Kilroy Realty Announces 2024 Tax Treatment of Its Dividend Distributions

Rhea-AI Summary

Kilroy Realty (NYSE: KRC) has announced the tax treatment of its 2024 dividend distributions. The company will distribute $0.54 per share quarterly, payable on January 10, April 10, July 10, and October 9, 2024. Each distribution comprises approximately $0.4794 in taxable ordinary dividend, $0.0012 in capital gain distribution, and $0.0594 in return of capital.

As of September 30, 2024, Kilroy's portfolio included approximately 17.1 million square feet of primarily office and life science space, with 84.3% occupancy and 85.8% lease rates. The company also manages about 1,000 residential units with 92.0% average occupancy, two life science redevelopment projects totaling 100,000 square feet, and one development project of approximately 875,000 square feet.

Positive

• Stable quarterly dividend payments of $0.54 per share throughout 2024
• High portfolio lease rate at 85.8%
• Strong residential unit occupancy at 92.0%
• Carbon neutral operations across portfolio since 2020
• $1.0 billion development project in progress

Negative

• Office and life science space occupancy at 84.3%, indicating vacant space
• $80.0 million in estimated redevelopment costs for life science projects

LOS ANGELES--(BUSINESS WIRE)-- Kilroy Realty Corporation (NYSE: KRC, "Kilroy") announced today the 2024 tax treatment of its dividend distributions. The company's total dividend distributions per share of common stock (CUSIP #49427F108) are to be classified for income tax purposes as follows:

Record Date	Payable Date	Total Distribution per Share	Total Distribution Attributable to 2024	2024 Taxable Ordinary Dividend	2024 Total Qualified Dividend (1)	2024 Total Capital Gain Distribution	2024 Unrecaptured Section 1250 Gain (2)	2024 Return of Capital	2024 Section 199A Dividends (3)
12/29/2023	1/10/2024	$.5400000	$.5400000	$.4794381	$.0003360	$.0011790	-	$ .0593829	$ .4791021
3/29/2024	4/10/2024	.5400000	.5400000	.4794381	.0003360	.0011790	-	.0593829	.4791021
6/28/2024	7/10/2024	.5400000	.5400000	.4794381	.0003360	.0011790	-	.0593829	.4791021
9/30/2024	10/9/2024	.5400000	.5400000	.4794381	.0003360	.0011790	-	.0593829	.4791021

(1)		Total Qualified Dividend is a subset of, and is included in, the Taxable Ordinary Dividend amount.
(2)		Unrecaptured Section 1250 Gain is a subset of, and is included in, the Total Capital Gain Distribution amount.
(3)		The Tax Cuts and Jobs Act enacted on December 22, 2017 generally allows a deduction for individuals equal to 20% of ordinary dividends distributed by a REIT (excluding capital gain dividends and qualified dividend income). Section 199A Dividends is a subset of, and is included in, the Taxable Ordinary Dividend amount.
(4)		Additional Information Pursuant to Treasury Regulation §1.1061-6(c): One-Year Distributive Share Amount: $ 0.0047160 or 100% of the total capital gain distribution to shareholders for tax year ended December 31, 2024. To determine your share of the Company’s one-year distributive share amount, multiply the dollar amount of your reportable 2024 capital gain dividend from the Company (the amount shown in Box 2a of the Company’s 2024 Form 1099-DIV) by 100%. Three-Year Distributive Share Amount: $0. The remaining capital gain dividends, if any, are Section 1231 gains and therefore not considered for purposes of Section 1061.

The dividend distributions made to holders of record as of December 31, 2024 and paid on January 8, 2025 are considered 2025 dividend distributions for federal income tax purposes.

Stockholders are encouraged to consult with their tax advisors as to their specific tax treatment for Kilroy Realty Corporation common distributions.

About Kilroy Realty Corporation

Kilroy Realty Corporation (NYSE: KRC, the “Company”, “Kilroy”) is a leading U.S. landlord and developer, with operations in San Diego, Los Angeles, the San Francisco Bay Area, Seattle, and Austin. The Company has earned global recognition for sustainability, building operations, innovation, and design. As a pioneer and innovator 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.

The Company 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 September 30, 2024, Kilroy’s stabilized portfolio totaled approximately 17.1 million square feet of primarily office and life science space that was 84.3% occupied and 85.8% leased. The Company also had approximately 1,000 residential units in Hollywood and San Diego, which had a quarterly average occupancy of 92.0%. In addition, the Company had two life science redevelopment projects in the tenant improvement phase totaling approximately 100,000 square feet with total estimated redevelopment costs of $80.0 million, and one approximately 875,000 square foot in-process development project with a total estimated investment of $1.0 billion.

A Leader in Sustainability and Commitment to Corporate Social Responsibility

Kilroy has a longstanding commitment to sustainability and continues to be a recognized leader in our sector. For over a decade, the Company and its sustainability initiatives have been recognized with numerous honors, including earning the GRESB five star rating and being named a sector and regional leader in the Americas. Other honors have included the Nareit Leader in the Light Award, being listed on the Dow Jones Sustainability World Index, being named ENERGY STAR Partner of the Year, and receiving the ENERGY STAR highest honor of Sustained Excellence.

Kilroy is proud to have achieved carbon neutral operations across our portfolio since 2020. The Company also has a longstanding commitment to maintain high levels of LEED, Fitwel, and ENERGY STAR certifications across the portfolio.

A significant part of the Company’s foundation is its commitment to enhancing employee growth, satisfaction, and wellness while maintaining a diverse and thriving culture. For four consecutive years, the Company has been named to Bloomberg’s Gender Equality Index, which recognizes 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, including periods of heightened inflation, 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, Texas, 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, including bankruptcy, lack of liquidity or lack of funding, and the impact labor disruptions or strikes, such as episodic strikes in the entertainment industry, may have on our tenants’ businesses; our ability to re-lease property at or above current market rates; reduced demand for office space, including as a result of remote working and flexible working arrangements that allow work from remote locations other than an employer's office premises; 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; changes in interest rates and 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; risks associated with climate change and our sustainability strategies, and our ability to achieve our sustainability goals; and our ability to maintain our status as a REIT. 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, 2023, 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250122551203/en/

Jeffrey Kuehling

Executive Vice President,

Chief Financial Officer and Treasurer

(310) 481-8440

Source: Kilroy Realty Corporation

FAQ

What is KRC's dividend payment schedule for 2024?

KRC will pay quarterly dividends of $0.54 per share on January 10, April 10, July 10, and October 9, 2024.

What is the tax treatment of KRC's 2024 dividend distributions?

Each quarterly distribution consists of $0.4794 in taxable ordinary dividend, $0.0012 in capital gain distribution, and $0.0594 in return of capital.

What is KRC's current portfolio occupancy rate as of September 2024?

KRC's portfolio was 84.3% occupied and 85.8% leased as of September 30, 2024.

How many square feet of property does KRC manage in its stabilized portfolio?

KRC manages approximately 17.1 million square feet of primarily office and life science space.

What is the value of KRC's current development projects?

KRC has two life science redevelopment projects totaling $80.0 million and one development project with an estimated investment of $1.0 billion.