Long-Term Leases Represent Demand for State-of-the-Art Facilities in Burgeoning Submarkets
SAN DIEGO– Kilroy Realty Corporation (NYSE: KRC, “Kilroy”) today announced three new leases totaling 330,000 square feet with publicly traded life science and biotech companies in San Diego. Tandem Diabetes Care (~182,000 square feet), DermTech (~96,000 square feet), and Sorrento Therapeutics (~52,000 square feet) lease transactions involve the redevelopment of commercial office space into three state-of-the-art life science/lab facilities and support Kilroy’s significant investment in broadening its life science portfolio.
Kilroy also plans for a ~600,000 square foot project (Santa Fe Summit) with tech office/life science flexibility on the 56 Corridor to meet the growing demand for space among life science companies in San Diego.
“We are thrilled to welcome these high-caliber companies to our portfolio,” said Nelson Ackerly, senior vice president of Kilroy. “Our new partnerships are a testament to the quality and flexibility of our properties in the context of their life after initial tenancy. We invest in assets within desirable locations that can support a variety of uses.”
Strength of the Life Science Market in San Diego
As a top-three life science market in the United States, the race among biotech and life science firms to secure quality real estate in San Diego is booming from traditionally concentrated clusters into other well-established, highly sought-after areas.
“Vacancy rates in Torrey Pines and University Town Center (UTC) are less than 2% and 0.5% respectively, and rents are at all-time highs, up over 20% year-over-year,” said Nelson Ackerly. “With this record demand for state-of-the-art research and development space, life science companies have firmly set their sights on Del Mar Heights and the 56-Corridor.”
ABOUT KILROY
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, the Pacific Northwest and Austin, Texas. 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 and productivity for some of the world’s leading technology, entertainment, life science and business services companies.
Kilroy 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 June 30, 2021, Kilroy’s stabilized portfolio totaled approximately 14.2 million square feet of primarily office and life science space that was 91.8% occupied and 93.6% leased. The company also had more than 1,000 residential units in Hollywood and San Diego, which had a quarterly average occupancy of 71.9%. In addition, Kilroy had seven in-process development projects with an estimated total investment of $2.9 billion, totaling approximately 3.4 million square feet of office and life science space. The office and life science space was 57% leased, which included the June commencement of the KOP 2 project.
A Leader in Sustainability and Commitment to Corporate Social Responsibility
Kilroy is listed on the Dow Jones Sustainability World Index and has been recognized by industry organizations around the world. Kilroy’s stabilized portfolio was 74% LEED certified, 42% Fitwel certified, the highest of any non-government organization, and 72% of eligible properties were ENERGY STAR certified as of June 30, 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.
