we assume no obligation to update any forward-looking statement that becomes untrue because of subsequent events , new information or otherwise , except to the extent we are required to do so in connection with our ongoing requirements under federal securities laws . company overview we are a self-administered reit active in premier office submarkets along the west coast . we own , develop , acquire and manage real estate assets , consisting primarily of class a properties in the coastal regions of los angeles , orange county , san diego county , the san francisco bay area and greater seattle , which we believe have strategic advantages and strong barriers to entry . we own our interests in all of our real estate assets through the operating partnership and the finance partnership . we conduct substantially all of our operations through the operating partnership . we owned a 97.8 % and 97.6 % general partnership interest in the operating partnership as of december 31 , 2013 and 2012 , respectively . all our properties are held in fee except for the eleven office buildings which are held subject to long-term ground leases for the land ( see note 15 “ commitments and contingencies ” to our consolidated financial statements included in this report for additional information regarding our ground lease obligations ) . 2013 highlights we made significant progress on several fronts during 2013 , and are well-positioned for continued long-term growth through our strong leasing performance , well timed acquisitions , development and redevelopment efforts , ongoing capital recycling program and successful financing activities . leasing . during 2013 , we executed new and renewal office leases on 2.2 million square feet , marking the sixth consecutive year that krc has achieved full-year leasing of two million square feet . as a result of our consistent and successful leasing efforts , occupancy in our stabilized office portfolio increased to 93.4 % as of december 31 , 2013 , up from 92.8 % as of december 31 , 2012 . operating property acquisitions . we remain a disciplined buyer of office properties and continue to focus on value-add opportunities in west coast markets populated by knowledge and creative based tenants in a variety of industries , including technology , media , healthcare , entertainment and professional services . during 2013 , we acquired two office buildings in greater seattle and two office buildings and an undeveloped land parcel in the del mar submarket of san diego county encompassing approximately 540,000 rentable square feet for a total purchase price of approximately $ 296.4 million ( see note 3 “ acquisitions ” to our consolidated financial statements included in this report for more information ) . development . during 2013 , we continued our focus on value-add and highly accretive development opportunities and expanded our future development pipeline through targeted acquisitions of development opportunities on the west coast . in 2013 , we acquired two land sites in redwood city , california and formed a new consolidated subsidiary , redwood city partners , llc ( see note 3 “ acquisitions ” to our consolidated financial statements included in this report for more information ) and in the fourth quarter we commenced construction of an approximately 300,000 square foot office space ( the “ crossing/900 ” project ) at these sites . additionally , in december 2013 , we acquired the academy project , a los angeles development opportunity , located in the hollywood submarket , and added it to our future development pipeline . following an anticipated 18 to 24 month entitlement process , we plan to develop a mixed-use , media-oriented campus that will include approximately 475,000 square feet of low- and mid-rise office space , apartments and retail space . 43 during 2013 , we completed one development project , 331 fairchild drive in the san francisco bay area with a total investment of approximately $ 44.7 million and added this property to our stabilized portfolio . as of december 31 , 2013 , the company had six development projects under construction , four of which are 100 % preleased . these six projects aggregate approximately 2.5 million square feet of space , and the company estimates its total investment in these projects will be approximately $ 1.5 billion . the total estimated investment includes lease commissions and excludes tenant improvement overages . scheduled completion dates range from 2014 to 2016. see “ —factors that may influence future operations – in-process and future development pipeline ” for additional information . redevelopment . during 2013 , we moved one redevelopment project , 3880 kilroy airport way in the long beach submarket of los angeles from our lease-up portfolio to our stabilized portfolio . this project has a total investment of approximately $ 19.7 million and was 100 % leased at stabilization . see “ —factors that may influence future operations – redevelopment ” for additional information . capital recycling program . we have continued to utilize our capital recycling program to provide additional capital to fund potential acquisitions , to finance development and redevelopment expenditures , to potentially repay long-term debt and for other general corporate purposes . our general strategy is to target the disposition of mature properties or those that have limited upside for us and redeploy some or all of the capital into acquisitions where we can add additional value to generate higher returns ( see “ —factors that