Exhibit 99.1

Third Quarter 2004 Supplemental Financial Report

Some of the enclosed information presented in this supplemental and on the Company’s October 26, 2004 conference call is forward-looking in nature, including information concerning project development timing and investment amounts. Although the information is based on Kilroy Realty Corporation’s current expectations, actual results could vary from expectations stated here. Numerous factors will affect Kilroy Realty Corporation’s actual results, some of which are beyond its control. These include the timing and strength of regional economic growth, the strength of commercial and industrial real estate markets, competitive market conditions, future interest rate levels and capital market conditions. You are cautioned not to place undue reliance on this information, which speaks only as of the date of this report. Kilroy Realty Corporation assumes no obligation to update publicly any forward-looking information, whether as a result of new information, future events or otherwise, except to the extent it is required to do so in connection with its ongoing requirements under Federal securities laws to disclose material information. For a discussion of important risks related to Kilroy Realty Corporation’s business, and an investment in its securities, including risks that could cause actual results and events to differ materially from results and events referred to in the forward-looking information, see the discussion under the caption “Business Risks” in Kilroy Realty Corporation’s annual report on Form 10-K for the year ended December 31, 2003. In light of these risks, uncertainties and assumptions, the forward-looking events contained in this supplemental information and on the Company’s October 26, 2004 conference call might not occur.

Kilroy Realty Corporation

Third Quarter 2004 Supplemental Financial Report

Table of Contents

		Page
Corporate Data and Financial Highlights
Company Background		1
Financial Highlights		2
Common Stock Data		3
Consolidated Balance Sheets		4
Consolidated Statements of Operations		5
Funds From Operations and Funds Available for Distribution		6
Portfolio Data
Same Store Analysis		7
Stabilized Portfolio Occupancy Overview		8-11
Leasing Activity		12
Stabilized Portfolio Capital Expenditures		13
Lease Expiration Summary and Lease Expirations by Region		14-17
Top Ten Office and Top Ten Industrial Tenants		18
Summary of Tenants Representing 5.0% or Greater of Annual Base Rental Revenue		19
Acquisitions & Dispositions		20
Development
Stabilized Development Projects		21
In-Process and Committed Development and Redevelopment Projects		22
Future Development Pipeline		23
Debt and Capitalization Data
Capital Structure		24
Debt Analysis		25-26
Non-GAAP Supplemental Measures		27-31

Kilroy Realty Corporation

Third Quarter 2004 Supplemental Financial Report

Company Background

Kilroy Realty Corporation (NYSE: KRC) owns, develops, and operates office and industrial real estate, primarily in Southern California. The Company operates as a self-administered real estate investment trust. As of September 30, 2004, the Company’s stabilized portfolio consisted of 82 office buildings and 49 industrial buildings, which encompassed an aggregate of 7.4 million and 4.6 million square feet, respectively, and was 93.1% occupied.

Board of Directors		Senior Management				Investor Relations
John B. Kilroy, Sr. Chairman		John B. Kilroy, Jr.		President and CEO		12200 W. Olympic Blvd, Suite 200
Edward F. Brennan, PhD.		Jeffrey C. Hawken		Executive VP and COO		Los Angeles, CA 90064
John R. D’Eathe		Richard E. Moran Jr.		Executive VP and CFO		(310) 481-8400
William P. Dickey		Conan Cotrell		Sr. VP Marketing and Leasing		Web: www.kilroyrealty.com
Matthew J. Hart		John T. Fucci		Sr. VP Asset Management		E-mail: investorrelations@kilroyrealty.com
John B. Kilroy, Jr.		Tyler H. Rose		Sr. VP and Treasurer
Dale F. Kinsella		Steve Scott		Sr. VP San Diego Development
		Justin W. Smart		Sr. VP Los Angeles Development
		Ann Marie Whitney		Sr. VP and Controller

Equity Research Coverage

A.G. Edwards & Sons, Inc.				Merrill Lynch & Co., Inc.
David AuBuchon		(314) 955-5452		Steve Sakwa		(212) 449-0335
Bank of America Securities				Prudential Securities
Ross Nussbaum		(212) 847-5668		Jim Sullivan		(212) 778-2515
Deutsche Bank Securities, Inc.				RBC Capital Markets
Lou Taylor		(212) 250-4912		David Copp		(415) 633-8558
Friedman, Billings, Ramsey & Co., Inc.				UBS Securities
David Loeb		(703) 469-1289		Keith Mills		(212) 713-3098
Green Street Advisors				Wells Fargo Securities
Jim Sullivan		(949) 640-8780		Christopher Hartung		(415) 675-2759
KeyBanc Capital Markets
Frank Greywitt		(216) 263-4795

1

Kilroy Realty Corporation

Third Quarter 2004 Supplemental Financial Report

Financial Highlights

(unaudited, $ in thousands, except per share amounts)

		Three Months Ended
		9/30/2004				6/30/2004				3/31/2004				12/31/2003				9/30/2003
INCOME ITEMS (Including Discontinued Operations):
Revenues		$	55,412			$	54,925			$	55,422			$	54,205			$	70,062
Net Straight Line Rent (1)			3,004				2,199				2,484				2,790				700
Lease Termination Fees (2)			(310	)			95				901				654				18,325
Net Operating Income (3), (4)			42,495				41,156				41,810				40,804				55,007
Capitalized Interest and Loan Fees			2,260				2,061				2,050				2,024				2,486
Net Income Available to Common Shareholders			10,357				7,854				5,984				4,938				20,039
EBITDA (4), (5), (7)			33,173				35,984				34,424				33,062				49,954
Funds From Operations (4), (6), (7)			20,185				23,385				20,956				20,197				37,473
Funds Available for Distribution (4), (6), (7), (8)			14,508				17,124				17,168				15,397				29,274
Net Income per common share – diluted		$	0.36			$	0.28			$	0.21			$	0.18			$	0.72
Funds From Operations per common share – diluted		$	0.62			$	0.72			$	0.65			$	0.62			$	1.17
Dividend per share		$	0.495			$	0.495			$	0.495			$	0.495			$	0.495
RATIOS (Including Discontinued Operations):
Operating Margins			76.7	%			74.9	%			75.4	%			75.3	%			78.5	%
Interest Coverage Ratio (9)			3.5x				3.9x				3.7x				3.6x				5.6x
Fixed Charge Coverage Ratio (10)			2.6x				2.9x				2.8x				2.6x				4.1x
FFO Payout Ratio (11)			79.7	%			68.8	%			76.7	%			79.3	%			42.6	%
FAD Payout Ratio (12)			110.9	%			93.9	%			93.6	%			104.0	%			54.5	%
		9/30/2004				6/30/2004				3/31/2004				12/31/2003				9/30/2003
ASSETS:
Real Estate Held for Investment before Depreciation		$	1,730,705			$	1,723,994			$	1,711,852			$	1,726,286			$	1,707,220
Total Assets			1,479,379				1,490,135				1,509,365				1,512,635				1,505,973
CAPITALIZATION:
Total Debt		$	730,932			$	754,806			$	767,294			$	761,048			$	750,839
Total Preferred Equity (13)			160,250				160,250				160,250				160,250				155,000
Total Market Equity Value (13)			1,236,675				1,107,544				1,152,889				1,059,904				920,526
Total Market Capitalization (13)			2,127,857				2,022,600				2,080,433				1,981,203				1,826,365
Total Debt / Total Market Capitalization			34.4	%			37.3	%			37.0	%			38.5	%			41.2	%
Total Debt and Preferred / Total Market Capitalization			41.9	%			45.2	%			44.7	%			46.6	%			49.7	%

(1) Represents the straight-line rent recognized during the period offset by cash received during the period that was applied to deferred rents receivable balances for terminated leases.

(2) Lease termination fees for the three months ended September 30, 2004 include a $0.4 million net charge related to the resolution of contingencies associated with a 2001 early lease termination. Lease termination fees for the three months ended September 30, 2003 include an $18.0 lease termination fee related to a settlement with Peregrine Systems, Inc. Approximately $2.6 million of this fee was reserved for financial reporting purposes through the provision for bad debts as it related to future annual payments due from Peregrine under the settlement agreement.

(3) Net Operating Income is defined as operating revenues (rental income, tenant reimbursements and other property income) less property and related expenses (property expenses, real estate taxes, provision for bad debts and ground leases) and excludes interest income and expense, depreciation and amortization, and corporate general and administrative expenses.

(4) Please refer to pages 27 and 28 for Management Statements on Net Operating Income, EBITDA before minority interests, Funds From Operations and Funds Available for Distribution.

(5) EBITDA is reported before minority interests and net gain (loss) on dispositions. Please refer to page 30 for a reconciliation of GAAP net income to EBITDA before minority interests.

(6) Please refer to page 6 for a reconciliation of GAAP Net Income to Funds From Operations and Funds Available for Distribution.

(7) Reported amounts are attributable to common shareholders and unitholders.

(8) Please refer to page 31 for Reconciliation of Funds Available for Distribution to GAAP Net Cash Provided by Operating Activities.

(9) Calculated as EBITDA before minority interests divided by total interest expense, including discontinued operations.

(10) Calculated as EBITDA before minority interests divided by total interest expense, including discontinued operations, current year accrued preferred dividends and distributions on Cumulative Redeemable Preferred units.

