Kilroy Realty Corporation · NYSE:KRC
Kilroy Realty — Citi Global CEO Conference 2023
26 slides from Kilroy Realty's conference presentation, March 2023
Slide 1: Citi Global CEO Conference
KILROY Citi Global CEO Conference REALTY March 6 th – 7 th, 2023 KILROY REALTY | 0
Slide 2: What Makes Kilroy Differentiated
WHAT MAKES KILROY Differentiated Best-In-Class Landlord Management Team Dynamic, well-rounded and experienced Portfolio Quality Premier curated, amenitized workplace environments with 11 years average age Unrivaled External Relationships Including strong connections in the Venture Capital community
Slide 3: Uniquely Positioned to Play Offense & Defense
WHAT MAKES KILROY Uniquely Positioned to Play Offense & Defense OFFENSIVE DEFENSIVE Development Best in Class Strong Balance Pipeline Portfolio & Team Sheet $1.8B under development(1) ~93% leased 6.0x net debt to EBITDA(2) ~58% of development pipeline comprised of life Leader in quality an
Slide 4: Better Positioned Today Than Last Cycle
WHAT MAKES KILROY Better Positioned Today Than Last Cycle Great Financial Crisis Today (December 2009) (December 2022) Average Age of Portfolio: ~15 Years Average Age of Portfolio: ~11 Years Number of Markets: 3 Number of Markets: 5 Total NOI: ~$205M Total NOI: ~$780M Liquidity: ~$460M Liquidity: ~$
Slide 5: Connecting the Dots to Inform Our Growth Strategy
THE FUTURE: Connecting the Dots to Inform Our Growth Strategy WHERE ARE WE GOING? Flight to OUTSIZED DEMAND FOR NEW Quality & MODERNIZED PRODUCT Dynamic Meaningful Return to Reduction in Office Supply Mandates Continued Stadium Tower | Austin Strength of VC Funding KILROY REALTY | 4
Slide 6: Preparing for the Next "2010 Moment"
THE FUTURE: Preparing for the Next “2010 Moment” WHERE ARE WE GOING? Critical to Lay Groundwork Now to Capitalize on Future Opportunities KRC’s Competitive Advantages… … Informs our Investment Framework 1 Vision Balance 4 Sheet 2 Team Access 5 to Capital 3 Product KILROY REALTY | 5
Slide 7: Gravitational Pull to Premier Product
THE FUTURE: Gravitational Pull to Premier Product WHERE ARE WE GOING? Total U.S. Groundbreakings Down ~60% From 2019 25 Groundbreakings (m.s.f) 20 15 10 5 0 2019 2020 2021 2022 2019 2020 2021 2022 Total ~60M ~40M ~50M ~25M Annual SF: Source: JLL. KILROY REALTY | 6
Slide 8: Supercharged Platform Growth When Time Is Right
THE FUTURE: Supercharged Platform Growth When Time Is Right WHERE ARE WE GOING? 8 ACROSS TOTALING FUTURE 5 ~8.0M DEVELOPMENT PROJECTS MARKETS SQUARE FEET (MULTI-PHASED) ~30% ~20% ~50% LIFE SCIENCE RESIDENTIAL OFFICE Note: Projections based on information as we know it today. No assurance can be give
Slide 9: Appendix
APPENDIX KILROY REALTY | 8 2100 Kettner | Little Italy, San Diego
Slide 10: Benchmarking Average Age
APPENDIX Benchmarking Average Age Kilroy Has the Youngest and Most Modern Portfolio Among Office REITs 73 48 45 46 Peer Office 34 34 REIT Average 25 25 25 23 20 15 11 KRC Bi-Coastal Sunbelt Sunbelt West-Coast Bi-Coastal Sunbelt West-Coast West-Coast Bi-Coastal East-Coast East-Coast East-Coast REIT R
Slide 11: Leading Quality Score
APPENDIX Leading Quality Score Our Commitment to Modern, Amenitized, and Sustainable Workplace Environments Differentiates Our Portfolio and Attracts a Premier Tenant Base KILROY REALTY 11 | 10 Source: Green Street.