may influence future operations ” for additional information ) . in connection with this strategy , during 2013 , we completed the sale of three office buildings to unaffiliated third parties in three separate transactions . gross sales proceeds totaled approximately $ 56.9 million of which $ 32.2 million was held at qualified intermediaries at december 31 , 2013 for potential future section 1031 exchanges . story_separator_special_tag during the years ended december 31 , 2013 and 2012 , we capitalized $ 2.3 million and $ 0.7 million , respectively , of such acquisition costs . we did not capitalize any acquisition costs during the year ended december 31 , 2011. evaluation of asset impairment we evaluate our real estate assets for potential impairment whenever events or changes in circumstances indicate that the carrying amount of a given asset may not be recoverable . we evaluate our real estate assets for impairment on a property-by-property basis . indicators we use to determine whether an impairment evaluation is necessary include : low occupancy levels or forecasted low occupancy levels at a specific property ; current period operating or cash flow losses combined with a historical pattern or future projection of potential continued operating or cash flow losses at a specific property ; deterioration in rental rates for a specific property as evidenced by sudden significant rental rate decreases or continuous rental rate decreases over numerous quarters , which could signal a continued decrease in future cash flow for that property ; deterioration of a given rental submarket as evidenced by significant increases in market vacancy and or negative absorption rates or continuous increases in market vacancy and or negative absorption rates over numerous quarters , which could signal a decrease in future cash flow for properties within that submarket ; significant increases in property sales yields , continuous increases in property sales yields over several quarters , or recent property sales at a loss within a given submarket , each of which could signal a decrease in the market value of properties ; significant change in strategy or use of a specific property or any other event that could result in a decreased holding period , including classifying a property as held for sale , or significant development delay ; evidence of material physical damage to the property ; and default by a significant tenant when any of the other indicators above are present . when we evaluate for potential impairment our real estate assets to be held and used , we first evaluate whether there are any indicators of impairment . if any impairment indicators are present for a specific real estate asset , we then perform an undiscounted cash flow analysis and compare the net carrying amount of the real estate asset to the real estate asset 's estimated undiscounted future cash flow over the anticipated holding period . if the estimated undiscounted future cash flow is less than the net carrying amount of the real estate asset , we perform an impairment loss calculation to determine if the fair value of the real estate asset is less than the net carrying value of the real estate asset . our impairment loss calculation compares the net carrying amount of the real estate asset to the real estate asset 's estimated fair value , which may be based on estimated discounted future cash flow calculations or third-party valuations or appraisals . we recognize an impairment loss if the amount of the asset 's net carrying amount exceeds the asset 's estimated fair value . if we recognize an impairment loss , the estimated fair value of the asset becomes its new cost 48 basis . for a depreciable long-lived asset , the new cost basis will be depreciated ( amortized ) over the remaining useful life of that asset . our undiscounted cash flow and fair value calculations contain uncertainties because they require management to make assumptions and to apply judgment to estimate future cash flow and property fair values , including selecting the discount or capitalization rate that reflects the risk inherent in future cash flow . estimating projected cash flow is highly subjective as it requires assumptions related to future rental rates , tenant allowances , operating expenditures , property taxes , capital improvements , and occupancy levels . we are also required to make a number of assumptions relating to future economic and market events and prospective operating trends . determining the appropriate capitalization rate also requires significant judgment and is typically based on many factors including the prevailing rate for the market or submarket , as well as the quality and location of the properties . further , capitalization rates can fluctuate resulting from a variety of factors in the overall economy or within regional markets . if the actual net cash flow or actual market capitalization rates significantly differ from our estimates , the impairment evaluation for an individual asset could be materially affected . for each property where such an indicator occurred and or for properties within a given submarket where such an indicator occurred , we completed an impairment evaluation . after completing this process , we determined that for each of the operating properties evaluated , undiscounted cash flows over the holding period were in excess of carrying value and , therefore , we did not record any impairment losses for these periods . we determined that for each of the properties held for sale , that