KILROY REALTY CORP

Previous wording

We are a self-administered REIT active in premier office, life science, and mixed-use property types in the United States. We own, develop, acquire, and manage real estate assets, consisting primarily of premier properties in Los Angeles, San Diego, the San Francisco Bay Area, Seattle, and Austin, which are markets that we believe have strategic advantages and strong barriers to entry. We own our interests in all of our real estate assets through the Operating Partnership and conduct substantially all of our operations through the Operating Partnership. We owned an approximate 99.0% common general partnership interest in the Operating Partnership as of March 31, 2025 and December 31, 2024. As of March 31, 2025, all of our properties are held in fee except for the fourteen office buildings that are held subject to long-term ground leases.

Current wording

We are a self-administered REIT active in premier office, life science, and mixed-use property types in the United States. We own, develop, acquire, and manage real estate assets, consisting primarily of premier properties in Los Angeles, San Diego, the San Francisco Bay Area, Seattle, and Austin, which are markets we believe have strategic advantages and strong barriers to entry. We own our interests in all of our real estate assets through the Operating Partnership and conduct substantially all of our operations through the Operating Partnership. We owned an approximate 99.0% common general partnership interest in the Operating Partnership as of June 30, 2025 and December 31, 2024. As of June 30, 2025, all of our properties are held in fee except for the fourteen office buildings that are held subject to long-term ground leases.

Previous wording

As of March 31, 2025, our stabilized portfolio was comprised of 123 office, life science, and mixed-use buildings encompassing an aggregate of approximately 17.1 million rentable square feet and 1,001 residential units. Our stabilized portfolio includes all of our properties with the exception of development and redevelopment projects currently committed for construction, under construction, or in the tenant improvement phase, undeveloped land, and real estate assets held for sale, if any. We define redevelopment properties as those properties for which we expect to spend significant development and construction costs pursuant to a formal plan to change its use, the intended result of which is a higher economic return on the property. We define a property in the tenant improvement phase as a development or redevelopment property where the project has reached “cold shell condition” and is ready for tenant improvements, which may require additional major base building modifications before being placed in service. Projects in the tenant improvement phase are moved into our stabilized portfolio once the project reaches the earlier of 95% occupancy or one year from the date of the cessation of major base building construction activities. Costs capitalized to construction in progress for development and redevelopment properties are transferred to land and improvements, buildings and improvements, and deferred leasing costs on our consolidated balance sheets as the projects or phases of projects are placed in service. We did not have any properties or undeveloped land held for sale at March 31, 2025.

Current wording

As of June 30, 2025, our stabilized portfolio was comprised of 118 office, life science, and mixed-use buildings encompassing an aggregate of approximately 16.4 million rentable square feet and 1,001 residential units. Our stabilized portfolio includes all of our properties with the exception of development and redevelopment properties currently committed for construction, under construction, or in the tenant improvement phase, undeveloped land, and real estate assets held for sale, if any. We define redevelopment properties as those properties for which we expect to spend significant development and construction costs pursuant to a formal plan to change its use, the intended result of which is a higher economic return on the property. We define a property in the tenant improvement phase as a development or redevelopment property where the project has reached “cold shell condition” and is ready for tenant improvements, which may require additional major base building modifications before being placed in service. Projects in the tenant improvement phase are moved into our stabilized portfolio once the project reaches the earlier of 95% occupancy or one year from the date of the cessation of major base building construction activities. Costs capitalized to construction in progress for development and redevelopment properties are transferred to land and improvements, buildings and improvements, and deferred leasing costs on our consolidated balance sheets as the projects or phases of projects are placed in service.

Previous wording

(1)Estimated rentable square feet upon completion.

Current wording

(1)For the property classified as held for sale, represents actual rentable square feet and consists of four buildings. For the in-process development and redevelopment projects in the tenant improvement phase, represents estimated rentable square feet upon completion.

Previous wording

Our stabilized portfolio also excludes our future development pipeline, which as of March 31, 2025 was comprised of eight potential development sites, representing approximately 64 gross acres of undeveloped land, on which we believe we could develop more than 6.0 million rentable square feet of office space.