(11) Calculated as current year dividends accrued to common shareholders divided by Funds From Operations.

(12) Calculated as current year dividends accrued to common shareholders divided by Funds Available for Distribution.

(13) See “Capital Structure” on page 24.

2

Kilroy Realty Corporation

Third Quarter 2004 Supplemental Financial Report

Common Stock Data (NYSE: KRC)

		For the Three Months Ended
		9/30/2004			6/30/2004			3/31/2004			12/31/2003			9/30/2003
High Price		$	38.47		$	36.13		$	35.50		$	33.55		$	29.38
Low Price		$	34.08		$	30.62		$	31.68		$	27.83		$	27.14
Closing Price		$	38.03		$	34.10		$	35.50		$	32.75		$	28.55
Dividend per share - annualized		$	1.98		$	1.98		$	1.98		$	1.98		$	1.98
Closing common shares (in 000’s)(1)			28,528			28,398			28,328			28,209			28,029
Closing partnership units (in 000’s)(1)			3,990			4,082			4,148			4,154			4,214
			32,518			32,480			32,476			32,363			32,243

(1) As of the end of the period.

3

Kilroy Realty Corporation

Third Quarter 2004 Supplemental Financial Report

Consolidated Balance Sheets

(unaudited, $ in thousands)

		9/30/2004				6/30/2004				3/31/2004				12/31/2003				9/30/2003
ASSETS:
Land and improvements		$	288,861			$	289,258			$	289,317			$	289,730			$	289,730
Buildings and improvements, net			1,357,626				1,306,576				1,297,624				1,305,145				1,291,698
Undeveloped land and construction in progress, net			84,218				128,160				124,911				131,411				125,792
Total real estate held for investment			1,730,705				1,723,994				1,711,852				1,726,286				1,707,220
Accumulated depreciation and amortization			(353,025	)			(341,874	)			(329,409	)			(321,372	)			(308,640	)
Real estate held for investment, net			1,377,680				1,382,120				1,382,443				1,404,914				1,398,580
Property held for sale, net			—				—				18,303				—				—
Total real estate assets, net			1,377,680				1,382,120				1,400,746				1,404,914				1,398,580
Cash and cash equivalents			3,652				7,444				6,730				9,892				16,078
Restricted cash			1,283				7,352				9,785				8,558				8,797
Current receivables, net			4,190				4,700				5,988				4,919				2,424
Deferred rent receivables, net			43,956				41,134				39,288				36,804				34,014
Deferred leasing costs, net			39,420				37,824				36,094				36,651				35,703
Deferred financing costs, net			3,190				2,889				3,318				3,657				4,297
Prepaid expenses and other assets			6,008				6,672				7,416				7,240				6,080
TOTAL ASSETS		$	1,479,379			$	1,490,135			$	1,509,365			$	1,512,635			$	1,505,973
LIABILITIES AND STOCKHOLDERS’ EQUITY:
Liabilities:
Secured debt		$	494,932			$	614,806			$	617,294			$	526,048			$	528,839
Unsecured senior notes			144,000
Unsecured line of credit			92,000				140,000				150,000				235,000				222,000
Accounts payable, accrued expenses and other liabilities			52,889				36,633				40,908				41,147				42,596
Accrued distributions			16,498				16,478				16,477				16,369				15,960
Rents received in advance, tenant security deposits and deferred revenue			19,974				20,361				19,332				20,904				21,570
Total liabilities			820,293				828,278				844,011				839,468				830,965
Minority Interests:
7.450% Series A Cumulative Redeemable Preferred unitholders(1)			73,638				73,638				73,653				73,716				73,716
9.375% Series C Cumulative Redeemable Preferred unitholders			—				—				—				—				34,464
9.250% Series D Cumulative Redeemable Preferred unitholders			44,321				44,321				44,321				44,321				44,321
Common unitholders of the Operating Partnership			61,782				63,640				65,094				66,502				68,142
Total minority interests			179,741				181,599				183,068				184,539				220,643
Stockholders’ Equity:
7.800% Series E Cumulative Redeemable Preferred stock			38,425				38,425				38,437				38,437				—
Common stock			286				284				283				282				280
Additional paid-in capital			515,086				512,994				512,359				508,568				505,743
Deferred compensation			(1,929	)			(2,445	)			(2,839	)			(852	)			(1,313	)
Distributions in excess of earnings			(71,456	)			(67,689	)			(61,487	)			(53,449	)			(44,423	)
Accumulated net other comprehensive loss			(1,067	)			(1,311	)			(4,467	)			(4,358	)			(5,922	)
Total stockholders’ equity			479,345				480,258				482,286				488,628				454,365
TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY		$	1,479,379			$	1,490,135			$	1,509,365			$	1,512,635			$	1,505,973

(1) On March 5, 2004, the Company amended the terms of its Series A Cumulative Redeemable Preferred Units (“Series A Preferred Units”) to reduce the distribution rate and extend the redemption date to September 30, 2009. Commencing March 5, 2004, distributions on the Series A Preferred Units accrued at an annual rate of 7.45%. Prior to March 5, 2004, distributions on the Series A Preferred Units accrued at an annual rate of 8.075%.

4

Kilroy Realty Corporation

Third Quarter 2004 Supplemental Financial Report

Consolidated Statements of Operations

(unaudited, $ in thousands, except per share amounts)

		Three Months Ended September 30,											Nine Months Ended September 30,
		2004				2003				% Change			2004				2003				% Change
REVENUES:
Rental income		$	50,501			$	45,870			10.1	%		$	147,127			$	131,695			11.7	%
Tenant reimbursements			4,817				4,472			7.7	%			15,370				14,845			3.5	%
Other property income			(273	)			18,441			(101.5	%)			875				23,312			(96.2	%)
Total revenues			55,045				68,783			(20.0	%)			163,372				169,852			(3.8	%)
EXPENSES:
Property expenses			8,620				7,738			11.4	%			25,904				23,261			11.4	%
Real estate taxes			4,423				3,869			14.3	%			12,631				11,197			12.8	%
Provision for bad debts			(524	)			2,749			(119.1	%)			116				1,662			(93.0	%)
Ground leases			334				326			2.5	%			996				970			2.7	%
General and administrative expenses			9,399				5,089			84.7	%			22,342				13,231			68.9	%
Interest expense			9,540				8,869			7.6	%			27,898				24,143			15.6	%
Depreciation and amortization			14,832				14,299			3.7	%			43,317				40,685			6.5	%
Total expenses			46,624				42,939			8.6	%			133,204				115,149			15.7	%
OTHER INCOME:
Interest and other income			77				36			113.9	%			462				130			255.4	%
Total other income			77				36			113.9	%			462				130			255.4	%
INCOME FROM CONTINUING OPERATIONS BEFORE MINORITY INTERESTS			8,498				25,880			(67.2	%)			30,630				54,833			(44.1	%)
MINORITY INTERESTS:
Distributions on Cumulative Redeemable Preferred units			(2,437	)			(3,375	)		(27.8	%)			(7,396	)			(10,125	)		(27.0	%)
Minority interest in earnings of Operating Partnership attributable to continuing operations			(564	)			(2,983	)		(81.1	%)			(2,642	)			(5,947	)		(55.6	%)
Total minority interests			(3,001	)			(6,358	)		(52.8	%)			(10,038	)			(16,072	)		(37.5	%)
INCOME FROM CONTINUING OPERATIONS			5,497				19,522			(71.8	%)			20,592				38,761			(46.9	%)
DISCONTINUED OPERATIONS:
Revenues from discontinued operations			367				1,279			(71.3	%)			2,386				5,667			(57.9	%)
Expenses from discontinued operations			(117	)			(638	)		(81.7	%)			(989	)			(2,891	)		(65.8	%)
Net gain (loss) on disposition of discontinued operations			6,212				(48	)		(13041.7	%)			6,148				3,642			68.8	%
Impairment loss on property held for sale			—				—			—				(726	)			—			100.0	%
Minority interest attributable to discontinued operations			(817	)			(76	)		975.0	%			(862	)			(854	)		0.9	%
Total income from discontinued operations			5,645				517			991.9	%			5,957				5,564			7.1	%
NET INCOME			11,142				20,039			(44.4	%)			26,549				44,325			(40.1	%)
PREFERRED DIVIDENDS			(785	)			—			100.0	%			(2,355	)			—			100.0	%
NET INCOME AVAILABLE FOR COMMON SHAREHOLDERS		$	10,357			$	20,039			(48.3	%)		$	24,194			$	44,325			(45.4	%)
Weighted average shares outstanding - basic			28,271				27,584			2.5	%			28,203				27,387			3.0	%
Weighted average shares outstanding - diluted			28,440				27,801			2.3	%			28,369				27,593			2.8	%
NET INCOME PER COMMON SHARE:
Net income per common share - basic		$	0.37			$	0.73			(49.3	%)		$	0.86			$	1.62			(46.9	%)
Net income per common share - diluted		$	0.36			$	0.72			(50.0	%)		$	0.85			$	1.61			(47.2	%)

5

Kilroy Realty Corporation

Third Quarter 2004 Supplemental Financial Report

Funds From Operations and Funds Available for Distribution

(unaudited, $ in thousands, except per share amounts)