the sale price less estimated costs to sell exceeded the carrying value and therefore we did not record any impairment losses for these properties . cost capitalization and depreciation we capitalize costs associated with development and redevelopment activities , capital improvements , tenant improvements , and leasing activities . for the years ended december 31 , 2013 , 2012 and 2011 , we capitalized $ 7.3 million , $ 3.1 million , and $ 1.7 million , respectively , of internal costs to our qualifying redevelopment and development projects . amounts capitalized are depreciated or amortized over estimated useful lives determined by management . we depreciate buildings and improvements based on the estimated useful life of the asset , and we amortize tenant improvements and leasing costs over the shorter of the estimated useful life or estimated remaining life of the related lease . all capitalized costs are depreciated or amortized using the

debt covenants the covenants contained within the revolving credit facility and the term loan facility prohibit the company from paying dividends in excess of 95 % of ffo . capitalization as of december 31 , 2013 , our total debt as a percentage of total market capitalization was 33.2 % and our total debt and liquidation value of our preferred equity as a percentage of total market capitalization was 36.3 % , which was calculated based on the closing price per share of the company 's common stock of $ 50.18 on december 31 , 2013 as shown in the following table : replace_table_token_34_th ( 1 ) represents gross aggregate principal amount due at maturity before the effect of net unamortized premiums as of december 31 , 2013 . the aggregate net unamortized premiums totaled approximately $ 8.6 million as of december 31 , 2013 . ( 2 ) value based on $ 25.00 per share liquidation preference . ( 3 ) represents common units not owned by the company . ( 4 ) value based on closing price per share of our common stock of $ 50.18 as of december 31 , 2013 . 66 liquidity and capital resources of the operating partnership in this “ liquidity and capital resources of the operating partnership ” section , the terms “ we , ” “ our , ” and “ us ” refer to the operating partnership or the operating partnership and the company together , as the context requires . general our primary liquidity sources and uses are as follows : liquidity sources net cash flow from operations ; borrowings under the operating partnership 's revolving credit facility and term loan facility ; proceeds from additional secured or unsecured debt financings ; proceeds from public or private issuance of debt or equity securities ; and proceeds from the disposition of selective assets through our capital recycling program . liquidity uses property or undeveloped land acquisitions ; property operating and corporate expenses ; capital expenditures , tenant improvement and leasing costs ; debt service and principal payments , including debt maturities ; distributions to common and preferred security holders ; development and redevelopment costs ; and outstanding debt repurchases .


 Write a concise suspicious activity report of the following text delimited by triple backquotes. Return your response as a formal report which covers the key points highlighting the location,dates,entity names and account holder information in chronological order of the text.
     ```debt covenants the covenants contained within the revolving credit facility and the term loan facility prohibit the company from paying dividends in excess of 95 % of ffo . capitalization as of december 31 , 2013 , our total debt as a percentage of total market capitalization was 33.2 % and our total debt and liquidation value of our preferred equity as a percentage of total market capitalization was 36.3 % , which was calculated based on the closing price per share of the company 's common stock of $ 50.18 on december 31 , 2013 as shown in the following table : replace_table_token_34_th ( 1 ) represents gross aggregate principal amount due at maturity before the effect of net unamortized premiums as of december 31 , 2013 . the aggregate net unamortized premiums totaled approximately $ 8.6 million as of december 31 , 2013 . ( 2 ) value based on $ 25.00 per share liquidation preference . ( 3 ) represents common units not owned by the company . ( 4 ) value based on closing price per share of our common stock of $ 50.18 as of december 31 , 2013 . 66 liquidity and capital resources of the operating partnership in this “ liquidity and capital resources of the operating partnership ” section , the terms “ we , ” “ our , ” and “ us ” refer to the operating partnership or the operating partnership and the company together , as the context requires . general our primary liquidity sources and uses are as follows : liquidity sources net cash flow from operations ; borrowings under the operating partnership 's revolving credit facility and term loan facility ; proceeds from additional secured or unsecured debt financings ; proceeds from public or private issuance of debt or equity securities ; and proceeds from the disposition of selective assets through our capital recycling program . liquidity uses property or undeveloped land acquisitions ; property operating and corporate expenses ; capital expenditures , tenant improvement and leasing costs ; debt service and principal payments , including debt maturities ; distributions to common and preferred security holders ; development and redevelopment costs ; and outstanding debt repurchases .