Current wording

Our stabilized portfolio also excludes our future development pipeline, which, as of June 30, 2025, was comprised of eight potential development sites, representing approximately 64 gross acres of undeveloped land, on which we believe we could develop more than 6.0 million rentable square feet of office space and approximately 1,750 residential units.

Previous wording

The following table sets forth certain information regarding our stabilized portfolio:

Current wording

The following table sets forth certain information regarding our stabilized portfolio as of the end of the period presented:

Previous wording

(1)Occupancy percentages reported are calculated as the average of the daily ending occupancy percentages for the period presented and exclude occupancy percentages of properties held for sale. Represents economic occupancy for space where we have achieved revenue recognition for the associated lease agreements.

Current wording

(1)Occupancy percentages reported are calculated as the average of the daily ending occupancy percentages for the period presented. Represents economic occupancy for space where we have achieved revenue recognition for the associated lease agreements.

Previous wording

(1)Includes subsidiaries of the tenant listed.

Current wording

(1)Includes subsidiaries of the tenant listed. Excludes tenants at properties classified as held for sale.

Previous wording

(2)Annualized base rental revenue is a monthly contractual rent from existing tenants includes the impact of straight-lining rent escalations and the amortization of free rent periods and excludes the impact of the following: amortization of deferred revenue related to tenant-funded tenant improvements, amortization of above/below market rents, amortization for lease incentives due under existing leases, and expense reimbursement revenue. Includes 100% of the annualized base rental revenues of consolidated property partnerships.

Current wording

(2)Annualized base rental revenue is calculated as the annualized monthly contractual rents from existing tenants, including the impact of straight-lined rent escalations and the amortization of free rent periods and excluding the impact of the following: amortization of deferred revenue related to tenant-funded tenant improvements, amortization of above/below market rents, amortization for lease incentives due under existing leases, and expense reimbursement revenue. Includes 100% of the annualized base rental revenues of consolidated property partnerships.

Previous wording

(3)We define significant lease expirations as those with space expiring greater than 25,000 rentable square feet.

Current wording

(3)Significant lease expirations include those greater than 25,000 rentable square feet.

Previous wording

(4)The 2025 lease expiration represents 26,043 rentable square feet expiring on June 30, 2025

Current wording

(4)The 2025 lease expiration represents 26,043 rentable square feet that expired on June 30, 2025.

Previous wording

The amount of net rental income generated by our properties depends principally on our ability to maintain the occupancy rates of currently leased space and to lease currently available space, newly developed or redeveloped properties, newly acquired properties with vacant space, and space available from unscheduled lease terminations. The amount of rental income we generate also depends on our ability to maintain or increase rental rates at our properties. Negative trends in one or more of these factors could adversely affect our rental income in future periods. The following tables set forth certain information regarding leasing activity during the three months ended March 31, 2025.

Current wording

The amount of net rental income generated by our properties depends principally on our ability to maintain the occupancy rates of currently leased space and to lease currently available space, newly developed or redeveloped properties, newly acquired properties with vacant space, and space available from unscheduled lease terminations. The amount of rental income we generate also depends on our ability to maintain or increase rental rates at our properties. Negative trends in one or more of these factors could adversely affect our rental income in future periods. The following tables set forth certain information regarding leasing activity during the three and six months ended June 30, 2025:

Previous wording

(2)During the three months ended March 31, 2025, 4 new leases totaling 9,388 rentable square feet were signed and commenced.

Current wording

(2)During the three months ended June 30, 2025, 13 new leases totaling 123,963 rentable square feet were signed and commenced. During the six months ended June 30, 2025, 40 new leases totaling 241,827 rentable square feet were signed and commenced.

Previous wording

(3)Includes tenant improvement costs and third-party leasing commissions. Amounts exclude tenant-funded tenant improvements and indirect leasing costs.

Current wording

(3)Includes tenant improvements and third-party leasing commissions. Amounts exclude tenant-funded tenant improvements and indirect leasing costs.

Previous wording

(1)For leases that have been renewed early with existing tenants, the expiration date and annualized base rent information presented takes into consideration the renewed lease terms. Represents all in-place leases as of March 31, 2025, except intercompany leases.

