Deferred Leasing Costs and Acquisition-related Intangible Assets and Liabilities, net (Tables)

9 Months Ended

Sep. 30, 2013

Intangible Assets and Liabilities Disclosure [Abstract]

Summary of identified deferred leasing costs and acquisition-related intangible assets and liabilities [Table Text Block]

The following table summarizes our deferred leasing costs and acquisition-related intangible assets (acquired value of leasing costs, above-market operating leases, in-place leases and below-market ground lease obligation) and intangible liabilities (acquired value of below-market operating leases and above-market ground lease obligation) as of September 30, 2013 and December 31, 2012:



	September 30, 2013			December 31, 2012
	(in thousands)
Deferred Leasing Costs and Acquisition-related Intangible Assets, net:
Deferred leasing costs	$	170,609		$	168,087
Accumulated amortization	(59,943		)	(61,443		)
Deferred leasing costs, net	110,666			106,644
Above-market operating leases	28,842			27,977
Accumulated amortization	(14,038		)	(12,180		)
Above-market operating leases, net	14,804			15,797
In-place leases	108,612			101,061
Accumulated amortization	(44,476		)	(34,019		)
In-place leases, net	64,136			67,042
Below-market ground lease obligation	490			690
Accumulated amortization	(11		)	(205		)
Below-market ground lease obligation, net	479			485
Total deferred leasing costs and acquisition-related intangible assets, net	$	190,085		$	189,968
Acquisition-related Intangible Liabilities, net: ⁽¹⁾
Below-market operating leases	$	70,966		$	70,486
Accumulated amortization	(24,074		)	(17,555		)
Below-market operating leases, net	46,892			52,931
Above-market ground lease obligation	6,320			6,320
Accumulated amortization	(198		)	(122		)
Above-market ground lease obligation, net	6,122			6,198
Total acquisition-related intangible liabilities, net	$	53,014		$	59,129

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(1)	Included in deferred revenue and acquisition-related intangible liabilities, net in the consolidated balance sheets.

Schedule Of Finite Lived Intangible Assets and Liabilities Amortization Expense [Table Text Block]

The following table sets forth amortization related to deferred leasing costs and acquisition-related intangibles, including amounts attributable to discontinued operations, for the three and nine months ended September 30, 2013 and 2012:



	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
	(in thousands)
Deferred leasing costs ⁽¹⁾	$	6,945		$	5,238		$	20,882		$	14,126
Above-market operating leases ⁽²⁾	1,417			1,459			4,214			4,205
In-place leases ⁽¹⁾	7,677			6,479			22,546			14,858
Below-market ground lease obligation ⁽³⁾	2			52			6			153
Below-market operating leases ⁽⁴⁾	(3,355		)	(3,487		)	(10,229		)	(8,821		)
Above-market ground lease obligation ⁽⁵⁾	(25		)	(25		)	(76		)	(60		)
Total	$	12,661		$	9,716		$	37,343		$	24,461

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(1)	The amortization of deferred leasing costs and in-place leases is recorded to depreciation and amortization expense in the consolidated statements of operations for the periods presented.


(2)	The amortization of above-market operating leases is recorded as a decrease to rental income in the consolidated statements of operations for the periods presented.


(3)	The amortization of the below-market ground lease obligation is recorded as an increase to ground lease expense in the consolidated statements of operations for the periods presented.


(4)	The amortization of below-market operating leases is recorded as an increase to rental income in the consolidated statements of operations for the periods presented.


(5)	The amortization of the above-market ground lease obligation is recorded as a decrease to ground lease expense in the consolidated statements of operations for the periods presented.

ScheduleofFiniteLivedIntangibleAssetsAndLiabilitiesFutureAmortizationExpense [Table Text Block]

The following table sets forth the estimated annual amortization expense related to deferred leasing costs and acquisition-related intangibles as of September 30, 2013 for future periods:



Year	Deferred Leasing Costs		Above-Market Operating Leases ⁽¹⁾		In-Place Leases		Below-Market Ground Lease Obligation ⁽²⁾		Below-Market Operating Leases ⁽³⁾			Above-Market Ground Lease Obligation ⁽⁴⁾
	(in thousands)
Remaining 2013	$	6,384	$	1,367	$	6,549	$	2	$	(3,201	)	$	(25	)
2014	23,533		4,837		19,053		8		(11,903		)	(101		)
2015	19,669		3,035		12,676		8		(9,385		)	(101		)
2016	16,920		2,007		9,445		8		(7,195		)	(101		)
2017	14,468		1,690		7,744		8		(6,127		)	(101		)
Thereafter	29,692		1,868		8,669		445		(9,081		)	(5,693		)
Total	$	110,666	$	14,804	$	64,136	$	479	$	(46,892	)	$	(6,122	)

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(1)	Represents estimated annual amortization related to above-market operating leases. Amounts will be recorded as a decrease to rental income in the consolidated statements of operations.


(2)	Represents estimated annual amortization related to below-market ground lease obligations. Amounts will be recorded as an increase to ground lease expense in the consolidated statements of operations.


(3)	Represents estimated annual amortization related to below-market operating leases. Amounts will be recorded as an increase to rental income in the consolidated statements of operations.


(4)	Represents estimated annual amortization related to above-market ground lease obligations. Amounts will be recorded as a decrease to ground lease expense in the consolidated statements of operations.

Kilroy Realty, L.P. 10-Q