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STATES</font></div>
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AND EXCHANGE COMMISSION</font></div>
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D.C. 20549</font></div>
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8-K</font></div>
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      <hr style="COLOR: black" align="center" noshade size="1" width="17%">&#160;</div>
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REPORT</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&#160;</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Pursuant
to Section 13 OR 15 (d) of</font></div>
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Securities Exchange Act of 1934</font></div>
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    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Date
of Report (Date of earliest event reported):</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">January
28, 2010</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">
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REALTY CORPORATION</font></div>
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name of registrant as specified in its charter)</font></div>
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      </font></td>
            <td valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            <td valign="middle" width="23%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
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      Employer</font></div>
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W. Olympic Boulevard, Suite 200, Los Angeles, California 90064</font></div>
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of principal executive offices) (Zip Code)</font></div>
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telephone number, including area code:&#160;&#160;(310) 481-8400</font></div>
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    <div style="TEXT-ALIGN: center; TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt"><font style="DISPLAY: inline; FONT-WEIGHT: bold">N/A</font></font></div>
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name or former address, if changed since last report.)</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">
      <hr style="COLOR: black" align="center" noshade size="1" width="17%">&#160;</div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instructions A.2.):</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&#160;</font></div>
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<tr>
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      communications pursuant to Rule 425 under the Securities Act (17 CFR
      230.425)</font></div>
            </td>
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      material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
      240.14a-12)</font></div>
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<tr>
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            <td align="left" valign="top" width="69%">
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      communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
      240.14d-2(b))</font></div>
            </td>
          </tr></table>
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    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">&#160;</font></div>
    <div>
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<tr>
            <td align="left" valign="top" width="3%">
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: wingdings; FONT-SIZE: 10pt">&#168;</font></div>
            </td>
            <td align="left" valign="top" width="69%">
              <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">Pre-commencement
      communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
      240.13e-4(c))</font></div>
            </td>
          </tr></table>
    </div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div id="PGBRK" style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
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        </div>
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    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt; FONT-WEIGHT: bold">ITEM
1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT AND ITEM 2.03 CREATION OF A
DIRECT FINANCIAL OBLIGATION</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">On
January 28, 2010, Kilroy Realty Corporation&#8217;s (the &#8220;Company&#8221;) operating
subsidiary, Kilroy Realty, L.P. (the &#8220;Operating Partnership&#8221;), entered into a
mortgage loan transaction (the &#8220;Loan&#8221;) pursuant to which The Northwestern Mutual
Life Insurance Company (the &#8220;Lender&#8221;) provided financing in the principal amount
of $71,000,000 secured by, among other things, a first lien deed of trust and
security agreement (the &#8220;Deed of Trust&#8221;) encumbering five (5) parcels of land
located in Los Angeles and San Diego Counties, together with the buildings and
other improvements located thereon (collectively, the &#8220;Properties&#8221; and each, a
&#8220;Property&#8221;).</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The Loan
is evidenced by a Promissory Note (the &#8220;Note&#8221;), which matures on February 1,
2017, bears interest at an annual rate of 6.51% and requires monthly payments
based on a 30-year amortization period.&#160;&#160;The Operating Partnership has
used the proceeds of the Loan to repay certain existing indebtedness and for
general operating purposes.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The Note,
the Deed of Trust and the other loan documents entered into in connection with
the Loan contain covenants and restrictions including, among other things,
requirements that the Operating Partnership provide certain financial and
operating information to the Lender, restrictions on the ability of the
Operating Partnership to prepay the Loan and restrictions on the transfer of any
or all of the Properties during the term of the Loan.&#160;&#160;In addition,
the Deed of Trust prohibits transfers of direct and indirect ownership interests