Current wording

(1)Represents all in-place leases as of June 30, 2025, except intercompany leases.

Previous wording

(3)Represents annualized monthly contractual rents from existing tenants that includes the impact of straight-lining rent escalations and the amortization of free rent periods and excludes the impact of the following: amortization of deferred revenue related to tenant-funded tenant improvements, amortization of above/below market rents, amortization for lease incentives due under existing leases, and expense reimbursement revenue. Additionally, the underlying leases contain various expense structures including full service gross, modified gross, and triple net. Amounts represent percentage of total portfolio annualized contractual base rental revenue. For additional information on tenant improvement and leasing commission costs incurred by the Company for the current reporting period, please see further discussion under the caption “Information on Leases Executed.”

Current wording

(3)Represents annualized monthly contractual rents from existing tenants, including the impact of straight-lined rent escalations and the amortization of free rent periods and excluding the impact of the following: amortization of deferred revenue related to tenant-funded tenant improvements, amortization of above/below market rents, amortization for lease incentives due under existing leases, and expense reimbursement revenue. Additionally, the underlying leases contain various expense structures including full service gross, modified gross, and triple net. Amounts represent percentage of total portfolio annualized contractual base rental revenue. For additional information on tenant improvement and leasing commission costs incurred by the Company for the current reporting period, please see further discussion under the caption “Leases Executed.”

Previous wording

(4)Adjusting for leasing transactions executed as of March 31, 2025 but not yet commenced, the 2025 and 2026 expirations would be reduced by 85,975 and 430,644 square feet, respectively.

Current wording

(4)Adjusting for leases that have been backfilled or renewed by a subtenant as of June 30, 2025 but not yet commenced, the 2025, 2026, and 2027 expirations would be reduced by 90,492, 1,272, and 5,875 square feet, respectively.

Previous wording

In addition to the 3.2 million rentable square feet, or 18.6%, of unoccupied space in our stabilized portfolio as of March 31, 2025, leases representing approximately 17.2% of the occupied square footage of our stabilized portfolio are scheduled to expire during the remainder of 2025 and in 2026. The leases scheduled to expire during the remainder of 2025 and in 2026 represent approximately 2.3 million rentable square feet, or 14.2% of our total annualized base rental revenue. Adjusting for leases executed as of March 31, 2025 but not yet commenced, the remaining 2025 and 2026 expirations would be 361,596 and 1,469,363 square feet, respectively.

Current wording

In addition to the 3.2 million rentable square feet, or 19.2%, of unoccupied space in our stabilized portfolio as of June 30, 2025, leases representing approximately 12.4% of the occupied square footage of our stabilized portfolio are scheduled to expire during the remainder of 2025 and in 2026. The leases scheduled to expire during the remainder of 2025 and in 2026 represent approximately 1.6 million rentable square feet, or 10.3% of our total annualized base rental revenue. Adjusting for leases that have been backfilled or renewed by a subtenant as of June 30, 2025 but not yet commenced, the remaining 2025, 2026, and 2027 expirations would be 230,608, 1,301,948, and 998,251 square feet, respectively.

Previous wording

Our rental rates and occupancy are impacted by general economic conditions, including the pace of regional economic growth and access to capital. Therefore, we cannot give any assurance that leases will be renewed or that available space will be re-leased at rental rates equal to or above the current market rates.

Current wording

Our rental rates and occupancy are impacted by general economic conditions, including the pace of regional economic growth and access to capital. Therefore, we cannot guarantee that leases will be renewed or that available space will be re-leased at rental rates equal to or above the current market rates.

Previous wording

Of our occupied space as of March 31, 2025, approximately 1.9 million rentable square feet, or 11.3% of the square footage in our stabilized portfolio, was available for sublease, primarily in the San Francisco Bay Area. Of the approximately 1.9 million rentable square feet available for sublease as of March 31, 2025, approximately 18,663 rentable square feet representing one lease is scheduled to expire in 2025 and approximately 79,795 rentable square feet representing four leases are scheduled to expire in 2026.