		Three Months Ended September 30,											Nine Months Ended September 30,
		2004				2003				% Change			2004				2003				% Change
FUNDS FROM OPERATIONS: (1)
Net income available to common shareholders		$	10,357			$	20,039			(48.3	%)		$	24,194			$	44,325			(45.4	%)
Adjustments:
Minority interest in earnings of Operating Partnership			1,381				3,059			(54.9	%)			3,504				6,801			(48.5	%)
Depreciation and amortization of real estate assets			14,659				14,327			2.3	%			42,974				41,200			4.3	%
Net (gain) loss on dispositions of operating properties			(6,212	)			48			(13041.7	%)			(6,148	)			(3,642	)		68.8	%
Funds From Operations (2)		$	20,185			$	37,473			(46.1	%)		$	64,524			$	88,684			(27.2	%)
Weighted average common shares/units outstanding - basic			32,327				31,799			1.7	%			32,304				31,609			2.2	%
Weighted average common shares/units outstanding - diluted			32,495				32,015			1.5	%			32,469				31,816			2.1	%
FFO per common share/unit - basic		$	0.62			$	1.18			(47.5	%)		$	2.00			$	2.81			(28.8	%)
FFO per common share/unit - diluted		$	0.62			$	1.17			(47.0	%)		$	1.99			$	2.79			(28.7	%)
FUNDS AVAILABLE FOR DISTRIBUTION: (1)
Funds From Operations		$	20,185			$	37,473			(46.1	%)		$	64,524			$	88,684			(27.2	%)
Adjustments:
Amortization of deferred financing costs			840				620			35.5	%			2,397				1,721			39.3	%
Non-cash amortization of restricted stock grants			793				678			17.0	%			2,526				2,358			7.1	%
Impairment loss on property held for sale			—				—			0.0	%			726				—			100.0	%
Tenant improvements, leasing commissions and recurring capital expenditures			(4,306	)			(8,797	)		(51.1	%)			(13,688	)			(17,652	)		(22.5	%)
Net effect of straight-line rents (3)			(3,004	)			(700	)		329.1	%			(7,687	)			(5,221	)		47.2	%
Funds Available for Distribution (2)		$	14,508			$	29,274			(50.4	%)		$	48,798			$	69,890			(30.2	%)

(1) See page 27 for Management Statements on Funds From Operations and Funds Available for Distribution.

(2) Reported amounts are attributable to common shareholders and unitholders.

(3) Represents the straight-line rent income recognized during the period offset by cash received during the period that was applied to deferred rents receivable balances for terminated leases.

6

Kilroy Realty Corporation

Third Quarter 2004 Supplemental Financial Report

Same Store Analysis ⁽¹⁾

(unaudited, $ in thousands)

Same Store Analysis (GAAP Basis)

		Three Months Ended September 30,											Nine Months Ended September 30,
		2004				2003				% Change			2004				2003				% Change
Total Same Store Portfolio
Number of properties			125				125							125				125
Square Feet			11,230,191				11,230,191							11,230,191				11,230,191
Percent of Stabilized Portfolio			93.6	%			92.1	%						93.6	%			92.1	%
Average Occupancy			94.7	%			92.8	%						93.6	%			92.5	%
Operating Revenues:
Rental income		$	44,640			$	42,450			5.2	%		$	131,612			$	124,145			6.0	%
Tenant reimbursements			4,689				4,530			3.5	%			15,097				14,270			5.8	%
Other income			(275	)			18,440			(101.5	%)			851				19,040			(95.5	%)
Total operating revenues			49,054				65,420			(25.0	%)			147,560				157,455			(6.3	%)
Operating Expenses:
Property expenses			7,703				6,959			10.7	%			23,098				21,655			6.7	%
Real estate taxes			3,756				3,624			3.6	%			11,052				10,523			5.0	%
Provision for bad debts			(421	)			2,685			(115.7	%)			(33	)			2,195			(101.5	%)
Ground leases			333				326			2.1	%			996				956			4.2	%
Total operating expenses			11,371				13,594			(16.4	%)			35,113				35,329			(0.6	%)
GAAP Net Operating Income(2)		$	37,683			$	51,826			(27.3	%)		$	112,447			$	122,126			(7.9	%)
Same Store Analysis (Cash Basis)
		Three Months Ended September 30,											Nine Months Ended September 30,
		2004				2003				% Change			2004				2003				% Change
Total operating revenues		$	46,937			$	62,976			(25.5	%)		$	142,179			$	151,262			(6.0	%)
Total operating expenses			11,371				13,594			(16.4	%)			35,113				35,329			(0.6	%)
Cash Net Operating Income		$	35,566			$	49,382			(28.0	%)		$	107,066			$	115,933			(7.6	%)

(1) Same store defined as all stabilized properties owned at January 1, 2003 and still owned and in the stabilized portfolio at September 30, 2004.

(2) Net operating income for the three and nine months ended September 30, 2003 includes a $18.0 million lease termination fee related to the settlement with Peregrine Systems, Inc. Approximately $2.6 million of this fee was reserved 100% through the provision for bad debts as it related to future installment payments due from Peregrine under the settlement agreement. Net operating income for the three and nine months ended September 30, 2004 includes a $0.4 million net charge related to the resolution of contingencies associated with a 2001 early lease termination and a $0.8 million reduction to the provision for bad debts related to the collection of the first annual installment payment made by Peregrine. Excluding these amounts, the changes in same store Net Operating Income would have been as follows:

		Three Months Ended September 30,			Nine Months Ended September 30,
Total Operating Revenues		4.5	%		6.2	%
Total Operating Expenses		10.6	%		9.7	%
GAAP Net Operating Income		2.7	%		5.1	%
Cash Net Operating Income		3.8	%		6.2	%

7

Kilroy Realty Corporation

Third Quarter 2004 Supplemental Financial Report

Stabilized Portfolio Occupancy Overview

		# of Buildings		Portfolio Breakdown						Total Square Feet		Occupancy at:
				NOI			Sq. Ft.					9/30/2004			6/30/2004			12/31/2003
STABILIZED PORTFOLIO:
OCCUPANCY BY PRODUCT TYPE:
Office:
Los Angeles		26		35.8	%		24.0	%		2,872,925		89.4	%		84.6	%		82.4	%
Orange County		7		3.1	%		3.2	%		387,327		97.5	%		93.0	%		80.0	%
San Diego		41		38.0	%		27.1	%		3,253,382		96.4	%		94.4	%		92.3	%
Other		8		3.9	%		7.3	%		878,960		91.5	%		90.8	%		91.1	%
Subtotal		82		80.8	%		61.6	%		7,392,594		93.2	%		90.0	%		87.6	%
Industrial:
Los Angeles		4		1.9	%		3.2	%		388,805		51.0	%		70.7	%		70.7	%
Orange County		43		16.1	%		32.7	%		3,917,345		96.6	%		96.8	%		96.3	%
Other		2		1.2	%		2.5	%		295,417		100.0	%		100.0	%		100.0	%
Subtotal		49		19.2	%		38.4	%		4,601,567		92.9	%		94.9	%		94.5	%
OCCUPANCY BY REGION:
Los Angeles		30		37.7	%		27.2	%		3,261,730		84.8	%		82.9	%		81.0	%
Orange County		50		19.2	%		35.9	%		4,304,672		96.6	%		96.5	%		94.9	%
San Diego		41		38.0	%		27.1	%		3,253,382		96.4	%		94.4	%		92.3	%
Other		10		5.1	%		9.8	%		1,174,377		93.7	%		93.1	%		93.1	%
TOTAL STABILIZED PORTFOLIO		131		100.0	%		100.0	%		11,994,161		93.1	%		92.0	%		90.3	%

AVERAGE OCCUPANCY - STABILIZED PORTFOLIO

		Office			Industrial			Total
Quarter-to-Date		92.5	%		94.2	%		93.2	%
Year-to-Date		90.2	%		94.4	%		91.9	%

8

Kilroy Realty Corporation

Third Quarter 2004 Supplemental Financial Report

Stabilized Portfolio Occupancy Overview

		City/ Submarket		# of Buildings		Square Feet		Occupancy
Office:
Los Angeles, California
23925 Park Sorrento		Calabasas		1		11,789		100.0	%
23975 Park Sorrento		Calabasas		1		100,592		100.0	%
24025 Park Sorrento		Calabasas		1		102,264		100.0	%
26541 Agoura Road		Calabasas		1		90,878		92.4	%
181/185 S. Douglas Street		El Segundo		1		61,604		47.0	%
Kilroy Airport Center, El Segundo		El Segundo		3		699,192		98.3	%
999 N. Sepulveda Blvd.		El Segundo		1		133,339		31.7	%
525 N. Brand Blvd.		Glendale		1		46,043		100.0	%
Kilroy Airport Center, Long Beach		Long Beach		7		949,063		90.6	%
12200 W. Olympic Blvd.		Los Angeles		1		151,019		95.2	%
12100 W. Olympic Blvd.		Los Angeles		1		151,000		64.0	%
12312 W. Olympic Blvd.		Los Angeles		1		78,000		100.0	%
1633 26th Street		Santa Monica		1		44,915		100.0	%
2100 Colorado Avenue		Santa Monica		3		94,844		100.0	%
3130 Wilshire Blvd.		Santa Monica		1		88,338		91.5	%
501 Santa Monica Blvd.		Santa Monica		1		70,045		95.1	%
Total Los Angeles Office				26		2,872,925		89.4	%
Orange County, California
4175 E. La Palma Avenue		Anaheim		1		43,263		86.6	%
8101 Kaiser Blvd.		Anaheim		1		60,177		100.0	%
601 Valencia		Brea		1		60,891		100.0	%
9451 Toledo Way		Irvine		1		27,200		100.0	%
111 Pacifica		Irvine Spectrum		1		67,530		94.0	%
2501 Pullman		Santa Ana		1		51,750		100.0	%
1700 E. Carnegie		Santa Ana		1		76,516		100.0	%
Total Orange County Office				7		387,327		97.5	%

