News Details

LOS ANGELES--(BUSINESS WIRE)-- Kilroy Realty Corporation (NYSE: KRC) (“Kilroy” or the “Company”) today reported financial results for the third quarter ended September 30, 2025.

“Our third quarter results continued to demonstrate the momentum that is building across every component of our business, with strong new leasing activity across both the stabilized and development portfolios, and significant, previously announced capital recycling and capital markets activity,” said Angela Aman, CEO. “With 84,000 square feet now executed at Kilroy Oyster Point Phase 2, we are well positioned to exceed our previously communicated goal of 100,000 square feet of lease executions at the project by year end 2025, as the quality of Kilroy Oyster Point resonates with a growing number of prospects in the market.”

Financial Results

• Revenues of $279.7 million for the quarter ended September 30, 2025, as compared to $289.9 million for the quarter ended September 30, 2024
• Net income available to common stockholders of $156.2 million, or $1.31 per diluted share, for the quarter ended September 30, 2025, as compared to $52.4 million, or $0.44 per diluted share, for the quarter ended September 30, 2024
• Funds from operations (“FFO”) of $130.6 million, or $1.08 per diluted share, for the quarter ended September 30, 2025, as compared to $140.4 million, or $1.17 per diluted share, for the quarter ended September 30, 2024

Leasing and Occupancy

• Stabilized Portfolio was 81.0% occupied and 83.3% leased at September 30, 2025, representing 230 basis points of leases signed that have not commenced
  • Occupancy during the quarter benefited from approximately 200,000 square feet of early rent commencements that were originally projected to take occupancy in the fourth quarter
• During the quarter, signed approximately 552,000 square feet of leases
  • Leasing activity was comprised of 237,000 square feet of new leasing on previously vacant space and 315,000 square feet of renewal leasing
    • At Kilroy Oyster Point Phase 2 (“KOP 2”), signed 68,000 square feet of new leases, including the previously announced 24,000 square foot lease with Color, as well as a 44,000 square foot lease with MBC BioLabs. See “Kilroy Oyster Point Phase 2” section below for additional details
    • Leasing activity during the quarter included 129,000 square feet of short-term leasing, primarily comprised of 119,000 square feet of short-term renewal leasing
• GAAP rents on leases signed during the quarter increased 5.0% and cash rents decreased 9.6% from prior levels on Second Generation leasing, excluding short-term leasing
• Subsequent to quarter end, signed a 16,000 square foot lease at KOP 2 with Acadia Pharmaceuticals (“Acadia”). See “Kilroy Oyster Point Phase 2” section below for additional details

Kilroy Oyster Point Phase 2

• As highlighted above, signed 68,000 square feet during the third quarter and an additional 16,000 square feet subsequent to quarter end, for a total of 84,000 square feet of leases signed at KOP 2 to date, positioning the Company to likely exceed its previously communicated goal of 100,000 square feet of lease executions by year-end
  • As noted in the Company’s September press release, signed a lease with Color for its new headquarters as part of the Company’s spec suite initiative. Color is expected to commence occupancy early in the second quarter of 2026
  • MBC BioLabs, the Bay Area’s leading life science incubator that has helped launch more than 500 companies collectively raising over $20 billion in capital, is expected to commence occupancy in the fourth quarter of 2026
  • Acadia Pharmaceuticals, a biopharmaceutical company committed to advancing therapies for underserved neurological disorders and rare diseases and an existing tenant in the Company’s San Diego portfolio, is expected to commence occupancy early in the second quarter of 2026

Acquisition & Disposition Activity

• In September, completed the acquisition of Maple Plaza, an approximately 306,000 square foot office property in the Beverly Hills submarket of Los Angeles, for $205.3 million. The building is 72.3% occupied and 79.3% leased to a diverse mix of tenants across private equity, professional services, education, and entertainment
• In September, completed the sale of a four-building, approximately 663,000 square foot campus in Silicon Valley for gross sales proceeds of $365.0 million

Redevelopment

• Added 4690 Executive Drive, an approximately 52,000 square foot redevelopment project in the University Towne Center submarket of San Diego, to the stabilized portfolio. The property is 47% leased
• Added 4400 Bohannon Drive, an approximately 48,000 square foot redevelopment project in the Other Peninsula submarket of the San Francisco Bay Area, to the stabilized portfolio. The property is 0% leased

Balance Sheet

• In August, completed a public offering of $400.0 million of 5.875% 10-year unsecured senior notes due October 2035
• In September, fully redeemed $400.0 million of 4.375% unsecured senior notes due October 2025

Dividend

• The Board declared and paid a regular quarterly cash dividend on its common stock of $0.54 per share, equivalent to an annual rate of $2.16 per share. The dividend was paid on October 8, 2025 to stockholders of record on September 30, 2025 (the ex-dividend date)

Net Income Available to Common Stockholders / FFO Guidance

The Company is updating Nareit-defined FFO per share guidance for the full year 2025 to a range of $4.18 to $4.24 per diluted share, from the previous range of $4.05 to $4.15 per diluted share.