in the Operating Partnership if, as a result of such transfers, the Company no
longer controls the Operating Partnership.&#160;&#160;Non-compliance with one or
more of the covenants could result in the Lender having the right to accelerate
the principal balance of the Loan.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">The Loan
is generally non-recourse to the Operating Partnership, but the Lender has
recourse for customary recourse provisions for a non-recourse
loan.&#160;&#160;In connection with the Loan, the Company guaranteed the
recourse provisions and also agreed to guarantee the Loan if the Operating
Partnership files or becomes subject to a bankruptcy or liquidation
proceeding.</font></div>
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    <div id="PGBRK" style="TEXT-INDENT: 0pt; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
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        <div style="TEXT-ALIGN: center; WIDTH: 100%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">2</font></div>
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    <div style="TEXT-INDENT: 0pt; DISPLAY: block"><br></div>
    <div style="TEXT-INDENT: 36pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-FAMILY: Times New Roman; FONT-SIZE: 10pt">Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.</font></div>
    <div style="TEXT-INDENT: 0pt; DISPLAY: block; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt" align="left">
    </div>
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              <td align="left" valign="middle" width="40%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="left" valign="middle" width="3%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="left" valign="middle" width="23%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
            </tr><tr>
              <td align="left" valign="top" width="40%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
      </font></td>
              <td align="left" valign="bottom" width="1%"><font style="DISPLAY: inline; FONT-FAMILY: times new roman; FONT-SIZE: 10pt">&#160;
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      Heidi R. Roth</font></div>
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      </font></td>
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      </font></td>
              <td valign="bottom" width="23%">
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              </td>
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      Vice President and Controller</font></div>
              </td>
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d8k.htm
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 OR 15 (d) of
The
Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported):
January
28, 2010
KILROY
REALTY CORPORATION
(Exact
name of registrant as specified in its charter)
Maryland
1-12675
95-4598246
(State
      or other jurisdiction of
incorporation)
(Commission
      File Number)
(IRS
      Employer
Identification
      No.)
12200
W. Olympic Boulevard, Suite 200, Los Angeles, California 90064
(Address
of principal executive offices) (Zip Code)
Registrant's
telephone number, including area code:  (310) 481-8400
N/A
(Former
name or former address, if changed since last report.)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instructions A.2.):
¨
Written
      communications pursuant to Rule 425 under the Securities Act (17 CFR
      230.425)
¨
Soliciting
      material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
      240.14a-12)
¨
Pre-commencement
      communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
      240.14d-2(b))
¨
Pre-commencement
      communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
      240.13e-4(c))
ITEM
1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT AND ITEM 2.03 CREATION OF A
DIRECT FINANCIAL OBLIGATION
On
January 28, 2010, Kilroy Realty Corporation's (the "Company") operating
subsidiary, Kilroy Realty, L.P. (the "Operating Partnership"), entered into a
mortgage loan transaction (the "Loan") pursuant to which The Northwestern Mutual
Life Insurance Company (the "Lender") provided financing in the principal amount
of $71,000,000 secured by, among other things, a first lien deed of trust and
security agreement (the "Deed of Trust") encumbering five (5) parcels of land
located in Los Angeles and San Diego Counties, together with the buildings and
other improvements located thereon (collectively, the "Properties" and each, a
"Property").
The Loan
is evidenced by a Promissory Note (the "Note"), which matures on February 1,
2017, bears interest at an annual rate of 6.51% and requires monthly payments
based on a 30-year amortization period.  The Operating Partnership has
used the proceeds of the Loan to repay certain existing indebtedness and for
general operating purposes.
The Note,
the Deed of Trust and the other loan documents entered into in connection with
the Loan contain covenants and restrictions including, among other things,
requirements that the Operating Partnership provide certain financial and
operating information to the Lender, restrictions on the ability of the
Operating Partnership to prepay the Loan and restrictions on the transfer of any
or all of the Properties during the term of the Loan.  In addition,
the Deed of Trust prohibits transfers of direct and indirect ownership interests
in the Operating Partnership if, as a result of such transfers, the Company no
longer controls the Operating Partnership.  Non-compliance with one or
more of the covenants could result in the Lender having the right to accelerate
the principal balance of the Loan.
The Loan
is generally non-recourse to the Operating Partnership, but the Lender has
recourse for customary recourse provisions for a non-recourse
loan.  In connection with the Loan, the Company guaranteed the
recourse provisions and also agreed to guarantee the Loan if the Operating
Partnership files or becomes subject to a bankruptcy or liquidation
proceeding.
2
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
KILROY
      REALTY CORPORATION
Date:
      February 2, 2010
By:
/s/
      Heidi R. Roth
Heidi
      R. Roth
Senior
      Vice President and Controller
3