9

Kilroy Realty Corporation

Third Quarter 2004 Supplemental Financial Report

Stabilized Portfolio Occupancy Overview

		City/ Submarket		# of Buildings		Square Feet		Occupancy
Office:
San Diego, California
12340 El Camino Real		Del Mar		1		88,181		76.8	%
12390 El Camino Real		Del Mar		1		72,332		100.0	%
12348 High Bluff Drive		Del Mar		1		38,710		100.0	%
12400 High Bluff Drive		Del Mar		1		208,464		84.3	%
3579 Valley Center Drive		Del Mar		1		52,375		100.0	%
3611 Valley Center Drive		Del Mar		1		130,178		100.0	%
3661 Valley Center Drive		Del Mar		1		129,752		100.0	%
3721 Valley Center Drive		Del Mar		1		114,780		79.9	%
3811 Valley Center Drive		Del Mar		1		112,067		100.0	%
12225 / 12235 El Camino Real		Del Mar		2		115,513		80.5	%
6215 / 6220 Greenwich Drive		Governor Park		2		212,214		100.0	%
15051 Ave of Science		Rancho Bernardo		1		70,617		100.0	%
15073 Ave of Science		Rancho Bernardo		1		46,759		100.0	%
15378 Ave of Science		Rancho Bernardo		1		68,910		100.0	%
15435 / 15445 Innovation Drive		Rancho Bernardo		2		103,000		100.0	%
10421 Pacific Center Court		Sorrento Mesa		1		79,871		78.2	%
4939 / 4955 Directors Place		Sorrento Gateway		2		136,908		100.0	%
5005 / 5010 Wateridge Vista Drive		Sorrento Gateway		2		172,778		100.0	%
10243 Genetic Center		Sorrento Mesa		1		102,875		100.0	%
10390 Pacific Center Court		Sorrento Mesa		1		68,400		100.0	%
6055 Lusk Avenue		Sorrento Mesa		1		93,000		100.0	%
6260 Sequence Drive		Sorrento Mesa		1		130,000		100.0	%
6290 / 6310 Sequence Drive		Sorrento Mesa		2		152,415		100.0	%
6340 / 6350 Sequence Drive		Sorrento Mesa		2		199,000		100.0	%
Pacific Corporate Center		Sorrento Mesa		6		332,542		100.0	%
4690 Executive Drive		University Towne Center		1		50,546		100.0	%
9455 Towne Center Drive		University Towne Center		1		45,195		100.0	%
9785 / 9791 Towne Center Drive		University Towne Center		2		126,000		100.0	%
Total San Diego Office				41		3,253,382		96.4	%
Other
Kilroy Airport Center, Sea-Tac		Seattle, WA		3		532,430		94.8	%
5151/5155 Camino Ruiz		Carmarillo, CA		4		265,372		85.1	%
2829 Townsgate Road		Thousand Oaks, CA		1		81,158		91.1	%
Total Other Office				8		878,960		91.5	%
Total Office				82		7,392,594		93.2	%

10

Kilroy Realty Corporation

Third Quarter 2004 Supplemental Financial Report

Stabilized Portfolio Occupancy Overview

		City/Submarket		# of Buildings		Square Feet		Occupancy
Industrial:
Los Angeles, California
2031 E. Mariposa Avenue		El Segundo		1		192,053		100.0	%
2260 E. El Segundo Blvd.		El Segundo		1		113,820		0.0	%
2265 E. El Segundo Blvd.		El Segundo		1		76,570		0.0	%
2270 E. El Segundo Blvd.		El Segundo		1		6,362		100.0	%
Total Los Angeles Industrial				4		388,805		51.0	%
Orange County, California
1000 E. Ball Road		Anaheim		1		100,000		100.0	%
1230 S. Lewis Road		Anaheim		1		57,730		100.0	%
1250 N. Tustin Avenue		Anaheim		1		84,185		100.0	%
3125 E. Coronado Street		Anaheim		1		144,000		100.0	%
3130 - 3150 Miraloma		Anaheim		1		144,000		100.0	%
3250 E. Carpenter		Anaheim		1		41,225		100.0	%
3340 E. La Palma Avenue		Anaheim		1		153,320		100.0	%
5115 E. La Palma Avenue		Anaheim		1		286,139		100.0	%
5325 E. Hunter Avenue		Anaheim		1		109,449		0.0	%
Anaheim Tech Center		Anaheim		5		593,992		100.0	%
La Palma Business Center		Anaheim		2		145,481		82.8	%
Brea Industrial Complex		Brea		7		276,278		100.0	%
Brea Industrial-Lambert Road		Brea		2		178,811		100.0	%
1675 MacArthur		Costa Mesa		1		50,842		100.0	%
25202 Towne Center Drive		Foothill Ranch		1		303,533		100.0	%
12400 Industry Street		Garden Grove		1		64,200		100.0	%
12681 / 12691 Pala Drive		Garden Grove		1		84,700		100.0	%
7421 Orangewood Avenue		Garden Grove		1		82,602		100.0	%
Garden Grove Industrial Complex		Garden Grove		6		275,971		100.0	%
17150 Von Karman		Irvine		1		157,458		100.0	%
2055 S.E. Main Street		Irvine		1		47,583		100.0	%
9401 Toledo Way		Irvine		1		244,800		100.0	%
1951 E. Carnegie Avenue		Santa Ana		1		100,000		100.0	%
2525 Pullman		Santa Ana		1		103,380		100.0	%
14831 Franklin Avenue		Tustin		1		36,256		100.0	%
2911 Dow Avenue		Tustin		1		51,410		100.0	%
Total Orange County Industrial				43		3,917,345		96.6	%
Other
5115 N. 27th Avenue		Phoenix, AZ		1		130,877		100.0	%
3735 Imperial Highway		Stockton, CA		1		164,540		100.0	%
Total Other Industrial				2		295,417		100.0	%
Total Industrial				49		4,601,567		92.9	%

11

Kilroy Realty Corporation

Third Quarter 2004 Supplemental Financial Report

Leasing Activity

Quarter-to-Date

		1st & 2nd Generation								2nd Generation															Weighted Average Lease Term (Mo.)
		# of Leases(1)				Square Feet(1)				TI/LC Per Sq.Ft.			Maintenance Capex Per Sq.Ft.(2)			Changes in Rents(3)			Changes in Cash Rents(4)			Retention Rates(5)
		New		Renewal		New		Renewal
Office		22		8		281,677		347,074		$	11.94		$	0.02		(13.3	%)		(21.7	%)		97.2	%		63
Industrial		1		2		6,000		52,888		$	0.17		$	0.02		(4.1	%)		(7.0	%)		39.0	%		19
Total		23		10		287,677		399,962		$	10.75		$	0.02		(13.0	%)		(21.2	%)		81.2	%		59

Year-to-Date

		1st & 2nd Generation								2nd Generation															Weighted Average Lease Term (Mo.)
		# of Leases(1)				Square Feet(1)				TI/LC Per Sq.Ft.			Maintenance Capex Per Sq.Ft.(2)			Changes in Rents(3)			Changes in Cash Rents(4)			Retention Rates(5)
		New		Renewal		New		Renewal
Office		51		22		511,815		442,023		$	15.56		$	0.37		(7.8	%)		(14.8	%)		89.7	%		66
Industrial		4		11		55,854		356,083		$	3.40		$	0.02		3.3	%		(6.6	%)		76.7	%		39
Total		55		33		567,669		798,106		$	11.19		$	0.23		(6.1	%)		(13.4	%)		83.3	%		58

(1) Represents leasing activity for leases commencing during the period shown, net of month-to-month leases. Excludes leasing on new construction.

(2) Calculated over entire stabilized portfolio.

(3) Calculated as the change between GAAP rents for new/renewed leases and the expired GAAP rents for the same space. Excludes leases for which the space was vacant longer than one year.

(4) Calculated as the change between stated rents for new/renewed leases and the expired stated rents for the same space. Excludes leases for which the space was vacant longer than one year. The change in cash rents for two of the leases reported year-to-date was calculated using the leases’ stabilized stated rent. The starting stated rents for these two leases were discounted for the first six months.

(5) Calculated as the percentage of space either renewed or expanded into by existing tenants at lease expiration.