Slide 12: Sustainability Achievements
APPENDIX Sustainability Achievements Newsweek US EPA Green Power Green Lease Leader Dow Jones Sustainability Listed on America’s Most Responsible Partnership Leader, 2014-2022 World Index Companies, 2020-2022 Gold Level, 2018-2022 Top 100 Green Power Purchasers, 2021-2022 Member, 2017-2022 Energy St
Slide 13: Markets Have Changed
APPENDIX Markets Have Changed Available Blocks Over 100K SF in KRC Markets 100 Mega shifts have occurred in the office markets 90 80 70 60 The number of available blocks of space 50 have increased across our markets 40 30 20 However, premium properties lead in 10 activity and rents 0 2019 2022
Slide 14: Return to Office Updates
APPENDIX Return to Office Updates Recent Announcements 5 days per week in the office following Elon 3 days a week starting May 2023 Musk’s acquisition 4 days a week starting March 2023 At least 3 days a week as of August 2022 Sales staff near the office in 2-3 days per At least 3 days a week as of S
Slide 15: Layoffs in Perspective
APPENDIX Layoffs in Perspective Adjusting for the Layoffs, the Current Headcount Among the Below Companies Remains Higher Than Pre-COVID Numbers, and in Most Cases, Substantially Higher Change in Employment (Current vs 2019 YE) +47% +91% +20% +47% +4% +70% +105% +9% +16% +38% (1) 2019 YE Employee Co
Slide 16: Venture Capital Funding Levels
APPENDIX Venture Capital Funding Levels West Coast Commands 48% of Total Venture Funding West Coast Venture Capital Trends $200 8,000 $180 7,015 7,000 $160 6,000 5,769 $140 5,122 5,064 5,000 $120 4,830 4,522 4,512 4,181 $100 4,000 $173.1B $80 3,000 $60 $113.6B 2,000 $93.1B $40 $83.3B $75.8B $45.5B $
Slide 17: Update on Artificial Intelligence
APPENDIX Update on Artificial Intelligence Investment in AI by Geography Top Funded Companies SF Bay Area $6.8B Microsoft $1.0B HQ: San Francisco cumulative New York $1.1B investment Bay Area Funding is of $704M London $500M HQ: San Francisco Tel Aviv $388M 6x $14B $603M the Next Top Metro HQ: San F
Slide 18: Kilroy's Life Science Positioning
APPENDIX Kilroy’s Life Science Positioning Kilroy’s Life Science Portfolio and Pipeline Projects Are Positioned Within Sub-Markets With Excellent Underlying Fundamentals San Diego Bay Area 15% 30% 10% 20% 5% 10% Kilroy Oyster Point 0% 0% Del Mar UTC Sorrento Mesa South SF Rest of Mid-Peninsula Vacan
Slide 19: Platform Detail & Financial Overview
PLATFORM DETAIL & FINANCIAL OVERVIEW KILROY REALTY | 18 The Brannans | San Francisco
Slide 20: Strong Capital Allocation Track Record
APPENDIX Strong Capital Allocation Track Record COVID-19 EXPANSION CONTRACTION EXPANSION CONTRACTION EXPANSION PANDEMIC ACQUISITIONS ($M) $507 $698 $538 $674 $394 $1,070 $5.3B $254 $98 $287 $207 $257 $186 $31 $8 $31 $25 Total 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Slide 21: In-process Development
APPENDIX In-process Development Office Life Science ~$750M Investment ~$1B Investment Indeed Tower | CBD, Austin 4690 Executive Drive | UTC, San Diego 9514 Towne Centre Drive | UTC, San Diego KOP Phase 2 | Oyster Point, South San Francisco 4400 Bohannon Drive | Menlo Park, San Francisco Note: Develo
Slide 22: Kilroy's Growing Life Science Portfolio
APPENDIX Kilroy’s Growing Life Science Portfolio LIFE SCIENCE PORTFOLIO PRO FORMA FOR PRO FORMA FOR FUTURE TODAY(1) UNDER CONSTRUCTION(2) LIFE SCIENCE(3) 17% 22% 30% Organic Life Science Growth Through Existing Land Pipeline & Convertible Assets Note: Percentages are based on current 2022 forecasted
Slide 23: Staggered Debt Maturities
APPENDIX Staggered Debt Maturities Debt Maturity Schedule $200 $160 $475 $500 $425 $83 $425 $450 $400 $400 $350 $250 $175 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 Unsecured Debt (Green Bonds) Unsecured Debt Secured Debt Term Loan KRC Has No Maturities Until December 2024 and 100% of De
Slide 24: Liquidity Optionality
APPENDIX Liquidity Optionality Uses – Development Spending Total 2023 Spend Development Spending(1) $500M TOTAL $500M Sources Total Cash on Hand $290M Dispositions(2) $100M Term Loan Availability $300M Revolver Availability $1,100M TOTAL $1,790M Note: Data as of 4Q22. Cash balance as of 1/31/23. (1)
Slide 25: Disclaimer
DISCLAIMER This presentation 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,
Slide 26: Where Innovation Works
Where Innovation Works KILROY REALTY | 25