Kilroy Realty Corporation · NYSE:KRC
Kilroy Realty — Investor Day (November 2022)
29 slides from Kilroy Realty's investor day presentation, Nov 14, 2022
Slide 1: Kilroy Investor Event 2022
Kilroy Investor Event 2022 November 14, 2022
Slide 2: Corporate Overview & Strategy
SECTION 01 Corporate Overview & Strategy JOHN KILROY Chairman and CEO 2
Slide 3: Kilroy Strategy Can Thrive in Any Environment
Kilroy Strategy Can Thrive in Any Environment Best-in-Class Real Estate in the Most Dynamic Markets Disciplined and Experienced Approach to Capital Allocation Fortress Balance Sheet 3
Slide 4: Experienced Capital Allocation
OVERVIEW Capital Experienced Allocation Experienced Capital Allocation CONTRACTION EXPANSION COVID-19 PANDEM IC ACQUISITIONS ($M) $1,070 $698 $538 $674 $287 $207 $394 $257 $186 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 DEVELOPMENT STARTS ($M) $832 $925 $825 $1,040 $673 $570 $4
Slide 5: Landscape of Today's Environment
Landscape of Today’s Environment MACROECONOMIC UNCERTAINTY HYBRID WORK POLITICAL INITIATIVES 5
Slide 6: Kilroy's Product is Differentiated by Design, Art, and Architecture
Kilroy’s Product is Differentiated by Design, Art, and Architecture 6
Slide 7: World-Class Mixed-Use Live / Work / Play
World-Class Mixed-Use Live / Work / Play 7
Slide 8: Including Best-in-Class Health and Wellness Amenities...
Including Best-in-Class Health and Wellness Amenities... 8
Slide 9: ...Collaborative Outdoor Work Spaces...
...Collaborative Outdoor Work Spaces... 9
Slide 10: ...Immersive Retail Environments...
...Immersive Retail Environments... 10
Slide 11: ...and Vibrant Residential
...and Vibrant Residential 11
Slide 12: Dynamic Team of Experts
Dynamic Team of Experts #onekilroy 12
Slide 13: Portfolio Analytics
SECTION 02 Portfolio Analytics ELIOTT TRENCHER CIO & Interim CFO 13
Slide 14: Average Building Age
1 Analytics – Average Building Age Best-In-Class Portfolio Average Building Age Kilroy is aKilroy leaderHas the Youngest and Most Modern Portfolio Among Office REITs… in maintaining a young, high quality portfolio 73 48 45 46 Peer Office 34 34 REIT Average 25 25 25 23 20 15 11 KRC Bi-Coastal Sunbelt
Slide 15: Average Building Age vs Blue-Chip REITs
Average Building Age Best-In-Class Portfolio Average Building Age …and Stacks Up Well Against a Cross Section of Blue-Chip REITs Kilroy maintains a young portfolio across a cross section of other blue-chip REITs 44 35 25 20 17 11 9 Data Center REIT KRC Healthcare REIT Multi Family REIT Single Family
Slide 16: Walk Score by Market
Analytics – 1 Walk Score by Market Best-In-Class Portfolio Walk Score by Market Kilroy Competitive Set Kilroy properties are more centralized and KRC amenitized than Properties peers’ Are More Amenitized and Centralized Than Peers Resulting in Higher Walk Scores San Diego Los Angeles San Francisco /
Slide 17: Tenant Quality
1 Analytics – Tenant Quality Best-In-Class Portfolio Tenant Quality Track Record of Strategic Long-Term Tenant Partnerships With Investment Grade Companies Track record of strategic long-term tenant partnerships with investment-grade% companies Investment Grade Among Top Tenants(1) 31% 31% 29% Perce
Slide 18: World-Class Development Paired With Leading Sustainability Initiatives
World-Class Development Paired With Leading Columbia Square Hollywood, Los Angeles Crossing 900 Redwood City, Silicon Valley 350 Mission SOMA, San Francisco Sustainability Initiatives #1 Highest Proportion of LEED Platinum Office Buildings(1) 333 Brannan One Paseo 100 Hooper SOMA, Office, Retail & R
Slide 19: Superior Operating Metrics
1 Superior Operating Analytics – Metrics Superior Operating Metrics Best-In-Class Portfolio Kilroy’s commitment to quality translates into higher margins and occupancy Kilroy’s Commitment to Quality Translates Into Better Margins and Occupancy 72% 71% Operating Margins 68% 67% 65% 65% 63% 63% 62%
Slide 20: Recurring Capital Expenditures Relative to NOI
1 Recurring Analytics – Capital Expenditures Recurring CapEx Relative to NOI Best-In-Class Portfolio Kilroy’s high quality portfolio requires fewer recurring capital expenditures as a percentage of NOI 27% 27% 27% 26% 23% 22% 21% 20% 20% Peer Office REIT Average 16% 17% 13% 8% Bi-Coastal West-Coast
Slide 21: Portfolio Mark to Market
Portfolio 1 Mark Analytics – to Market Portfolio Mark to Market Best-In-Class Portfolio Overall, Kilroy’s in-place rents average ~12% below market rate Overall, KRC’s Leases Average ~12% Below Market Rate Breakdown by Region Breakdown by Property Type Breakdown by Building Age Los Angeles -11% Offic
Slide 22: Disciplined Track Record
Disciplined Track Record Capital allocation highlights from 2015 to today Acquisitions − Opportunistically entered Austin − Expanded our life science portfolio by ~$875M via acquisitions and developments / redevelopments Dispositions − Executed the largest single asset sale in San Francisco − Ente
Slide 23: NOI Contribution by Product
NOI Contribution by Product While life science exposure doubled, the composition of our office NOI changed as well… 2015 Year End 3Q22 Pro Forma(1) Life Science 8% Residential Life Science & Retail 20% 5% Office Office 92% 75% Total NOI: ~$360MM Total NOI: ~$800MM (1) As of 3Q22. Pro forma for st
Slide 24: NOI Contribution by Product
NOI Contribution by Product …as office over 10 years old now makes up only 17% of the current NOI 2015 Year End 3Q22 Pro Forma(1) Life Science Residential 8% & Retail Life Science 5% 20% Office Office Over 10 years Over 10 years 42% 17% Office Office 10 years and under 10 years and under 50% 58% To
Slide 25: A Continued Focus On Improving Quality…
A Continued Focus On Improving Quality… Since 2015 Dispositions Acquisitions Developments Dollar Amount $3.1B $1.9B $4.4B Average Age(1) ~12 years ~3 years ~10 years Walk Score: 49 Walk Score: 83 Walk Score: 81 Amenitized Locations Transit Score: 41 Transit Score: 68 Transit Score: 57 Capital Expend
Slide 26: …Has Materially Strengthened Our Portfolio Over Time
…Has Materially Strengthened Our Portfolio Over Time 2015 2022 Average Portfolio Age(1) ~12 years ~11 years 47% LEED certified 71% LEED certified Sustainability 65% Energy Star certified 76% Energy Star certified Walk Score: 65 Walk Score: 74 Amenitized Locations Transit Score: 46 Transit Score: 53
Slide 27: Capital Allocation: The Results
2 Analytics – The Results Capital Allocation The Results FFO Green Street NAV Annualized Dividend FFO Green Street NAV Annualized Dividend $2.16 $4.65 $89 $74 +54% +45% +21% $1.40 $3.20 2015 2022 2015 Current 2015 Current Outperformed byby Outperformed by Outperformed by Outperformed Outperformed b
Slide 28: Where Innovation Works
W h e r e I n n o v a t i o n Wo r k s
Slide 29: 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,