Kilroy Realty Corp. (NYSE:KRC) Q4 2017 Earnings Conference Call Transcript

Feb 01, 2018 • 01:00 pm ET

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Kilroy Realty Corp. (NYSE:KRC) Q4 2017 Earnings Conference Call Transcript

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Q & A
Operator
Operator

We will now begin the question-and-answer session. (Operator Instructions) The first question comes from Craig Mailman of KeyBanc Capital Markets. Please go ahead.

Analyst
Craig Mailman

Hi, guys. Tyler, maybe on the dispositions, could you give us a sense of kind of an anticipated timing in the guidance? Is it more front-end loaded, back-end loaded to get to that $0.15? And then maybe just a makeup of it, is it going to be all non-core or could it include some JVs of kind of lower cap rate assets?

Executive
Tyler H. Rose

Well, I will take the first part of that and then maybe John can take the second part of that. But from a timing perspective, we are modeling mid-year maybe a little bit later than mid-year into the third quarter.

Executive
John Kilroy

Yeah. Craig, on the makeup, I don't want to get too specific on that, but you have seen us sell-off the assets that we thought didn't have the legs for the future or didn't have as higher pecking order in the kind of the strategic sense of location. We'll continue to do that.

We are going through an analysis right now as we regularly do every quarter about our portfolio. And I really can't get too specific. But we could end up doing some ventures. We certainly are going to do some dispositions. Whether some of that is core remains to be seen. More to come, it's early in the year.

Analyst
Craig Mailman

Okay. That's helpful. And then just on Bridgepoint being taken out of service, could you give us a sense of how much capital you guys think you would need to spend on that ultimately and maybe where a stabilized return could come in?

Executive
John Kilroy

Tyler, you want to handle it?

Executive
Tyler H. Rose

Yeah. On the capital side, there is a couple of components to it. One is the modernization of the ground plan and the lobby areas and so forth, and roughly it's $7 million to $10 million for that component of it. And then there is going to be TIs and leasing commissions obviously to release it. And the space was -- part of the space was formally a school and so we will be upgrading that school space to modern office space. And so to be determined what the TI packages are going to be. But overall in the long run, if we get it fully released, it could be as much as $35 million, $40 million.

Analyst
Craig Mailman

And just from a same-store perspective, when do you think this ultimately comes back in?

Executive
Tyler H. Rose

Probably mid -- it depends on leasing, obviously. But I mean, with the lease-up plan sort of mid-year next -- mid-year next year.

Analyst
Craig Mailman

Okay. And then just lastly, John, you guys bought some more life science this quarter, have the option for the site next to it, how big should we expect this could become as a part of the portfolio?

Executive
John Kilroy

The portfolio is moving around a little bit, right, with dispositions and development and so forth. So, it's hard to give you a