12

Kilroy Realty Corporation

Third Quarter 2004 Supplemental Financial Report

Stabilized Portfolio Capital Expenditures

( $ in thousands)

Non-Recurring Capital Expenditures:
		Q1 2004			Q2 2004			Q3 2004			YTD 2004
Capital Improvements		$	—		$	—		$	—		$	—
Tenant Improvements & Leasing Commissions(1)			47			537			2,674			3,258
Total		$	47		$	537		$	2,674		$	3,258
Recurring Capital Expenditures:
		Q1 2004			Q2 2004			Q3 2004			YTD 2004
Capital Improvements
Office		$	1,862		$	752		$	230		$	2,844
Industrial			10			—			9			19
			1,872			752			239			2,863
Tenant Improvements & Leasing Commissions (1)
Office			1,555			3,869			4,067			9,491
Industrial			311			1,023			—			1,334
			1,866			4,892			4,067			10,825
Total
Office			3,417			4,621			4,297			12,335
Industrial			321			1,023			9			1,353
		$	3,738		$	5,644		$	4,306		$	13,688

(1) Represents cash paid and leasing costs incurred for leases commencing during the period shown.

13

Kilroy Realty Corporation

Third Quarter 2004 Supplemental Financial Report

Lease Expiration Summary Schedule

($ in thousands)

Year of Expiration		# of Expiring Leases		Total Square Feet(1)		% of Total Leased Sq. Ft.			Annual Base Rent(2)			Annual Rent per Sq. Ft.(2)
OFFICE:
Remaining 2004 (3)		11		77,595		1.1	%			1,522			19.61
2005		60		629,323		9.2	%			13,723			21.81
2006		57		698,066		10.2	%			16,621			23.81
2007		65		1,156,914		17.0	%			22,487			19.44
2008		45		1,024,424		15.0	%			24,285			23.71
2009		47		1,062,156		15.6	%			27,062			25.48
2010		14		328,630		4.8	%			10,301			31.35
2011		13		367,403		5.4	%			6,722			18.30
2012		4		187,585		2.8	%			6,860			36.57
2013 and beyond		22		1,279,222		18.9	%			51,385			40.17
Subtotal		338		6,811,318		100.0	%		$	180,968		$	26.57
INDUSTRIAL:
Remaining 2004 (3)		1		20,133		0.5	%			138			6.85
2005		16		770,060		18.0	%			6,035			7.84
2006		12		494,461		11.6	%			4,359			8.82
2007		14		668,776		15.6	%			5,088			7.61
2008		9		860,407		20.1	%			6,838			7.95
2009		11		678,661		15.9	%			4,955			7.30
2010		2		39,130		0.9	%			398			10.17
2011		5		417,689		9.8	%			3,307			7.92
2012		—		—		—				—			—
2013 and beyond		2		327,402		7.7	%			3,738			11.42
Subtotal		72		4,276,719		100.0	%		$	34,856		$	8.15
TOTAL PORTFOLIO:
Remaining 2004 (3)		12		97,728		0.9	%			1,660			16.99
2005		76		1,399,383		12.6	%			19,758			14.12
2006		69		1,192,527		10.8	%			20,980			17.59
2007		79		1,825,690		16.5	%			27,575			15.10
2008		54		1,884,831		17.0	%			31,123			16.51
2009		58		1,740,817		15.7	%			32,017			18.39
2010		16		367,760		3.3	%			10,699			29.09
2011		18		785,092		7.1	%			10,029			12.77
2012		4		187,585		1.7	%			6,860			36.57
2013 and beyond		24		1,606,624		14.4	%			55,123			34.31
Total		410		11,088,037		100.0	%		$	215,824		$	19.46

(1) Excludes space leased under month-to-month leases and vacant space at September 30, 2004.

(2) Reflects annualized rent calculated on a straight-line basis.

(3) Represents leases expiring during the remainder of 2004 for which renewals have not been executed.

14

Kilroy Realty Corporation

Third Quarter 2004 Supplemental Financial Report

Lease Expiration Schedule Detail by Region

($ in thousands)

Year of Expiration		Los Angeles County													Orange County
		# of Expiring Leases		Total Square Feet(1)		% of Total Regional Sq. Ft.			Annual Base Rent(2)			Annual Rent per Sq. Ft.(2)			# of Expiring Leases		Total Square Feet(1)		% of Total Regional Sq. Ft.			Annual Base Rent(2)			Annual Rent per Sq. Ft.(2)
OFFICE:
Remaining 2004 (3)		7		35,586		1.4	%			935			26.27		1		2,062		0.5	%			48			23.28
2005		24		140,071		5.6	%			3,861			27.56		11		82,877		22.2	%			1,811			21.85
2006		38		375,331		15.0	%			10,434			27.80		7		69,442		18.6	%			1,099			15.83
2007		35		460,317		18.4	%			10,359			22.50		9		26,710		7.2	%			614			22.99
2008		20		379,510		15.1	%			12,750			33.60		11		151,490		40.6	%			3,225			21.29
2009		33		646,750		25.8	%			18,364			28.39		3		27,291		7.3	%			601			22.02
2010		9		77,218		3.1	%			2,529			32.75		—		—		—				—			—
2011		6		90,026		3.6	%			2,722			30.24		1		13,381		3.6	%			369			27.58
2012		1		12,518		0.5	%			394			31.47		—		—		—				—			—
2013 and beyond		9		288,332		11.5	%			8,779			30.45		—		—		—				—			—
Subtotal		182		2,505,659		100.0	%		$	71,127		$	28.39		43		373,253		100.0	%		$	7,767		$	20.81
INDUSTRIAL:
Remaining 2004 (3)		—		—		—				—			—		1		20,133		0.5	%			138			6.85
2005		1		192,053		96.8	%			2,186			11.38		15		578,007		15.3	%			3,849			6.66
2006		—		—		—				—			—		11		329,921		8.7	%			3,135			9.50
2007		—		—		—				—			—		14		668,776		17.7	%			5,088			7.61
2008		—		—		—				—			—		9		860,407		22.7	%			6,838			7.95
2009		1		6,362		3.2	%			113			17.76		10		672,299		17.8	%			4,842			7.20
2010		—		—		—				—			—		2		39,130		1.0	%			398			10.17
2011		—		—		—				—			—		4		286,812		7.6	%			2,427			8.46
2012		—		—		—				—			—		—		—		—				—			—
2013 and beyond		—		—		—				—			—		2		327,402		8.7	%			3,738			11.42
Subtotal		2		198,415		100.0	%		$	2,299		$	11.59		68		3,782,887		100.0	%		$	30,453		$	8.05
TOTAL PORTFOLIO:
Remaining 2004 (3)		7		35,586		1.3	%			935			26.27		2		22,195		0.5	%			186			8.38
2005		25		332,124		12.3	%			6,047			18.21		26		660,884		15.9	%			5,660			8.56
2006		38		375,331		13.9	%			10,434			27.80		18		399,363		9.6	%			4,234			10.60
2007		35		460,317		17.0	%			10,359			22.50		23		695,486		16.7	%			5,702			8.20
2008		20		379,510		14.0	%			12,750			33.60		20		1,011,897		24.3	%			10,063			9.94
2009		34		653,112		24.2	%			18,477			28.29		13		699,590		16.8	%			5,443			7.78
2010		9		77,218		2.9	%			2,529			32.75		2		39,130		0.9	%			398			10.17
2011		6		90,026		3.3	%			2,722			30.24		5		300,193		7.2	%			2,796			9.31
2012		1		12,518		0.5	%			394			31.47		—		—		—				—			—
2013 and beyond		9		288,332		10.6	%			8,779			30.45		2		327,402		8.1	%			3,738			11.42
Total		184		2,704,074		100.0	%		$	73,426		$	27.15		111		4,156,140		100.0	%		$	38,220		$	9.20

⁽¹⁾ Excludes space leased under month-to-month leases and vacant space at September 30, 2004.

⁽²⁾ Reflects annualized rent calculated on a straight-line basis.

⁽³⁾ Represents leases expiring during the remainder of 2004 for which renewals have not been executed.

15

Kilroy Realty Corporation

Third Quarter 2004 Supplemental Financial Report

Lease Expiration Schedule Detail by Region

($ in thousands)

