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1. Company Snapshot

1.a. Company Description

Kilroy Realty Corporation (NYSE: KRC, the “company”, “KRC”) is a leading West Coast landlord and developer, with a major presence in San Diego, Greater Los Angeles, the San Francisco Bay Area, and the Pacific Northwest.The company has earned global recognition for sustainability, building operations, innovation and design.As pioneers and innovators in the creation of a more sustainable real estate industry, the company's approach to modern business environments helps drive creativity, productivity and employee retention for some of the world's leading technology, entertainment, life science and business services companies.


KRC is a publicly traded real estate investment trust (“REIT”) and member of the S&P MidCap 400 Index with more than seven decades of experience developing, acquiring and managing office and mixed-use projects.As of September 30, 2020, KRC's stabilized portfolio totaled approximately 14.3 million square feet of primarily office and life science space that was 92.2% occupied and 95.5% leased.The company also had 808 residential units in Hollywood and San Diego, which had a quarterly average occupancy of 85.0% and 37.5%, respectively.


In addition, KRC had seven in-process development projects with an estimated total investment of $1.9 billion, totaling approximately 2.3 million square feet of office and life science space.The office and life science space was 90% leased.

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1.b. Last Insights on KRC

Kilroy Realty Corporation's recent performance was negatively impacted by its Q4 2025 earnings miss, with FFO of $0.97 per share, falling short of the Zacks Consensus Estimate of $0.98 per share. This decline from $1.2 per share a year ago likely concerned investors. Additionally, Foresight Group Ltd Liability Partnership reduced its stake in the company by 41.4%, potentially signaling decreased investor confidence. Despite a "Hold" rating from brokerages, with one analyst issuing a sell rating, the company's cash flow concerns and 27-year dividend streak may be at risk if improvements are not made.

1.c. Company Highlights

2. Kilroy Realty's 4Q '25 Earnings: A Year of Disciplined Execution

Kilroy Realty reported FFO of $0.97 per diluted share in the fourth quarter, slightly below estimates of $0.98. The company's occupancy ended the year at 81.6%, and its 2026 FFO guidance range is $3.25 to $3.45 per diluted share, representing a midpoint of $3.35. Revenue growth is expected to be around 2.9% next year, according to analyst estimates. With a P/E Ratio of 13.69 and an EV/EBITDA of 10.42, the market seems to have priced in a moderate growth trajectory for the company.

Publication Date: Feb -16

📋 Highlights
  • Leasing Momentum: Executed 93,000 sq ft new lease with Fitler Club, 79,000 sq ft Riot Games renewal, and 230 bps lease rate improvement at Maple Plaza in Q4 2025.
  • Capital Recycling: Sold $755M in assets (465M operating, 165M land) in 2025, including Sunset Media Center ($61M) and Kilroy Sabre Springs ($125M), targeting $300M in 2026.
  • FFO Guidance: 2026 FFO range: $3.25–$3.45/share (midpoint $3.35), with occupancy projected at 76–78% and cash same-property NOI growth flat to -1.5%.
  • Development Impact: KOP 2 and Flower Mart to drive 2026 NOI guidance of -$23.5M to -$25M, with $7M quarterly capitalized interest (Flower Mart) and $1M real estate taxes.

Operational Highlights

The company achieved significant leasing milestones in the quarter, including a 93,000 square foot new lease with the Fitler Club in Hollywood and a 79,000 square foot renewal with Riot Games in West L.A. Kilroy also executed 316,000 square feet of lease executions at Kilroy Oyster Point Phase 2, including a 280,000 square foot full building lease with UCSF. As Angela Aman noted, "2025 was a year of meaningful progress and momentum for Kilroy, highlighted by disciplined execution across our entire platform."

Capital Allocation and Portfolio Repositioning

In 2025, Kilroy closed or entered into contracts on roughly $755 million of sales, including $465 million of operating property sales and $165 million of land sales. The company acquired Nautilus, a multi-tenant life science campus in Torrey Pines, for $192 million, strengthening its San Diego presence. Kilroy plans to continue its balanced and disciplined approach to capital allocation, prioritizing balance sheet strength and flexibility.

Guidance and Outlook

The company's 2026 guidance includes average occupancy expected to range between 76% and 78%, with cash same-property NOI growth projected to be flat to negative 1.5% at the midpoint of the range. Kilroy expects to complete approximately $325 million of operating dispositions in 2026. With a Dividend Yield of 6.8% and a Free Cash Flow Yield of 7.74%, the company appears to be offering an attractive return to investors.

Valuation and Return Metrics

With a P/B Ratio of 0.7 and an ROE of 5.11%, Kilroy's valuation seems reasonable compared to its book value. The company's ROIC is 34.73%, indicating a strong ability to generate returns on invested capital. As Kilroy continues to execute on its leasing and capital allocation strategy, investors will be watching to see if the company can deliver on its growth expectations.

3. NewsRoom

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Brokerages Set Kilroy Realty Corporation (NYSE:KRC) Price Target at $38.93

Mar -09

Source: defenseworld.net

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Kilroy Realty Corporation (KRC) Presents at Citi's Miami Global Property CEO Conference 2026 Transcript

Mar -02

Source: seekingalpha.com

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REIT Replay: U.S. REIT Indexes Outperform Broader Market During Last Week Of Feb.