Current wording

Of our occupied space as of June 30, 2025, approximately 2.0 million rentable square feet, or 12.1% of the square footage in our stabilized portfolio, was available for sublease, primarily in the San Francisco Bay Area, in addition to the rentable square feet currently subleased. Of the approximately 2.0 million rentable square feet available for sublease as of June 30, 2025, approximately 18,663 rentable square feet representing one lease is scheduled to expire in 2025 and approximately 117,369 rentable square feet representing two leases are scheduled to expire in 2026.

Previous wording

We continuously evaluate opportunities for the potential disposition of non-core properties and undeveloped land in our portfolio, or the formation of strategic ventures, with the intent of using the proceeds generated to acquire new operating and development properties, to finance development and redevelopment expenditures, to repay long-term debt, and for other general corporate purposes. We continue to evaluate strategic opportunities and remain a disciplined buyer of core, value-add, and strategic operating properties. We historically have focused on markets populated by knowledge and creative-based tenants in a variety of industries, including technology, media, healthcare, life sciences, entertainment, and professional services. As part of our capital recycling strategy, we may attempt to enter into transactions intended to qualify as like-kind exchanges pursuant to Section 1031 of the Code (“Section 1031 Exchanges”) and other tax deferred transaction structures, when possible, to defer some or all of the taxable gains on the sales, if any, for federal and state income tax purposes. See the “Liquidity and Capital Resources of the Operating Partnership – Liquidity Sources” section for further discussion of our capital recycling activities.

Current wording

We continuously evaluate opportunities for the potential disposition of non-core properties and undeveloped land in our portfolio, or the formation of strategic ventures, with the intent of using the proceeds generated to acquire new operating and development properties, to finance development and redevelopment expenditures, to repay long-term debt, and for other general corporate purposes. We continue to evaluate strategic opportunities and remain a disciplined buyer of core, value-add, and strategic operating properties. We historically have focused on markets populated by knowledge and creative-based tenants in a variety of industries, including technology, entertainment, healthcare, life sciences, and business services. As part of our capital recycling strategy, we may attempt to enter into transactions intended to qualify as like-kind exchanges pursuant to Section 1031 of the Code (“Section 1031 Exchanges”), and other tax deferred transaction structures, when possible, to defer some or all of the taxable gains on the sales, if any, for federal and state income tax purposes. See the “Liquidity and Capital Resources of the Operating Partnership – Liquidity Sources” section for further discussion of our capital recycling activities.

Previous wording

The timing of any potential future disposition or strategic venture transactions will depend on market conditions and other factors, including but not limited to, our capital needs, the availability of financing for potential buyers (which has been and may continue to be constrained due to current economic and market conditions) and our ability to absorb or defer some or all of the taxable gains on the sales. We cannot assure that we will dispose of any additional properties, enter into any additional strategic ventures, or that we will be able to effect a Section 1031 Exchange or be able to use other tax deferred structures in connection with our strategy. See the “Liquidity and Capital Resources of the Operating Partnership – Liquidity Sources” section for further information.

Current wording

As of June 30, 2025, we had one operating property, comprised of four buildings, classified as held for sale, with an expected sales price of $365.0 million. The sale of this property is expected to close late in the third quarter of 2025. The timing of any potential future disposition or strategic venture transactions will depend on market conditions and other factors, including, but not limited to, our capital needs, the availability of financing for potential buyers (which has been and may continue to be constrained due to current economic and market conditions), and our ability to absorb or defer some or all of the taxable gains on the sales. We cannot assure that we will dispose of any additional properties, enter into any additional strategic ventures, or that we will be able to effect a Section 1031 Exchange or be able to use other tax deferred structures in connection with our strategy. See the “Liquidity and Capital Resources of the Operating Partnership – Liquidity Sources” section for further information.

Previous wording

In connection with our capital recycling strategy, we may have one or more potential acquisitions of properties and/or undeveloped land under consideration that are in varying stages of negotiation and due diligence review, or under contract, at any point in time. However, we cannot provide assurance that we will enter into any agreements to acquire properties or undeveloped land, or that the potential acquisitions contemplated by any agreements we may enter into in the future will be completed. In addition, acquisitions are subject to various risks and uncertainties, and we may be unable to complete an acquisition after making a nonrefundable deposit or incurring acquisition-related costs.

