.com/links/krc210429.html.
It may be necessary to download audio software to hear the
conference call. Those interested in listening via telephone can
access the conference call at (866) 312-7299. International callers
should dial (412) 317-1070. In order to bypass speaking to the
operator on the day of the call, please pre-register anytime at
https://dpregister.com/sreg/10148265/d9aa7e7f41. A
replay of the conference call will be available via telephone on
April 29, 2021 through May 6, 2021 by dialing (877) 344-7529 and
entering passcode 10148265. International callers should dial (412)
317-0088 and enter the same passcode. The replay will also be
available on our website at http://investors.kilroyrealty.com/shareholders/investor-events/default.aspx.
About Kilroy Realty Corporation
Kilroy Realty Corporation (NYSE: KRC, the “company”, “KRC”) is a
leading West Coast landlord and developer, with a major presence in
San Diego, Greater Los Angeles, the San Francisco Bay Area, and the
Pacific Northwest. The company has earned global recognition for
sustainability, building operations, innovation and design. As
pioneers and innovators in the creation of a more sustainable real
estate industry, the company’s approach to modern business
environments helps drive creativity, productivity and employee
retention for some of the world’s leading technology,
entertainment, life science and business services companies.
KRC 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 and
mixed-use projects.
As of March 31, 2021, KRC’s stabilized portfolio totaled
approximately 14.0 million square feet of primarily office and life
science space that was 91.5% occupied and 93.3% leased. The company
also had 808 residential units in Hollywood and San Diego, which
had a quarterly average occupancy of 69.1%. In addition, KRC had
five in-process development projects with an estimated total
investment of $1.5 billion, totaling approximately 1.8 million
square feet of office and life science space. The office and life
science space was 88% leased.
A Leader in Sustainability and Commitment to Corporate Social
Responsibility
KRC is listed on the Dow Jones Sustainability World Index and
has been recognized by industry organizations around the world.
KRC’s stabilized portfolio was 67% LEED certified, 41% Fitwel
certified, the highest of any non-government organization, and 71%
of eligible properties were ENERGY STAR certified as of March 31,
2021.
The company has been recognized by GRESB, the Global Real Estate
Sustainability Benchmark, as the listed sustainability leader in
the Americas for six of the last seven years. Other honors have
included the National Association of Real Estate Investment Trust’s
(NAREIT) Leader in the Light award for six consecutive years and
ENERGY STAR Partner of the Year for eight years as well as ENERGY
STAR’s highest honor of Sustained Excellence, for the past six
years.
A big 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 second year in
a row, the company has been named to Bloomberg’s Gender Equality
Index—recognizing companies committed to supporting gender equality
through policy development, representation, and transparency.
More information is available at
http://www.kilroyrealty.com.
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 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 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; our ability to re-lease property at or above
current market rates; 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; 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; our ability to maintain our status as a REIT;
and uncertainties regarding the impact of the COVID-19 pandemic,
and restrictions intended to prevent its spread, on our business
and the economy generally. 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, 2020 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.
KILROY
REALTY CORPORATION
SUMMARY OF
QUARTERLY RESULTS
(unaudited; in thousands, except
per share data)
Three Months Ended March
31,
2021
2020
Revenues
$
235,646
$
221,328
Net income available to common
stockholders
$
497,631
$
39,817
Weighted average common shares outstanding
– basic
116,344
106,875
Weighted average common shares outstanding
– diluted
116,801
107,390
Net income available to common
stockholders per share – basic
$
4.27
$
0.37
Net income available to common
stockholders per share – diluted
$
4.26
$
0.37
Funds From Operations (1)(2)
$
116,244
$
110,173
Weighted average common shares/units
outstanding – basic (3)
118,333
110,031
Weighted average common shares/units
outstanding – diluted (4)
118,790
110,546
Funds From Operations per common
share/unit – basic (2)
$
0.98
$
1.00
Funds From Operations per common
share/unit – diluted (2)
$
0.98
$
1.00
Common shares outstanding at end of
period
116,450
115,068
Common partnership units outstanding at
end of period
1,151
2,021
Total common shares and units outstanding
at end of period
117,601
117,089
March 31, 2021
March 31, 2020
Stabilized office portfolio occupancy
rates: (5)
Greater Los Angeles
87.5
%
94.0
%
San Diego County
87.4
%
88.3
%
San Francisco Bay Area
94.3
%
94.3
%
Greater Seattle
97.8
%
95.5
%
Weighted average total
91.5
%
93.5
%
Total square feet of stabilized office
properties owned at end of period: (5)
Greater Los Angeles
4,404
4,027
San Diego County
2,316
2,145
San Francisco Bay Area
5,528
6,350
Greater Seattle
1,802
1,802
Total
14,050
14,324
________________________
(1)
Reconciliation of Net income available to
common stockholders to Funds From Operations available to common
stockholders and unitholders and management statement on Funds From
Operations are included after the Consolidated Statements of
Operations.
