Kilroy Realty Corp. (NYSE:KRC.PRH) Q4 2016 Earnings Conference Call Transcript
Feb 07, 2017 • 01:00 pm ET
Good day, ladies and gentlemen, and welcome to the Q4 2016 Kilroy Realty Corp. Earnings Conference Call. My name is Lauren and I will be your operator for today. (Operator Instructions)
I would now like to turn the conference over to Tyler Rose, EVP and CFO. Please proceed.
Good morning, everyone. Thank you for joining us. On the call with me today are John Kilroy, Jeff Hawken, David Simon, Heidi Roth, Mike Sanford, Rob Paratte, and Michelle Ngo.
(Forward-Looking Cautionary Statements)
This call is being telecast live on our website and will be available for replay for the next eight days, both by phone and over the Internet. Our earnings release and supplemental package have been filed on a Form 8-K with the SEC and both are also available on our website.
John will start the call with a review of the fourth quarter and the year. Jeff will discuss conditions in our key markets. I'll finish up with financial highlights and a review of our initial earnings guidance for 2017, which was published yesterday in our earnings release. Then we'll be happy to take your questions. John?
Thank you, Tyler. Hello, everyone, and thank you for joining us today.
2016 was another exceptional year at KRC. We delivered strong results across all areas of our business and continued to create value in our operating and development platforms that will drive future earnings and dividend growth. We are encouraged by the continued strengthening of our markets, as measured by low vacancy rates, increasing demand, and rising rental rates.
I'll start my comments today with a quick review of our 2016 accomplishments. We delivered strong leasing results in all of our stabilized portfolio, driving occupancy to 96% and boosting our same-store cash net operating income by 14%.
We delivered 1.1 million square feet of new office space that is 93% committed, including space to salesforce at 350 Mission Street, space to Dropbox at 333 Brannan Street, both in San Francisco; and space to Viacom and Fender guitars at our Columbia Square project in Hollywood. We delivered our first residential project, midyear, that is now over 60% leased. We signed a lease with Adobe for 66% of the office portion of 100 Hooper in San Francisco. And just yesterday, the lease was expanded to include all or 100% of the office space. We commenced construction of the project in the fourth quarter.
We secured entitlements on 2.3 million square feet of new office in mixed-use development, including One Paseo where we just broke ground, and we expanded our Flower Mart development site with the acquisition of additional parcel. The site now aggregates seven acres.
In a highly competitive acquisition market, we remain selective, but engaged. We acquired three properties with unique value-add opportunities and one that expands our reach into life sciences.
Throughout the year, we maintained our commitment to financial strength and disciplined capital management, generating $795 million in proceeds from nonstrategic asset dispositions and a new venture and raising $775 million