Current wording

In connection with our capital recycling strategy, we may have one or more potential acquisitions of properties and/or undeveloped land under consideration that are in varying stages of negotiation and due diligence review, or under contract, at any point in time. However, we cannot guarantee that we will enter into any agreements to acquire properties or undeveloped land, or that the potential acquisitions contemplated by any agreements we may enter into in the future will be completed. In addition, acquisitions are subject to various risks and uncertainties, and we may be unable to complete an acquisition after making a nonrefundable deposit or incurring acquisition-related costs.

Previous wording

•Kilroy Oyster Point (Phase 2), South San Francisco, California. In June 2021, we commenced construction on Phase 2 of this 39-acre life science campus situated on the waterfront in South San Francisco and progressed the building to the tenant improvement phase during the first quarter of 2025. The second phase encompasses approximately 875,000 square feet of office and life science space across three buildings with a total estimated investment of $1.0 billion. We expect this property to be added to the stabilized portfolio upon the completion of the 12-month lease up period which is expected to end in the first quarter of 2026.

Current wording

•Kilroy Oyster Point (Phase 2), South San Francisco, California. In June 2021, we commenced construction on Phase 2 of this 39-acre life science campus situated on the waterfront in South San Francisco and progressed the property to the tenant improvement phase during the first quarter of 2025. The second phase encompasses approximately 875,000 square feet of office and life science space across three buildings with a total estimated investment of $1.0 billion. We expect this property to be added to the stabilized portfolio upon the completion of the 12-month lease up period which is expected to end in the first quarter of 2026.

Previous wording

•4690 Executive Drive, University Towne Center, San Diego, California. In March 2022, we began the phased redevelopment of this property and completed base building components and moved the building to the tenant improvement phase during the third quarter of 2024. This project is comprised of approximately 52,000 square feet of life science space with a total estimated investment of $25.0 million, inclusive of the depreciated basis of the building. We expect this property to be added to the stabilized portfolio upon the completion of the 12-month lease up period which is expected to end in the third quarter of 2025.

Current wording

•4690 Executive Drive, University Towne Center, San Diego, California. In March 2022, we began the phased redevelopment of this property and completed base building components and moved the building to the tenant improvement phase during the third quarter of 2024. This project is comprised of approximately 52,000 square feet of life science space with a total estimated investment of $30.0 million, inclusive of the depreciated basis of the building. We expect this property to be added to the stabilized portfolio upon the completion of the 12-month lease up period which is expected to end in the third quarter of 2025. We executed one lease this quarter for one floor of the building, bringing the project to 47% leased.

Previous wording

(1)Represents developable office/life science square feet and/or residential units. The developable square feet and/or residential units and scope of projects could change materially from estimated data provided due to one or more of the following: significant changes in the economy, market conditions, tenant requirements and demands, construction costs, new supply, regulatory and entitlement processes, or project design.

Current wording

(1)Project scope, including the estimated developable square feet or number of residential units, could change materially from estimates provided due to one or more of the following: significant changes in the economy, market conditions, tenant requirements and demands, construction costs, new supply, regulatory and entitlement processes, or project design.

Previous wording

(2)Represents cash paid and costs incurred, including accrued liabilities in accordance with GAAP, as of March 31, 2025.

Current wording

(2)Represents costs incurred, net of municipal bonds proceeds received related to public infrastructure improvements, including accrued liabilities in accordance with GAAP, as of June 30, 2025.

Previous wording

Fluctuations in our development activities could cause fluctuations in the average development asset balances qualifying for interest and other carrying cost and internal cost capitalization in future periods. A slowdown in development activities could result in fewer projects qualifying for interest capitalization under GAAP, resulting in higher interest expense. During the three months ended March 31, 2025 and 2024, we capitalized interest on in-process development and redevelopment projects and future development pipeline projects with an average aggregate cost basis of approximately $1.9 billion and $1.8 billion, respectively, as it was determined these projects qualified for interest and other carrying cost capitalization under GAAP. For the three months ended March 31, 2025, we capitalized $20.5 million of interest to our qualifying development and redevelopment projects. In addition, for the three months ended March 31, 2025, we capitalized $2.3 million of internal overhead costs, including compensation, to our qualifying development and redevelopment projects and $2.4 million of internal overhead costs, including compensation, to our qualifying capital improvement projects in the stabilized portfolio.

