KKR Snaps Up The Exchange In San Francisco For $1B


Global investment company KKR has acquired The Exchange, an office complex in San Francisco, from Kilroy Realty Corporation for about $1 billion. The Exchange is a 750,000 square foot class A office complex. Real estate developer and manager Longfellow Real Estate Partners will operate the complex.

KKR (KKR) Partner and Head of Real Estate Equity in the Americas, Justin Pattner, said, “We are thrilled to be building on our deep commitment to the West Coast real estate market with the purchase of this premier property in Mission Bay, a highly attractive location serving as a world-class innovation center.”

Pattner also noted, “We remain focused on opportunities to add quality real estate assets to our portfolios, and The Exchange is a prime example. We believe our long-term investment is supported by the region’s robust academic and business community, accompanied by its impressive talent base.” (See KKR stock analysis on TipRanks)

Notably, the office complex has a laboratory ready infrastructure for life science tenancy and is completely leased at present to a technology company.

Recently, BMO Capital analyst James Fotheringham reiterated a Buy rating on the stock and raised the price target to $72 (47.4% upside potential) from $54.

Fotheringham commented that the market fails to fully appreciate the value of KKR’s  “meaningful excess capital.”

Turning to the rest of the Street, the stock has a Moderate Buy consensus rating alongside an average analyst price target of $53.55 (9.6% upside potential), based on 8 Buys and 3 Holds. Shares have gained about 100.6% over the past year.

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