Kilroy Realty Corp. (KRC - Free Report) , a real estate investment trust (REIT), has recently priced an equity offering of 5 million shares at $46.10 each. The company will also grant the underwriters an option to purchase an additional 750,000 shares to cover any over-allotments.
BofA Merrill Lynch, the investment banking and wealth management division of Bank of America Corporation (BAC - Free Report) ; J.P. Morgan Securities LLC, the investment banking division of JPMorgan Chase & Co. (JPM - Free Report) ; Barclays Capital Inc., the investment banking division of Barclays PLC (BCS - Free Report) ; and Wells Fargo Securities, part of Wells Fargo & Company (WFC - Free Report) are acting as joint book-running managers for the offering.
Kilroy expects to raise net proceeds of $220.9 million from the secondary offering, excluding the execution of the underwriters’ options. The company intends to contribute the proceeds from the equity offering to its operating partnership, which in turn is likely to utilize it for general corporate purposes.
Kilroy owns, develops and manages a diverse portfolio of office, industrial and multi-purpose real estate properties primarily in the coastal regions of Los Angeles, Orange County, San Diego, greater Seattle and the San Francisco Bay Area. As of June 30, 2012, the company owned 12.2 million rentable square feet of commercial office space and 3.4 million rentable square feet of industrial space.
Kilroy maintains an active multi-year development program focused on the economically dynamic locations characterized by strong long-term demand, limited supply, and high barriers to entry. As such, most of the properties of the company are concentrated in the coastal submarkets of Southern California that offer both – a vibrant economic backdrop for businesses and a unique quality of life for their employees.
Currently, we have a Neutral recommendation and a Zacks #3 Rank for Kilroy that translates into a short-term Hold rating.