Kilroy Realty Developing $315M LinkedIn Campus

Kilroy Realty Corporation (KRC) announced this month that it had acquired a 12-acre site in Sunnyvale, California to develop, own and manage a $315 million campus for LinkedIn Corporation, operator of the world's largest professional network on the internet. Under a 12-year lease agreement, KRC will develop a state-of-the-art 587,000 square-foot office project for LinkedIn, with three mid-rise Class A office buildings and a parking structure designed and pre-certified to meet LEED Silver requirements. Sherman Chan and Bob Steinbock, both senior vice presidents at CBRE, acted as investment brokers in the transaction. Attorneys with the law firm Allen Matkins represented both Kilroy Realty and the seller, according to a CoStar report.

"We're delighted to partner with LinkedIn in the creation of a new LEED-certified office facility," said John Kilroy, Jr., KRC's President and Chief Executive Officer. "This is another opportunity for us to create significant value for our shareholders through the development of the highest quality real estate at superior returns."

Eli Khouri, KRC's Chief Investment Officer, added: "This transaction is the fourth of its kind in 2012 where KRC has agreed to develop, from the ground up, new state-of-the-art buildings for leading technology companies in the Bay Area. These types of opportunities have arisen from KRC's strategy of acquiring superior locations in the best submarkets where we can offer superb space to the region's premier tenants."

Sunnyvale, with a Class A total vacancy rate of less than 5%, is a highly sought after location for tenants seeking to cluster around major technology firms, including Apple, Yahoo!, AMD and now, LinkedIn. Average asking rents for Class A office space in Sunnyvale stood at $4.01 per square foot as of the third quarter of this year, according to Cassidy Turley. LinkedIn already is in roughly 76,000 square feet on the site at 599 Mathilda Ave., and that building is expected to remain, according to a San Jose Business Journal article.

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