Kilroy Realty is in the process of selling a four-building campus in Silicon Valley for $365M, or $550 per SF, Chief Financial Officer Elliot Trencher told investors on a Tuesday earnings call.
Apple is the buyer, unnamed sources told the San Francisco Chronicle.
This marks the tech company's third major office deal this year, including the late June purchase of a three-building Cupertino campus for $167M.
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Trencher did not identify the buyer or the campus, which is located at 599 North Mathilda Ave. in Sunnyvale. Apple is already a tenant at the property, where it leases approximately 581K SF, according to the Chronicle.
"One of the vacant buildings [at the Mathilda complex] is 25 years old and requires both base building capital and leasing capital, Trencher said.
"The other has been leased by a single tenant and requires leasing capital, all of which adds up to a significant spend in a market that has seen pressure on rents in recent years," he added.
The sale is slated to close in the third quarter, Trencher said.
Kilroy also announced it completed the sale of 501 Santa Monica Blvd., an approximately 80K SF office building in West L.A., in June. It also has a pending $38M land sale at Santa Fe Summit in San Diego and a $41M deal to sell land at 1633 26th St. in Santa Monica.
The company did not announce any acquisitions and has been focused on selectively selling office properties in its portfolio.
Kilroy's revenue was up year-over-year for the second quarter and for the first half of the year. Net income attributable to common stockholders was also up year-over-year in Q2 and the first six months of 2025.
Kilroy's leasing was also up in Q2. The firm signed approximately 423K SF of leases, well above the 248K SF of leases it inked in Q1 and the roughly 235K SF of leases it signed in Q2 2024.
But occupancy slumped. The company's stabilized portfolio was 80.8% occupied and 83.5% leased as of June 30. At the same time last year, the portfolio was 83.7% occupied and 85.4% leased.
Kilroy CEO Angela Aman struck a positive tone on the leasing front, especially in San Francisco, where AI companies are growing and fueling a revival of the office market. The company had anticipated a second-quarter slump due to a number of tenant financial issues, such as bankruptcies and downsizings, Aman said.
"We appear to be at the tail end of major space givebacks by big tech companies, and the market can now benefit from the substantial growth and expansion of companies in the AI space," Aman said on the call.
On the life sciences front, Kilroy's reported 100K SF of active lease negotiations at Oyster Point in San Francisco, the firm's "premier development project in the heart of the South San Francisco Life Science ecosystem," Aman said.
Those lease negotiations come "even despite, you know, some headwinds from a life science broader ecosystem perspective," Aman said.
South San Francisco was a significant growth market for life sciences last year, with nearly 1.3M SF of new product delivered in 2024 and 1.2M SF under construction. But it was not spared as life sciences demand broadly pumped the brakes, and now new deliveries in South San Francisco are coming online and pushing up vacancy as they meet sluggish demand.
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