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 Suspicious Activity Report : we assume no obligation to update any forward-looking statement that becomes untrue because of subsequent events , new information or otherwise , except to the extent we are required to do so in connection with our ongoing requirements under federal securities laws . company overview we are a self-administered reit active in premier office submarkets along the west coast . we own , develop , acquire and manage real estate assets , consisting primarily of class a properties in the coastal regions of los angeles , orange county , san diego county , the san francisco bay area and greater seattle , which we believe have strategic advantages and strong barriers to entry . we own our interests in all of our real estate assets through the operating partnership and the finance partnership . we conduct substantially all of our operations through the operating partnership . we owned a 97.8 % and 97.6 % general partnership interest in the operating partnership as of december 31 , 2013 and 2012 , respectively . all our properties are held in fee except for the eleven office buildings which are held subject to long-term ground leases for the land ( see note 15 “ commitments and contingencies ” to our consolidated financial statements included in this report for additional information regarding our ground lease obligations ) . 2013 highlights we made significant progress on several fronts during 2013 , and are well-positioned for continued long-term growth through our strong leasing performance , well timed acquisitions , development and redevelopment efforts , ongoing capital recycling program and successful financing activities . leasing . during 2013 , we executed new and renewal office leases on 2.2 million square feet , marking the sixth consecutive year that krc has achieved full-year leasing of two million square feet . as a result of our consistent and successful leasing efforts , occupancy in our stabilized office portfolio increased to 93.4 % as of december 31 , 2013 , up from 92.8 % as of december 31 , 2012 . operating property acquisitions . we remain a disciplined buyer of office properties and continue to focus on value-add opportunities in west coast markets populated by knowledge and creative based tenants in a variety of industries , including technology , media , healthcare , entertainment and professional services . during 2013 , we acquired two office buildings in greater seattle and two office buildings and an undeveloped land parcel in the del mar submarket of san diego county encompassing approximately 540,000 rentable square feet for a total purchase price of approximately $ 296.4 million ( see note 3 “ acquisitions ” to our consolidated financial statements included in this report for more information ) . development . during 2013 , we continued our focus on value-add and highly accretive development opportunities and expanded our future development pipeline through targeted acquisitions of development opportunities on the west coast . in 2013 , we acquired two land sites in redwood city , california and formed a new consolidated subsidiary , redwood city partners , llc ( see note 3 “ acquisitions ” to our consolidated financial statements included in this report for more information ) and in the fourth quarter we commenced construction of an approximately 300,000 square foot office space ( the “ crossing/900 ” project ) at these sites . additionally , in december 2013 , we acquired the academy project , a los angeles development opportunity , located in the hollywood submarket , and added it to our future development pipeline . following an anticipated 18 to 24 month entitlement process , we plan to develop a mixed-use , media-oriented campus that will include approximately 475,000 square feet of low- and mid-rise office space , apartments and retail space . 43 during 2013 , we completed one development project , 331 fairchild drive in the san francisco bay area with a total investment of approximately $ 44.7 million and added this property to our stabilized portfolio . as of december 31 , 2013 , the company had six development projects under construction , four of which are 100 % preleased . these six projects aggregate approximately 2.5 million square feet of space , and the company estimates its total investment in these projects will be approximately $ 1.5 billion . the total estimated investment includes lease commissions and excludes tenant improvement overages . scheduled completion dates range from 2014 to 2016. see “ —factors that may influence future operations – in-process and future development pipeline ” for additional information . redevelopment . during 2013 , we moved one redevelopment project , 3880 kilroy airport way in the long beach submarket of los angeles from our lease-up portfolio to our stabilized portfolio . this project has a total investment of approximately $ 19.7 million and was 100 % leased at stabilization . see “ —factors that may influence future operations – redevelopment ” for additional information . capital recycling program . we have continued to utilize our capital recycling program to provide additional capital to fund potential acquisitions , to finance development and redevelopment expenditures , to potentially repay long-term debt and for other general corporate purposes . our general strategy is to target the disposition of mature properties or those that have limited upside for us and redeploy some or all of the capital into acquisitions where we can add additional value to generate higher returns ( see “ —factors that may influence future operations ” for additional information ) . in connection with this strategy , during 2013 , we completed the sale of three office buildings to unaffiliated third parties in three separate transactions . gross sales proceeds totaled approximately $ 56.9 million of which $ 32.2 million was held at qualified intermediaries at december 31 , 2013 for potential future section 1031 exchanges . story_separator_special_tag