Mar -02

Source: seekingalpha.com

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Kilroy Realty Corporation to Participate in Citi's 2026 Global Property CEO Conference

Feb -26

Source: businesswire.com

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Kilroy Realty Corporation Announces Board Refreshment

Feb -26

Source: businesswire.com

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Readers Spot 8 Ideal Buys Out Of 17 'Safer' Dividend Dogs In January

Feb -19

Source: seekingalpha.com

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REIT Replay: Office REIT Stocks Plummet In Recent Week Amid Growing AI Fears

Feb -18

Source: seekingalpha.com

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Caprock Group LLC Invests $1.74 Million in Kilroy Realty Corporation $KRC

Feb -14

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.00%)

6. Segments

Fixed Lease Payments

Expected Growth: 3.0%

Kilroy Realty Corporation's 3.0% growth in fixed lease payments is driven by a strong demand for office spaces in prime locations, steady rent increases, and a high occupancy rate of 92%. Additionally, the company's strategic acquisitions and developments in high-growth markets, such as San Francisco and Los Angeles, contribute to the growth.

Variable Lease Payments

Expected Growth: 3.0%

Kilroy Realty Corporation's 3.0% growth in Variable Lease Payments is driven by increasing demand for Class A office spaces, strategic lease renewals and expansions, and rising rental rates in prime markets such as San Francisco and Los Angeles. Additionally, the company's focus on sustainability and amenity-rich properties attracts high-quality tenants, contributing to the growth.

Other Property

Expected Growth: 3.0%

Kilroy Realty's Other Property segment growth is driven by increasing demand for life science and technology spaces, strategic acquisitions, and redevelopment of existing properties. Additionally, the company's focus on sustainability and energy-efficient buildings attracts tenants willing to pay premiums, contributing to the 3.0% growth rate.

Net Collectability (Reversals) Recoveries

Expected Growth: 3.0%

Kilroy Realty Corporation's 3.0% growth in Net Collectability (Reversals) Recoveries is driven by effective lease administration, improved tenant credit quality, and enhanced billing processes. Additionally, strategic asset management and proactive rent collection efforts have contributed to the increase in recoveries.

7. Detailed Products

Office Properties

Kilroy Realty Corporation offers a range of office properties, including Class A office buildings, campus-style office parks, and mixed-use developments.

Life Science Properties

The company provides specialized life science properties, including laboratory and research facilities, designed to meet the unique needs of life science companies.

Industrial Properties

Kilroy Realty Corporation offers industrial properties, including warehouse and distribution facilities, to support the logistics and supply chain needs of companies.

Mixed-Use Developments

The company develops and owns mixed-use projects, combining office, retail, and residential spaces to create vibrant, walkable communities.

Sustainable and Energy-Efficient Properties

Kilroy Realty Corporation prioritizes sustainability and energy efficiency in its properties, incorporating green building practices and renewable energy systems.

8. Kilroy Realty Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

Kilroy Realty Corporation operates in a competitive industry, but the threat of substitutes is mitigated by the company's focus on high-quality, Class A office properties in prime locations.

Bargaining Power Of Customers

Kilroy Realty Corporation's customers are primarily large, credit-worthy tenants, which reduces the bargaining power of customers.

Bargaining Power Of Suppliers

Kilroy Realty Corporation has a diversified supplier base, which reduces the bargaining power of suppliers.

Threat Of New Entrants

The commercial real estate industry has high barriers to entry, including significant capital requirements and regulatory hurdles, which reduces the threat of new entrants.

Intensity Of Rivalry

Kilroy Realty Corporation operates in a highly competitive industry, with many established players competing for tenants and market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 52.43%
Debt Cost 4.54%
Equity Weight 47.57%
Equity Cost 9.11%
WACC 6.71%
Leverage 110.21%

11. Quality Control: Kilroy Realty Corporation passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
COPT Defense

A-Score: 6.3/10

Value: 4.5

Growth: 4.7

Quality: 5.7

Yield: 8.0

Momentum: 5.0

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
Kilroy Realty

A-Score: 6.3/10

Value: 5.5

Growth: 3.9

Quality: 5.8

Yield: 8.0

Momentum: 7.0

Volatility: 7.7

1-Year Total Return ->

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Stock-Card
Highwoods Properties

A-Score: 6.2/10

Value: 6.0

Growth: 3.1

Quality: 5.5

Yield: 10.0

Momentum: 4.0

Volatility: 8.3

1-Year Total Return ->

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Stock-Card
Boston Properties

A-Score: 5.4/10

Value: 5.7

Growth: 3.2

Quality: 4.1

Yield: 8.0

Momentum: 4.0

Volatility: 7.3

1-Year Total Return ->

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Stock-Card
Douglas Emmett

A-Score: 4.9/10

Value: 4.7

Growth: 4.6

Quality: 3.3

Yield: 9.0

Momentum: 1.5

Volatility: 6.3

1-Year Total Return ->

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Stock-Card
SL Green Realty

A-Score: 3.9/10

Value: 2.5

Growth: 0.9

Quality: 3.8

Yield: 9.0

Momentum: 2.0

Volatility: 5.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

29.41$

Current Price

29.41$

Potential

-0.00%

Expected Cash-Flows