Kilroy Lands $375M Loan

The entire One Paseo campus occupies 36 acres in San Diego’s Del Mar submarket. Image courtesy of JLL

Kilroy Realty Corp. has obtained a $375 million loan from New York Life Insurance Co., secured by part of the company’s One Paseo mixed-use property in San Diego. JLL arranged the 11-year, interest-only note at a 5.9 percent fixed rate. Proceeds will serve general corporate purposes and development funding, as well as the company’s December 2024 unsecured bond maturity.

Allen Matkins advised Kilroy in the transaction. The law firm was also recently instrumental in negotiating a 206,000-square-foot office lease in Los Angeles’ Century City.

As of June, Kilroy’s portfolio amounted to 16.2 million square feet of office and life science space located in San Diego, Greater Los Angeles, the Bay Area, the Pacific Northwest and Austin, Texas. One of the firm’s properties, a 656,000-square-foot life science facility in South San Francisco, came online last year as the largest office delivery in the metro.

One Paseo, up close

Occupying 36 acres in the Del Mar submarket, One Paseo encompasses roughly 1.4 million square feet of office, retail and residential space. The LEED Gold-certified office component totals some 600,000 square feet across five buildings.

The 23-acre section serving as collateral for the current financing comprises two office buildings and 95,000 square feet of retail space, along with 608 residential units. Its components came online in phases, between 2019 and 2021.

The two office buildings rise four and six stories, spanning a combined 286,000 square feet, CommercialEdge data shows. Tenants include Bank of America, Cushman & Wakefield, JP Morgan Chase and McCarthy Building Cos., according to the same source.

Located at 3275 Del Mar Heights Road, the property is just east of Interstate 5, roughly 19 miles north of downtown San Diego. The campus is across from Del Mar Highlands Town Center shopping mall.

JLL Directors Charlie Vorsheck and Samuel Godfrey, along with Senior Managing Director Greg Brown, led the Capital Markets Advisory team that arranged the financing.