Current wording

Fluctuations in our development activities could cause fluctuations in the average development asset balances qualifying for interest and other carrying cost and internal cost capitalization in future periods. A slowdown in development activities could result in fewer projects qualifying for interest capitalization under GAAP, resulting in higher interest expense. The following table sets forth our capitalized interest and internal overhead cost capitalization in our stabilized portfolio:

Previous wording

As of March 31, 2025, there was approximately $37.2 million of total unrecognized compensation costs related to outstanding nonvested RSUs granted under share-based compensation arrangements. Such amount is based in part upon the estimated future outcome of the performance metrics as of March 31, 2025, and the actual compensation cost ultimately recognized could increase or decrease from this estimate based upon actual performance results. These costs are expected to be recognized over a weighted-average period of 2.2 years. The $37.2 million of unrecognized compensation cost does not reflect the future compensation costs for any share-based awards that may be granted subsequent to March 31, 2025. Share-based compensation expense for potential future awards could be affected by our operating and development performance, financial results, stock price, market conditions, and other factors. For additional information regarding our equity incentive awards, see Note 6 “Share-Based Compensation” to our consolidated financial statements included in this report.

Current wording

As of June 30, 2025, there was approximately $33.4 million of total unrecognized compensation costs related to outstanding nonvested RSUs granted under share-based compensation arrangements. Such amount is based in part upon the estimated future outcome of the performance metrics as of June 30, 2025, and the actual compensation cost ultimately recognized could increase or decrease from this estimate based upon actual performance results. These costs are expected to be recognized over a weighted-average period of 2.0 years. The $33.4 million of unrecognized compensation cost does not reflect the future compensation costs for any share-based awards that may be granted subsequent to June 30, 2025. Share-based compensation expense for potential future awards could be affected by our operating and development performance, financial results, stock price, market conditions, and other factors. For additional information regarding our equity incentive awards, see Note 7 “Share-Based Compensation” to our consolidated financial statements included in this report.

Previous wording

The following table summarizes our Net Operating Income, as defined, for our total portfolio for the three months ended March 31, 2025 and 2024.

Current wording

The following table summarizes our Net Operating Income for our total portfolio for the three months ended June 30, 2025 and 2024:

Previous wording

(1)Beginning January 1, 2025, the Company began excluding lease termination fees from the calculation of rental income for Net Operating Income. Net Operating Income as presented has been conformed to our new definition. The three months ended March 31, 2025 and 2024 excludes $0.5 million and $1.7 million of lease termination fees from total Net Operating Income, respectively, related to the Same Property portfolio.

Current wording

(1)Beginning January 1, 2025, the Company began excluding lease termination fees from the calculation of rental income for Net Operating Income. Net Operating Income as presented has been conformed to our new definition. The three months ended June 30, 2025 and 2024 excludes $10.8 million and $1.5 million of lease termination fees from total Net Operating Income, respectively, related to the Same Property portfolio.

Previous wording

(1)Beginning January 1, 2025, the Company began excluding lease termination fees from the calculation of rental income for Net Operating Income. The three months ended March 31, 2025 and 2024 excludes $0.5 million and $1.7 million of lease termination fees from total Net Operating Income, respectively, related to the Same Property portfolio.

Current wording

(1)Beginning January 1, 2025, the Company began excluding lease termination fees from the calculation of rental income for Net Operating Income. The three months ended June 30, 2025 and 2024 excludes $10.8 million and $1.5 million of lease termination fees from total Net Operating Income, respectively, related to the Same Property portfolio.