		San Diego County													Other
Year of Expiration		# of Expiring Leases		Total Square Feet(1)		% of Total Regional Sq. Ft.			Annual Base Rent (2)			Annual Rent per Sq. Ft.(2)			# of Expiring Leases		Total Square Feet(1)		% of Total Regional Sq. Ft.			Annual Base Rent (2)			Annual Rent per Sq. Ft.(2)
OFFICE:
Remaining 2004 (3)		1		25,082		0.8	%			136			5.42		2		14,865		1.9	%			403			27.11
2005		7		288,736		9.2	%			5,119			17.73		18		117,639		14.8	%			2,932			24.92
2006		4		203,707		6.5	%			4,095			20.10		8		49,586		6.2	%			993			20.03
2007		10		550,833		17.6	%			9,135			16.58		11		119,054		15.0	%			2,379			19.98
2008		7		252,891		8.1	%			5,671			22.42		7		240,533		30.2	%			2,639			10.97
2009		5		337,345		10.8	%			6,945			20.59		6		50,770		6.4	%			1,152			22.69
2010		4		243,236		7.8	%			7,529			30.95		1		8,176		1.0	%			243			29.72
2011		1		68,910		2.2	%			1,116			16.20		5		195,086		24.5	%			2,515			12.89
2012		3		175,067		5.6	%			6,466			36.93		—		—		—				—			—
2013 and beyond		13		990,890		31.4	%			42,606			43.00		—		—		—				—			—
Subtotal		55		3,136,697		100.0	%		$	88,818		$	28.32		58		795,709		100.0	%		$	13,256		$	16.66
INDUSTRIAL:
Remaining 2004 (3)		—		—		—				—			—		—		—		—				—			—
2005		—		—		—				—			—		—		—		—				—			—
2006		—		—		—				—			—		1		164,540		55.7	%			1,224			7.44
2007		—		—		—				—			—		—		—		—				—			—
2008		—		—		—				—			—		—		—		—				—			—
2009		—		—		—				—			—		—		—		—				—			—
2010		—		—		—				—			—		—		—		—				—			—
2011		—		—		—				—			—		1		130,877		44.3	%			880			6.72
2012		—		—		—				—			—		—		—		—				—			—
2013 and beyond		—		—		—				—			—		—		—		—				—			—
Subtotal		—		—		—				—			—		2		295,417		100.0	%		$	2,104		$	7.12
TOTAL PORTFOLIO:
Remaining 2004 (3)		1		25,082		0.8	%			136			5.42		2		14,865		1.4	%			403			27.11
2005		7		288,736		9.2	%			5,119			17.73		18		117,639		10.8	%			2,932			24.92
2006		4		203,707		6.5	%			4,095			20.10		9		214,126		19.6	%			2,217			10.35
2007		10		550,833		17.6	%			9,135			16.58		11		119,054		10.9	%			2,379			19.98
2008		7		252,891		8.1	%			5,671			22.42		7		240,533		22.0	%			2,639			10.97
2009		5		337,345		10.8	%			6,945			20.59		6		50,770		4.7	%			1,152			22.69
2010		4		243,236		7.8	%			7,529			30.95		1		8,176		0.7	%			243			29.72
2011		1		68,910		2.2	%			1,116			16.20		6		325,963		29.9	%			3,395			10.42
2012		3		175,067		5.6	%			6,466			36.93		—		—		—				—			—
2013 and beyond		13		990,890		31.4	%			42,606			43.00		—		—		—				—			—
Total		55		3,136,697		100.0	%		$	88,818		$	28.32		60		1,091,126		100.0	%		$	15,360		$	14.08

(1) Excludes space leased under month-to-month leases and vacant space at September 30, 2004.

(2) Reflects annualized rent calculated on a straight-line basis.

(3) Represents leases expiring during the remainder of 2004 for which renewals have not been executed.

16

Kilroy Realty Corporation

Third Quarter 2004 Supplemental Financial Report

Quarterly Lease Expirations for 2004 and 2005

($ in thousands)

		# of Expiring Leases (1)		Total Square Feet(1), (2)		% of Total Leased Sq. Ft.			Annual Base Rent (3)			Annual Rent per Sq. Ft.(3)
OFFICE:
Q4 2004		11		77,595		1.1	%		$	1,522		$	19.61
Q1 2005		14		129,081		1.8	%			2,491			19.30
Q2 2005		9		81,525		1.2	%			1,904			23.35
Q3 2005		26		291,487		4.3	%			5,426			18.61
Q4 2005		11		127,230		1.9	%			3,902			30.67
Subtotal 2005		60		629,323		9.2	%			13,723			21.81
INDUSTRIAL:
Q4 2004		1		20,133		0.5	%			138			6.85
Q1 2005		5		250,804		5.8	%			1,474			5.88
Q2 2005		3		129,144		3.0	%			854			6.61
Q3 2005		3		79,225		1.9	%			562			7.09
Q4 2005		5		310,887		7.3	%			3,145			10.12
Subtotal 2005		16		770,060		18.0	%			6,035			7.84
TOTAL PORTFOLIO:
Q4 2004		12		97,728		0.9	%			1,660			16.99
Q1 2005		19		379,885		3.4	%			3,965			10.44
Q2 2005		12		210,669		1.9	%			2,758			13.09
Q3 2005		29		370,712		3.3	%			5,988			16.15
Q4 2005		16		438,117		4.0	%			7,047			16.08
Total 2005		76		1,399,383		12.6	%		$	19,758		$	14.12

(1) Represents leases expiring during the remainder of 2004 and 2005 for which renewals have not been executed.

(2) Excludes space leased under month-to-month leases and vacant space at September 30, 2004.

(3) Reflects annualized rent calculated on a straight-line basis.

17

Kilroy Realty Corporation

Third Quarter 2004 Supplemental Financial Report

Top Ten Office and Top Industrial Tenants

($ in thousands)

Tenant Name		Annual Base Rental Revenues (1)			Rentable Square Feet		Percentage of Total Annual Base Rental Revenues			Percentage of Total Rentable Square Feet
Office Properties:
The Boeing Company		$	12,434		839,109		6.3	%		7.0	%
AMN Healthcare			8,179		175,672		4.2	%		1.5	%
DirecTV, Inc.			6,723		183,066		3.4	%		1.5	%
Fish & Richardson			6,224		122,737		3.2	%		1.0	%
Diversa Corporation			5,046		136,908		2.6	%		1.1	%
Intuit, Inc.			4,473		264,226		2.3	%		2.2	%
Epson America, Inc.			4,157		162,852		2.1	%		1.4	%
Fair Isaac & Company			3,985		129,752		2.0	%		1.1	%
Peregrine Systems, Inc.			3,663		104,450		1.9	%		0.9	%
Newgen Results Corporation			3,465		102,875		1.8	%		0.9	%
Total Office Properties		$	58,349		2,221,647		29.8	%		18.6	%
Industrial Properties:
Celestica California, Inc.		$	2,501		303,533		1.4	%		2.5	%
Qwest Communications Corporation			2,434		244,800		1.3	%		2.0	%
Mattel, Inc.			2,151		192,053		1.1	%		1.6	%
Packard Hughes Interconnect			1,710		157,458		0.9	%		1.3	%
NBTY Manufacturing, LLC			1,488		286,139		0.8	%		2.4	%
United Plastics Group, Inc.			1,231		188,000		0.6	%		1.6	%
Kraft Foods, Inc.			1,184		164,540		0.6	%		1.4	%
Targus, Inc.			1,058		200,646		0.6	%		1.7	%
Extron Electronics			960		157,730		0.5	%		1.3	%
Ricoh Electronics			817		100,000		0.4	%		0.8	%
Total Industrial Properties		$	15,534		1,994,899		8.2	%		16.6	%

(1) Reflects annualized rent calculated on a straight-line basis.

18

Kilroy Realty Corporation

Third Quarter 2004 Supplemental Financial Report

Summary of Tenants Representing 5.0% or Greater of Annual Base Rental Revenues

($ in thousands)

The Boeing Company		Rentable Square Feet		Annual Base Rental Revenues (1)			Lease Expiration Date
Boeing Satellite Systems
2260 E. Imperial Highway, El Segundo		286,151		$	5,494		July 31, 2007
1231 N. Miller Street, Anaheim		113,242			688		March 31, 2009
2240 E. Imperial Highway, El Segundo		100,978			1,784		January 31, 2006
1145 N. Ocean Blvd., Anaheim		65,447			435		October 31, 2005
2250 E. Imperial Highway, El Segundo		7,791			273		November 30, 2004
		573,609			8,674
Boeing Airplane-on-Ground Division
17930 Pacific Highway, Seattle (2)		211,139			2,232		December 31, 2007
Boeing Capital Corporation
3780 Kilroy Airport Way, Long Beach		43,636			1,225		September 30, 2005
Boeing Realty Corporation
3760 Kilroy Airport Way, Long Beach		10,725			303		August 31, 2005
Total		839,109		$	12,434

(1) Reflects annualized rent calculated on a straight-line basis.

(2) Under the terms of the lease, The Boeing Company has the right to terminate this lease effective either December 31, 2005 or December 31, 2006 by giving the Company written notice one year in advance.

19

Kilroy Realty Corporation

Third Quarter 2004 Supplemental Financial Report

2004 Acquisitions & Dispositions

($ in thousands)

ACQUISITIONS:

Project		Location		Type		Month of Acquisition		Square Feet		Purchase Price
1st QUARTER:
NONE
2nd QUARTER:
NONE
3rd QUARTER:
NONE
DISPOSITIONS:
Property		Location		Type		Month of Disposition		Square Feet		Sales Price
1st QUARTER:
NONE
2nd QUARTER:
3750 University Avenue		Riverside, CA		Office		May		125,020		$	19,500
3rd QUARTER:
12752/12822 Monarch Street		Garden Grove, CA		Industrial		September		277,037			15,300
TOTAL YEAR-TO-DATE DISPOSITIONS								402,057		$	34,800

20

Kilroy Realty Corporation

Third Quarter 2004 Supplemental Financial Report

Stabilized Development Projects

($ in thousands)

DEVELOPMENT PROJECTS:

Project

Location

Type

Start Date

Completion Date

Rentable Square Feet

Total Est. Investment

% Leased

1st QUARTER:

NONE

2nd QUARTER:

NONE

3rd QUARTER:

12400 High Bluff

Del Mar, CA

Office

2Q 2002

3Q 2003

208,464

$

62,273

100

%(1)

(1) This building was 84% occupied as of September 30, 2004.

