SAN FRANCISCO—Kilroy Realty Corporation agreedto acquired all the outstanding shares of San FranciscoFlowers Growers' Association, in order to obtain a1.9 acre development parcel in SOMA for $27million.

San Francisco Flower Growers (SFFGA) is a privately owned entitywhose only material asset as of the closing of the proposed mergeris the land site. The 1.9 acre site of the San FranciscoFlower Mart is located at the corner of BrannanStreet and 6^thStreet in Central SOMA, a prime San Francisco areabetween Showplace Square and the South Financial district. Theacquisition will be financed by KRC directly issuing approximately$22.0 million of its common stock to SFFGAshareholders and the immediate repayment of approximately$4.6 million of outstanding debt and transactionrelated expenses.

KRC's acquisition of SFFGA is contingent upon theadoption of the merger agreement and the approval of theprincipal terms of the merger by SFFGA's shareholders holding amajority of the outstanding shares of SFFGA common stock. It isanticipated that the proposed transaction will close by the end ofthe year.