(2)
Reported amounts are attributable to
common stockholders, common unitholders and restricted stock
unitholders.
(3)
Calculated based on weighted average
shares outstanding including participating share-based awards (i.e.
nonvested stock and certain time based restricted stock units) and
assuming the exchange of all common limited partnership units
outstanding.
(4)
Calculated based on weighted average
shares outstanding including participating and non-participating
share-based awards, dilutive impact of stock options and
contingently issuable shares, and assuming the exchange of all
common limited partnership units outstanding.
(5)
Occupancy percentages and total square
feet reported are based on the company’s stabilized office
portfolio for the periods presented. Occupancy percentages and
total square feet shown for March 31, 2020 include the office
properties that were sold subsequent to March 31, 2020.
KILROY
REALTY CORPORATION
CONSOLIDATED BALANCE SHEETS
(unaudited; in thousands)
March 31, 2021
December 31, 2020
ASSETS
REAL ESTATE ASSETS:
Land and improvements
$
1,539,542
$
1,628,848
Buildings and improvements
6,480,857
6,783,092
Undeveloped land and construction in
progress
1,771,762
1,778,106
Total real estate assets held for
investment
9,792,161
10,190,046
Accumulated depreciation and
amortization
(1,838,338
)
(1,798,646
)
Total real estate assets held for
investment, net
7,953,823
8,391,400
Cash and cash equivalents
657,819
731,991
Restricted cash
1,028,759
91,139
Marketable securities
24,089
27,481
Current receivables, net
12,855
12,007
Deferred rent receivables, net
370,470
386,658
Deferred leasing costs and
acquisition-related intangible assets, net
190,721
210,949
Right of use ground lease assets
95,312
95,523
Prepaid expenses and other assets, net
50,505
53,560
TOTAL ASSETS
$
10,384,353
$
10,000,708
LIABILITIES AND
EQUITY
LIABILITIES:
Secured debt, net
$
252,298
$
253,582
Unsecured debt, net
3,671,094
3,670,099
Accounts payable, accrued expenses and
other liabilities
408,552
445,100
Ground lease liabilities
97,617
97,778
Accrued dividends and distributions
59,472
59,431
Deferred revenue and acquisition-related
intangible liabilities, net
123,794
128,523
Rents received in advance and tenant
security deposits
68,634
68,874
Total liabilities
4,681,461
4,723,387
EQUITY:
Stockholders’ Equity
Common stock
1,165
1,160
Additional paid-in capital
5,122,584
5,131,916
Retained earnings (distributions in excess
of earnings)
334,496
(103,133
)
Total stockholders’ equity
5,458,245
5,029,943
Noncontrolling Interests
Common units of the Operating
Partnership
53,930
49,875
Noncontrolling interests in consolidated
property partnerships
190,717
197,503
Total noncontrolling interests
244,647
247,378
Total equity
5,702,892
5,277,321
TOTAL LIABILITIES AND EQUITY
$
10,384,353
$
10,000,708
KILROY
REALTY CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited; in thousands, except
per share data)
Three Months Ended March
31,
2021
2020
REVENUES
Rental income
$
234,656
$
218,633
Other property income
990
2,695
Total revenues
235,646
221,328
EXPENSES
Property expenses
38,859
38,983
Real estate taxes
25,266
22,202
Ground leases
1,828
2,317
General and administrative expenses
21,985
19,010
Leasing costs
692
1,456
Depreciation and amortization
75,932
74,370
Total expenses
164,562
158,338
OTHER INCOME (EXPENSES)
Interest income and other net investment
gain (loss)
1,373
(3,128
)
Interest expense
(22,334
)
(14,444
)
Gain on sale of depreciable operating
property
457,288
—
Total other income (expenses)
436,327
(17,572
)
NET INCOME
507,411
45,418
Net income attributable to noncontrolling
common units of the Operating Partnership
(4,886
)
(705
)
Net income attributable to noncontrolling
interests in consolidated property partnerships