21

Kilroy Realty Corporation

Third Quarter 2004 Supplemental Financial Report

In-Process and Committed Development and Redevelopment Projects

($ in thousands)

DEVELOPMENT PROJECTS:

						Estimated Construction Period				Est. Stabilization Date(1)		Rentable Square Feet		Total Estimated Investment			Total Spent as of 9/30/2004			% Leased
Project		Location		Type		Start Date		Compl. Date
PROJECTS IN LEASE-UP:
None
PROJECTS UNDER CONSTRUCTION:
15227 Avenue of Science		Rancho Bernardo, CA		Office		3Q 2004		3Q 2005		3Q 2006		65,867		$	13,873		$	5,423		0	%
15253 Avenue of Science		Rancho Bernardo, CA		Office		3Q 2004		3Q 2005		3Q 2006		37,405			8,926			4,239		0	%
Subtotal												103,272			22,799			9,662
COMMITTED PROJECTS:
None
TOTAL IN-PROCESS AND COMMITTED PROJECTS:												103,272		$	22,799		$	9,662		0	%

REDEVELOPMENT PROJECTS:

		Location		Pre and Post Redevelopment Type		Estimated Construction Period				Est. Stabilization Date(1)		Rentable Square Feet		Existing Investment (2)			Estimated Redevelopment Costs			Total Estimated Investment			Total Spent as of 9/30/2004			% Leased
Project						Start Date		Compl. Date
PROJECTS IN LEASE-UP:
5717 Pacific Center Blvd.		Sorrento Mesa, CA		Office to Life Science		1Q 2003		1Q 2004		1Q 2005		67,995		$	8,790		$	10,320		$	19,110		$	10,817		0	%
909 N. Sepulveda Blvd.		El Segundo, CA		Office		1Q 2003		3Q 2004		3Q 2005		241,603			37,799			27,509			65,308			50,738		19	%
Subtotal												309,598			46,589			37,829			84,418			61,555
PROJECTS UNDER CONSTRUCTION:
None
COMMITTED PROJECTS:
None
TOTAL IN-PROCESS AND COMMITTED PROJECTS:												309,598		$	46,589		$	37,829		$	84,418		$	61,555		15	%

(1) Based on management’s estimation of the earlier of stabilized occupancy (95%) or one year from the date of substantial completion.

(2) Represents total capitalized costs at the commencement of redevelopment.

22

Kilroy Realty Corporation

Third Quarter 2004 Supplemental Financial Report

Future Development Pipeline

($ in thousands)

Project		Location		Type		Total Site Acreage		Estimated Rentable Square Feet		Total Estimated Investment			Total Spent as of 9/30/2004
SAN DIEGO COUNTY:
Innovation Corporate Center - Lot 2		Rancho Bernardo, CA		Office		3.0		50,000		$	14,287		$	3,395
Innovation Corporate Center - Lot 4		Rancho Bernardo, CA		Office		3.4		75,000			14,730			4,070
Pacific Corporate Center - Lots 3, 4 & 6		Sorrento Mesa, CA		Office		10.9		225,000			50,810			15,485
Pacific Corporate Center - Lot 8		Sorrento Mesa, CA		Office		5.0		95,000			26,916			7,877
Santa Fe Summit - Phase I		56-Corridor, CA		Office		7.6		200,839			50,064			7,835
Santa Fe Summit - Phase II		56-Corridor, CA		Office		7.6		203,006			63,025			7,835
Sorrento Gateway - Lot 1		Sorrento Mesa, CA		Office		3.4		60,000			16,610			4,345
Sorrento Gateway - Lot 2		Sorrento Mesa, CA		Office		4.4		80,000			25,934			8,038
Sorrento Gateway - Lot 3		Sorrento Mesa, CA		Office		3.4		60,000			18,706			5,668
Sorrento Gateway - Lot 7		Sorrento Mesa, CA		Office		4.1		57,000			21,102			7,328
TOTAL FUTURE DEVELOPMENT PIPELINE						52.8		1,105,845		$	302,184		$	71,876

23

Kilroy Realty Corporation

Third Quarter 2004 Supplemental Financial Report

Capital Structure

At September 30, 2004

($ in thousands)

		Shares/Units At September 30, 2004		Aggregate Principal Amount or $ Value Equivalent			% of Total Market Capitalization
DEBT:
Secured Debt				$	494,932		23.3	%
Unsecured Senior Notes					144,000		6.8	%
Unsecured Line of Credit					92,000		4.3	%
Total Debt				$	730,932		34.4	%
EQUITY:
7.450% Series A Cumulative Redeemable Preferred Units(1)		1,500,000		$	75,000		3.5	%
9.250% Series D Cumulative Redeemable Preferred Units (1)		900,000			45,000		2.1	%
7.800% Series E Cumulative Redeemable Preferred Stock(2)		1,610,000			40,250		1.9	%
Common Units Outstanding(3)		3,990,485			151,758		7.1	%
Common Shares Outstanding(3)		28,527,920			1,084,917		51.0	%
Total Equity				$	1,396,925		65.6	%
TOTAL MARKET CAPITALIZATION				$	2,127,857		100.0	%

(1) Value based on $50.00 per share liquidation preference.

(2) Value based on $25.00 per share liquidation preference.

(3) Value based on closing share price of $38.03 at September 30, 2004.

24

Kilroy Realty Corporation

Third Quarter 2004 Supplemental Financial Report

Debt Analysis

At September 30, 2004

($ in thousands)

TOTAL DEBT COMPOSITION

		% of Total Debt			Weighted Average
					Interest Rate			Maturity
Secured vs. Unsecured Debt:
Secured Debt		67.7	%		6.0	%		5.7
Unsecured Debt		32.3	%		5.4	%		6.2
Floating vs. Fixed Rate Debt:
Fixed Rate Debt(1)		99.7	%		5.8	%		5.9
Floating Rate Debt		0.3	%		3.2	%		1.2
Total Debt					5.8	%		5.8
Total Debt Including Loan Fees					6.5	%

UNSECURED LINE OF CREDIT

Total Line		Outstanding Balance		Expiration Date
$425,000		$92,000		October 2007(2)

CAPITALIZED INTEREST & LOAN FEES

Quarter-to-Date		Year-to-Date
$2.3		$6.4

(1) Includes the impact of the interest-rate swap agreements listed on page 26.

(2) On October 22, 2004, the Company renewed its $425 million unsecured revolving credit facility that was scheduled to mature in March 2005. This analysis reflects the new maturity date of October 22, 2007. The Company has a one-year extension option.

25

Kilroy Realty Corporation

Third Quarter 2004 Supplemental Financial Report

Debt Analysis

At September 30, 2004

($ in thousands)

DEBT MATURITY SCHEDULE

Floating/Fixed Rate		Effective Rate			Maturity Date			Remaining 2004			2005			2006			2007			2008			After 2008			Total
Unsecured Debt:
Floating		3.26	%		10/22/2007	(1)											$	92,000								$	92,000
Fixed		5.72	%		8/4/2010																			61,000			61,000
Fixed		6.45	%		8/4/2014																			83,000			83,000
																		92,000						144,000			236,000
Secured Debt:
Fixed		8.45	%		12/1/2005				162			10,349															10,511
Floating		3.16	%		12/23/2005	(2)						29,000															29,000
Floating		3.51	%		1/1/2006										31,000												31,000
Fixed		6.51	%		8/12/2007				56			232			248			17,049									17,585
Fixed		7.21	%		8/12/2007				39			166			178			4,325									4,708
Fixed		3.80	%		8/1/2008				373			1,529			1,588			1,650			73,401						78,541
Fixed		7.20	%		4/1/2009				502			2,099			2,256			2,423			2,603			75,476			85,359
Fixed		6.70	%		12/27/2011				249			1,040			1,112			1,189			1,271			72,792			77,653
Fixed		5.57	%		8/1/2012				265			1,097			1,160			1,226			1,297			75,868			80,913
Fixed		4.95	%		8/1/2012				83			511			536			563			591			31,716			34,000
Fixed		8.21	%		10/1/2013				146			607			659			715			776			1,036			3,939
Fixed		8.26	%		11/1/2014				277			1,164			1,264			1,373			1,492			11,474			17,044
Fixed		7.15	%		5/1/2017				302			1,266			1,359			1,459			1,567			18,726			24,679
		5.50	%						2,454			49,060			41,360			31,972			82,998			287,088			494,932
Effect of SWAPS		0.33	%
Total		5.83	%					$	2,454		$	49,060		$	41,360		$	123,972		$	82,998		$	431,088		$	730,932

(1) On October 22, 2004, the Company renewed its $425 million unsecured revolving credit facility that was scheduled to mature in March 2005. This analysis reflects the new maturity date of October 22, 2007. The Company has a one-year extension option.

(2) Maturity date does not reflect the two one-year extension options.

HEDGING INSTRUMENTS

Notional Amount		Instrument		Rate		Maturity
$50,000		Swap		4.46%		1/2005
50,000		Swap		2.57%		11/2005
25,000		Swap		2.98%		12/2006
25,000		Swap		2.98%		12/2006
$150,000

26

Kilroy Realty Corporation

Third Quarter 2004 Supplemental Financial Report

Management Statements on Non-GAAP Supplemental Measures

Included in this section are management’s statements regarding certain non-GAAP financial measures provided in this supplemental financial report and, with respect to Funds From Operations (“FFO”), in the Company’s earnings release on October 25, 2004, and the reasons why management believes that these measures provide useful information to investors about the Company’s financial condition and results of operations.

