Kilroy Realty Corp. Q2 2010 Earnings Call Transcript
John will start the call with an overview of the quarter and our key markets. I'll add financial highlights and update an earning guidance for 2010, and then we'll be happy to take your questions. John.
Thanks, Tyler. Hello everyone, and thanks for joining us today. A lot has happened at KRC since our last call. We added two more acquisitions to the two we announced in April, and closed four transactions in the second quarter for a total purchase price of approximately $411 million.
Four new projects increased the size of our stabilized portfolio by $1.3 million sq. feet.In the capital markets, we successfully placed a $250 million debt offering of ten-year notes, and tendered for $150 million of our outstanding 2012 exchangeable notes. We are also nearing completion on a new $500 million revolving bank facility. Our leasing momentum continued, with results that mirrored the first quarter. We signed new or renewing leases on about 332,000 sq. feet of space during the second quarter, and year-to-date we've now signed leases on more than 800,000 sq. feet. In addition, we have a large pipeline of letters of intent that currently totals 616,000 sq. feet. Approximately half of these LOIs are related to office leases, and a third are related to potential new leases on currently vacant space. The average deal size is approximately 17,000 sq. feet. As a result of our leasing success over the past three quarters, occupancy in our stabilized portfolio increased 85.1%, up from 82.8% at the end of the first quarter. We are now 89% leased. I should also note that market conditions remain mixed. Leasing is still competitive. Tenants continue to negotiate aggressively on leases, and decision-making timeframes remain extended. However, as we said last quarter, we are seeing stabilization in most submarkets.
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