Kilroy Secures $375M in Financing for Big San Diego Mixed-Use Campus
New York Life Insurance provided the 11-year loan with a fixed rate of 5.9 percent
By Greg Cornfield August 1, 2023 4:35 pm
reprints
Landlord and developer Kilroy Realty has secured a $375 million non-recourse loan from New York Life Insurance Company for a portion of a large mixed-use complex named One Paseo in San Diego.
The real estate investment trust (REIT) announced it landed the 11-year fixed-rate loan at a rate of 5.9 percent on an interest-only basis, and it matures on August 10, 2034. It covers a 23-acre portion of Kilroy’s larger campus that was developed in phases from 2019-2021. The portion includes two office buildings, 608 apartment units and more than 95,000 square feet of retail.
It’s at 3725 Paseo Place in San Diego’s Del Mar submarket. The loan will go toward “general corporate purposes,” including development and reserving funds to address its December 2024 unsecured bond maturity.
“Against a challenging capital market backdrop, we are very pleased with this loan execution, which further fortifies our already strong balance sheet and liquidity position, while establishing a new partnership with a world class life insurance company,” John Kilroy, the company’s CEO, said in a statement.
JLL (JLL) and Allen Matkins advised Kilroy on the transaction.
Kilroy’s portfolio totaled approximately 16.2 million square feet of primarily office and life science space that was 86.6 percent occupied and 88.6 percent leased, as of June 30. The REIT also has more than 1,000 residential units in Hollywood and San Diego, which had a quarterly average occupancy of 92.7 percent.
Gregory Cornfield can be reached at gcornfield@commercialobserver.com.