during the years ended december 31 , 2013 and 2012 , we capitalized $ 2.3 million and $ 0.7 million , respectively , of such acquisition costs . we did not capitalize any acquisition costs during the year ended december 31 , 2011. evaluation of asset impairment we evaluate our real estate assets for potential impairment whenever events or changes in circumstances indicate that the carrying amount of a given asset may not be recoverable . we evaluate our real estate assets for impairment on a property-by-property basis . indicators we use to determine whether an impairment evaluation is necessary include : low occupancy levels or forecasted low occupancy levels at a specific property ; current period operating or cash flow losses combined with a historical pattern or future projection of potential continued operating or cash flow losses at a specific property ; deterioration in rental rates for a specific property as evidenced by sudden significant rental rate decreases or continuous rental rate decreases over numerous quarters , which could signal a continued decrease in future cash flow for that property ; deterioration of a given rental submarket as evidenced by significant increases in market vacancy and or negative absorption rates or continuous increases in market vacancy and or negative absorption rates over numerous quarters , which could signal a decrease in future cash flow for properties within that submarket ; significant increases in property sales yields , continuous increases in property sales yields over several quarters , or recent property sales at a loss within a given submarket , each of which could signal a decrease in the market value of properties ; significant change in strategy or use of a specific property or any other event that could result in a decreased holding period , including classifying a property as held for sale , or significant development delay ; evidence of material physical damage to the property ; and default by a significant tenant when any of the other indicators above are present . when we evaluate for potential impairment our real estate assets to be held and used , we first evaluate whether there are any indicators of impairment . if any impairment indicators are present for a specific real estate asset , we then perform an undiscounted cash flow analysis and compare the net carrying amount of the real estate asset to the real estate asset 's estimated undiscounted future cash flow over the anticipated holding period . if the estimated undiscounted future cash flow is less than the net carrying amount of the real estate asset , we perform an impairment loss calculation to determine if the fair value of the real estate asset is less than the net carrying value of the real estate asset . our impairment loss calculation compares the net carrying amount of the real estate asset to the real estate asset 's estimated fair value , which may be based on estimated discounted future cash flow calculations or third-party valuations or appraisals . we recognize an impairment loss if the amount of the asset 's net carrying amount exceeds the asset 's estimated fair value . if we recognize an impairment loss , the estimated fair value of the asset becomes its new cost 48 basis . for a depreciable long-lived asset , the new cost basis will be depreciated ( amortized ) over the remaining useful life of that asset . our undiscounted cash flow and fair value calculations contain uncertainties because they require management to make assumptions and to apply judgment to estimate future cash flow and property fair values , including selecting the discount or capitalization rate that reflects the risk inherent in future cash flow . estimating projected cash flow is highly subjective as it requires assumptions related to future rental rates , tenant allowances , operating expenditures , property taxes , capital improvements , and occupancy levels . we are also required to make a number of assumptions relating to future economic and market events and prospective operating trends . determining the appropriate capitalization rate also requires significant judgment and is typically based on many factors including the prevailing rate for the market or submarket , as well as the quality and location of the properties . further , capitalization rates can fluctuate resulting from a variety of factors in the overall economy or within regional markets . if the actual net cash flow or actual market capitalization rates significantly differ from our estimates , the impairment evaluation for an individual asset could be materially affected . for each property where such an indicator occurred and or for properties within a given submarket where such an indicator occurred , we completed an impairment evaluation . after completing this process , we determined that for each of the operating properties evaluated , undiscounted cash flows over the holding period were in excess of carrying value and , therefore , we did not record any impairment losses for these periods . we determined that for each of the properties held for sale , that the sale price less estimated costs to sell exceeded the carrying value and therefore we did not record any impairment losses for these properties . cost capitalization and depreciation we capitalize costs associated with development and redevelopment activities , capital improvements , tenant improvements , and leasing activities . for the years ended december 31 , 2013 , 2012 and 2011 , we capitalized $ 7.3 million , $ 3.1 million , and $ 1.7 million , respectively , of internal costs to our qualifying redevelopment and development projects . amounts capitalized are depreciated or amortized over estimated useful lives determined by management . we depreciate buildings and improvements based on the estimated useful life of the asset , and we amortize tenant improvements and leasing costs over the shorter of the estimated useful life or estimated remaining life of the related lease . all capitalized costs are depreciated or amortized using the