(4,894
)
(4,896
)
Total income attributable to
noncontrolling interests
(9,780
)
(5,601
)
NET INCOME AVAILABLE TO COMMON
STOCKHOLDERS
$
497,631
$
39,817
Weighted average common shares outstanding
– basic
116,344
106,875
Weighted average common shares outstanding
– diluted
116,801
107,390
Net income available to common
stockholders per share – basic
$
4.27
$
0.37
Net income available to common
stockholders per share – diluted
$
4.26
$
0.37
KILROY
REALTY CORPORATION
FUNDS FROM
OPERATIONS
(unaudited; in thousands, except
per share data)
Three Months Ended March
31,
2021
2020
Net income available to common
stockholders
$
497,631
$
39,817
Adjustments:
Net income attributable to noncontrolling
common units of the Operating Partnership
4,886
705
Net income attributable to noncontrolling
interests in consolidated property partnerships
4,894
4,896
Depreciation and amortization of real
estate assets
74,431
72,438
Gain on sale of depreciable real
estate
(457,288
)
—
Funds From Operations attributable to
noncontrolling interests in consolidated property partnerships
(8,310
)
(7,683
)
Funds From Operations(1)(2)(3)
$
116,244
$
110,173
Weighted average common shares/units
outstanding – basic (4)
118,333
110,031
Weighted average common shares/units
outstanding – diluted (5)
118,790
110,546
Funds From Operations per common
share/unit – basic (2)
$
0.98
$
1.00
Funds From Operations per common
share/unit – diluted (2)
$
0.98
$
1.00
________________________
(1)
We calculate 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
extraordinary items, as defined by GAAP, gains and losses from
sales of depreciable real estate and impairment write-downs
associated with depreciable real estate, plus real estate-related
depreciation and amortization (excluding amortization of deferred
financing costs and depreciation of non-real estate assets) and
after adjustment for unconsolidated partnerships and joint
ventures. 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.
We believe that FFO is a useful
supplemental measure of our 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 our 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, our
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, we believe that FFO along with the required
GAAP presentations provides a more complete measurement of our
performance relative to our 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 our operating performance because 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 our properties, which are significant
economic costs and could materially impact our results from
operations.
(2)
Reported amounts are attributable to
common stockholders, common unitholders and restricted stock
unitholders.
(3)
FFO available to common stockholders and
unitholders includes amortization of deferred revenue related to
tenant-funded tenant improvements of $4.2 million and $5.0 million
for the three months ended March 31, 2021 and 2020,
respectively.
(4)
Calculated based on weighted average
shares outstanding including participating share-based awards (i.e.
certain time based restricted stock units) and assuming the
exchange of all common limited partnership units outstanding.
(5)
Calculated based on weighted average
shares outstanding including participating and non-participating
share-based awards, dilutive impact of stock options and
contingently issuable shares, and assuming the exchange of all
common limited partnership units outstanding.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210428006138/en/
Tyler H. Rose President (310) 481-8484 or Michelle Ngo Senior
Vice President, Chief Financial Officer and Treasurer (310)
481-8581
Kilroy Realty (NYSE:KRC)
過去 株価チャート
から 6 2024 まで 7 2024
Kilroy Realty (NYSE:KRC)
過去 株価チャート
から 7 2023 まで 7 2024