Previous wording

Net Operating Income decreased $7.3 million, or 3.9%, for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, primarily resulting from:

Current wording

Net Operating Income increased $2.8 million, or 1.5%, for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024, primarily resulting from:

Previous wording

•$1.9 million increase in revenue associated with tenant creditworthiness considerations; and

Current wording

•$5.7 million increase in revenue associated with tenant creditworthiness considerations that resulted in higher non-recurring charges in 2024; and

Previous wording

•$6.6 million decrease in straight-line rent due to the burn-off of $3.9 million in abated rent, mainly in the San Francisco Bay Area and San Diego regions, and aging leases;

Current wording

•$5.7 million decrease in straight-line rent, primarily due to the burn-off of $2.2 million in abated rent, mainly in the San Francisco Bay Area and San Diego regions, and aging leases where cash rent now exceeds GAAP rent on a straight-line basis;

Previous wording

•A decrease of $0.2 million attributable to the Development Properties; partially offset by

Current wording

•An increase of $0.5 million attributable to the Development Properties; partially offset by

Previous wording

•A decrease of $1.8 million attributable to the Same Property Portfolio, primarily due to early lease terminations and fully depreciated assets; and

Current wording

•A decrease of $0.3 million attributable to the Same Property Portfolio, primarily due to early lease terminations and fully depreciated assets; and

Previous wording

Interest income decreased $12.1 million, or 91.4%, for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, primarily due to carrying lower balances in our interest-bearing accounts.

Current wording

Interest income decreased $9.6 million, or 94.9%, for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024, primarily due to carrying lower balances in our interest-bearing accounts.

Previous wording

Gross interest expense, before the effect of capitalized interest, decreased $7.0 million, or 11.9%, for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, due to a decrease in the average outstanding debt balance for the three months ended March 31, 2025.

Current wording

Gross interest expense, before the effect of capitalized interest, decreased $5.1 million, or 8.9%, for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024, primarily due to a decrease in the average outstanding debt balance for the three months ended June 30, 2025.

Previous wording

Capitalized interest increased $0.7 million, or 3.7%, for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, primarily due to an increase in the average aggregate cost basis on in-process development and redevelopment projects and future development pipeline projects during the three months ended March 31, 2025. During the three months ended March 31, 2025 and 2024, we capitalized interest on in-process development and redevelopment projects and future development pipeline projects with an average aggregate cost basis of approximately $1.9 billion and $1.8 billion, respectively. Capitalized interest will vary based on the current status of active development or redevelopment projects and our future development pipeline. For additional information about the potential impact of inflation on our interest expense and construction costs, and the impact on our business, financial condition, results of operations, cash flows, liquidity, and ability to satisfy our debt service obligations, refer to “Part I, Item IA. Risk Factors” in our annual report on Form 10-K for the year ended December 31, 2024.

Current wording

Capitalized interest increased $0.8 million, or 4.0%, for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024, primarily due to an increase in the average aggregate cost basis on in-process development and redevelopment projects and future development pipeline projects during the three months ended June 30, 2025. Capitalized interest will vary based on the current status of active development or redevelopment projects and our future development pipeline. For additional information about the potential impact of inflation on our interest expense and construction costs, and the impact on our business, financial condition, results of operations, cash flows, liquidity, and ability to satisfy our debt service obligations, refer to “Part I, Item IA. Risk Factors” in our annual report on Form 10-K for the year ended December 31, 2024.

Previous wording

Net income attributable to noncontrolling interests in consolidated property partnerships decreased $1.0 million, or 18.6%, for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, primarily due to the burn-off of straight line rent for aging leases and lower restoration and settlement fee income. The amounts reported for the three months ended March 31, 2025 and 2024 are comprised of the noncontrolling interest’s share of net income for 100 First LLC and 303 Second LLC and the noncontrolling interest’s share of net income for Redwood City Partners, LLC. See Note 1 “Organization, Ownership, and Basis of Presentation” to our consolidated financial statements included in this report for additional information.

Current wording

Net income attributable to noncontrolling interests in consolidated property partnerships increased $5.6 million, or 114.4%, for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024, primarily due to lease termination fee income from one tenant in 2025. The amounts reported for the three months ended June 30, 2025 and 2024 are comprised of the share of net income attributable to noncontrolling interests for 100 First LLC, 303 Second LLC, and Redwood LLC. See Note 1 “Organization, Ownership, and Basis of Presentation” to our consolidated financial statements included in this report for additional information.