Net Operating Income:

Management believes that Net Operating Income (“NOI”) is a useful supplemental measure of the Company’s operating performance. The Company defines NOI as operating revenues (rental income, tenant reimbursements and other income) less property and related expenses (property expenses, real estate taxes, provision for bad debts and ground leases). Other real estate investment trusts (“REITs”) may use different methodologies for calculating NOI, and accordingly, the Company’s NOI may not be comparable to other REITs.

Because NOI excludes general and administrative expenses, interest expense, depreciation and amortization, gains and losses from property dispositions, discontinued operations, and extraordinary items, it provides a performance measure that, when compared year over year, reflects the revenues and expenses directly associated with owning and operating commercial real estate and the impact to operations from trends in occupancy rates, rental rates, and operating costs, providing a perspective on operations not immediately apparent from net income. The Company uses NOI to evaluate its operating performance on a segment basis since NOI allows the Company to evaluate the impact that factors such as occupancy levels, lease structure, rental rates, and tenant base, which vary by segment type, have on the Company’s results, margins and returns. In addition, management believes that NOI provides useful information to the investment community about the Company’s financial and operating performance when compared to other REITs since NOI is generally recognized as a standard measure of performance in the real estate industry.

However, NOI should not be viewed as an alternative measure of the Company’s financial performance since it does not reflect general and administrative expenses, interest expense, depreciation and amortization costs, the level of capital expenditures and leasing costs necessary to maintain the operating performance of the Company’s properties, or trends in development and construction activities which are significant economic costs and activities that could materially impact the Company’s results from operations.

Same Store Net Operating Income:

Management believes that Same Store NOI is a useful supplemental measure of the Company’s operating performance. Same Store NOI represents the NOI for the stabilized properties that were operational for two comparable reporting periods. Because Same Store NOI excludes the change in NOI from properties developed, redeveloped, acquired and disposed of, it highlights operating trends such as occupancy levels, rental rates and operating costs on properties that were operational for two comparable periods. Other REITs may use different methodologies for calculating Same Store NOI, and accordingly, the Company’s Same Store NOI may not be comparable to other REITs.

However, Same Store NOI should not be viewed as an alternative measure of the Company’s financial performance since it does not reflect the operations of the Company’s entire portfolio, nor does it reflect the impact of general and administrative expenses, interest expense, depreciation and amortization costs, the level of capital expenditures and leasing costs necessary to maintain the operating performance of the Company’s properties, or trends in development and construction activities which are significant economic costs and activities that could materially impact the Company’s results from operations.

27

Kilroy Realty Corporation

Third Quarter 2004 Supplemental Financial Report

Management Statements on Non-GAAP Supplemental Measures

EBITDA:

Management believes that earnings before interest, depreciation, amortization, minority interests and impairment loss (“EBITDA”) is a useful supplemental measure of the Company’s operating performance. When considered with other GAAP measures and FFO, management believes EBITDA gives the investment community a more complete understanding of the Company’s operating results before the impact of investing and financing transactions and facilitates comparisons with competitors. Management also believes it is appropriate to present EBITDA as it is used in several of the Company’s financial covenants for both its secured and unsecured debt. However, EBITDA should not be viewed as an alternative measure of the Company’s operating performance since it excludes financing costs as well as depreciation and amortization costs which are significant economic costs that could materially impact the Company’s results of operations and liquidity. Other REITs may use different methodologies for calculating EBITDA and, accordingly, the Company’s EBITDA may not be comparable to other REITs.

Funds From Operations:

Management believes that FFO is a useful supplemental measure of the Company’s operating performance. The Company computes FFO in accordance with the White Paper on FFO approved by the Board of Governors of the National Association of Real Estate Investment Trusts (“NAREIT”). The White Paper defines FFO as net income or loss computed in accordance with GAAP, excluding extraordinary items, as defined by GAAP, and gains and losses from sales of depreciable operating property, plus real estate related depreciation and amortization (excluding amortization of deferred financing costs and depreciation of non-real estate assets), and after adjustment for unconsolidated partnerships and joint ventures. Other REITs may use different methodologies for calculating FFO and, accordingly, the Company’s FFO may not be comparable to other REITs.

Because FFO excludes depreciation and amortization, gains and losses from property dispositions, and extraordinary items, it provides a performance measure that, when compared year over year, reflects the impact to operations from trends in occupancy rates, rental rates, operating costs, development activities, general and administrative expenses, and interest costs, providing perspective on operating performance not immediately apparent from net income. In addition, management believes that FFO provides useful information to the investment community about the Company’s operating performance when compared to other REITs since FFO is generally recognized as the industry standard for reporting the operations of REITs.

However, FFO should not be viewed as an alternative measure of the Company’s operating performance since it does not reflect either depreciation and amortization costs or the level of capital expenditures and leasing costs necessary to maintain the operating performance of the Company’s properties, which are significant economic costs that could materially impact the Company’s results of operations.

Funds Available for Distribution:

Management believes that Funds Available for Distribution (“FAD”) is a useful supplemental measure of the Company’s liquidity. The Company computes FAD by adding to FFO the non-cash amortization of deferred financing costs and restricted stock compensation, and then subtracting tenant improvements, leasing commissions, and recurring capital expenditures, and eliminating the net effect of straight-line rents. FAD provides an additional perspective on the Company’s ability to fund cash needs and make distributions to shareholders by adjusting for the effect of these non-cash items included in FFO, as well as recurring capital expenditures and leasing costs. Management also believes that FAD provides useful information to the investment community about the Company’s financial position as compared to other REITs since FAD is a liquidity measure used by other REITs. However, other REITs may use different methodologies for calculating FAD and, accordingly, the Company’s FAD may not be comparable to other REITs.

28

Kilroy Realty Corporation

Third Quarter 2004 Supplemental Financial Report

Reconciliation of Same Store Net Operating Income to Net Income

(unaudited, $ in thousands)

		Three Months Ended September 30,
		2004				2003
Same Store Cash Net Operating Income		$	35,566			$	49,382
Adjustment:
GAAP Straight Line Rental Income			2,117				2,444
Same Store GAAP Net Operating Income (1)		$	37,683			$	51,826
Adjustment:
Non-Same Store GAAP Net Operating Income			4,812				3,181
Net Operating Income, as defined (1)			42,495				55,007
Adjustments:
Net Operating Income, as defined, from discontinued operations			(303	)			(906	)
Other Expenses:
General and administrative expenses			(9,399	)			(5,089	)
Interest expense			(9,540	)			(8,869	)
Depreciation and amortization			(14,832	)			(14,299	)
Other Income:
Interest and other income			77				36
Income from Continuing Operations			8,498				25,880
Minority interests			(3,001	)			(6,358	)
Income from discontinued operations			5,645				517
Preferred dividends			(785	)			—
Net Income Available for Common Shareholders		$	10,357			$	20,039

(1) Please refer to page 27 for Management Statements on Net Operating Income and Same Store Net Operating Income.

29

Kilroy Realty Corporation

Third Quarter 2004 Supplemental Financial Report

Reconciliation of EBITDA to Net Income

(unaudited, $ in thousands)

		Three Months Ended September 30,
		2004				2003
Net Income Available for Common Shareholders		$	10,357			$	20,039
Preferred dividends			785				—
Adjustments for Continuing Operations:
Interest expense			9,540				8,869
Depreciation and amortization			14,832				14,299
Distributions on Cumulative Redeemable Preferred units			2,437				3,375
Minority interest in earnings of Operating Partnership			564				2,983
Adjustments for Discontinued Operations:
Interest expense			—				—
Depreciation and amortization			53				265
Net (gain) loss on disposition of discontinued operations			(6,212	)			48
Minority interest in earnings of Operating Partnership			817				76
EBITDA Before Minority Interests (1)		$	33,173			$	49,954

(1) Please refer to page 28 for a Management Statement on EBITDA before minority interests.

30

Kilroy Realty Corporation

Third Quarter 2004 Supplemental Financial Report

Reconciliation of Funds Available for Distribution to GAAP Net Cash Provided by Operating Activities

(unaudited, $ in thousands)

		Three Months Ended September 30,							Nine Months Ended September 30,
		2004				2003			2004				2003
Funds Available for Distribution (1)		$	14,508			$	29,274		$	48,798			$	69,890
Adjustments:
Tenant improvements, leasing commissions and recurring capital expenditures			4,306				8,797			13,688				17,652
Depreciation for furniture, fixtures and equipment			227				237			681				719
Accrued preferred dividends			785				—			2,355				—
Provision for uncollectible tenant receivables			(645	)			2,609			(607	)			2,243
Changes in assets and liabilities (2)			15,803				2,886			12,953				(8,163	)
GAAP Net Cash Provided by Operating Activities		$	34,984			$	43,803		$	77,868			$	82,341

(1) Please refer to page 28 for a Management Statement on Funds Available for Distribution.

(2) Includes changes in the following assets and liabilities and miscellaneous other adjustments: current receivables; deferred leasing costs; prepaid expenses and other assets; accounts payable, accrued expenses and other liabilities; rents received in advance, security deposits, and deferred revenue; accrued distributions to Cumulative Redeemable Preferred unitholders; and other.

31