The Company’s guidance estimates for the full year 2025, and the reconciliation of Net income available to common stockholders per share - diluted and FFO per share and unit - diluted included within this press release, reflect management’s views on current and future market conditions, including assumptions with respect to rental rates, occupancy levels, and the earnings impact of the events referenced in this press release. These guidance estimates do not include the impact on the Company’s operating results from potential future acquisitions, dispositions (including any associated gains or losses), capital markets activity, impairment charges, or any events outside of the Company’s control, as the timing and magnitude of any such events are not known at the time the Company provides guidance. There can be no assurance that the Company’s actual results will not differ materially from these estimates.

Conference Call and Audio Webcast

The Company’s management will discuss third quarter results and the current business environment during the Company’s October 28, 2025 earnings conference call. The call will begin at 10:00 a.m. Pacific Time and last approximately one hour. To participate and obtain conference call dial-in details, register by using the following link, https://www.netroadshow.com/events/login/LE9zwo3gD9WhaXuZj8Z0xIiTZIzFwtAfoGM. Those interested in listening via the Internet can access the conference call at https://events.q4inc.com/attendee/894416249. It may be necessary to download audio software to hear the conference call.

About Kilroy Realty Corporation

Kilroy is a leading U.S. landlord and developer, with operations in the San Francisco Bay Area, Los Angeles, Seattle, San Diego, and Austin. The Company has earned global recognition for sustainability, building operations, innovation, and design. As a pioneer and innovator in the creation of a more sustainable real estate industry, the Company’s approach to modern business environments helps drive creativity and productivity for some of the world’s leading technology, entertainment, life science, and business services companies.

The Company 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, life science, and mixed-use projects.

As of September 30, 2025, Kilroy’s stabilized portfolio totaled approximately 16.8 million square feet of primarily office and life science space that was 81.0% occupied and 83.3% leased. The Company also had approximately 1,000 residential units in Hollywood and San Diego, which had a quarterly average occupancy of 93.2%. In addition, the Company had one development project in the tenant improvement phase totaling approximately 872,000 square feet with a total estimated investment of $1.0 billion.

A Leader in Sustainability and Commitment to Corporate Social Responsibility

Kilroy has a longstanding commitment to sustainability and continues to be a recognized leader in our sector. For over a decade, the Company and its sustainability initiatives have been recognized with numerous honors, including earning the GRESB five star rating and being named a sector and regional leader in the Americas. Other honors have included the Nareit Leader in the Light Award, being listed on the Dow Jones Sustainability World Index, being named ENERGY STAR Partner of the Year, and receiving the ENERGY STAR highest honor of Sustained Excellence.

Kilroy is proud to have achieved carbon neutral operations across our portfolio since 2020. The Company also has a longstanding commitment to maintain high levels of LEED, Fitwell, and ENERGY STAR certifications across the portfolio.

Kilroy is committed to cultivating a company culture that makes a positive difference in our employees’ lives by focusing on development, celebrating our unique backgrounds, promoting employee health and wellness, and dedicating ourselves to being a responsible corporate citizen through our community service and philanthropic efforts.

More information is available at http://www.kilroyrealty.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are based on our current expectations, beliefs, and assumptions, and are not guarantees of future performance. Forward-looking statements are inherently subject to uncertainties, risks, changes in circumstances, trends, and factors that are difficult to predict, many of which are outside of our control. Accordingly, actual performance, results, and events may vary materially from those indicated or implied in the forward-looking statements, and you should not rely on the forward-looking statements as predictions of future performance, results, or events. Numerous factors could cause actual future performance, results, and events to differ materially from those indicated in the forward-looking statements, including, among others: global market and general economic conditions, including actual and potential tariffs and periods of heightened inflation, and their effect on our liquidity and financial conditions and those of our tenants; adverse economic or real estate conditions generally, and specifically, in the States of California, Texas, and Washington; risks associated with our investment in real estate assets, which are illiquid, and with trends in the real estate industry; defaults on or non-renewal of leases by tenants; any significant downturn in tenants’ businesses, including bankruptcy, lack of liquidity or lack of funding, and the impact labor disruptions or strikes, such as episodic strikes in the entertainment industry, may have on our tenants’ businesses; our ability to re-lease property at or above current market rates; reduced demand for office space, including as a result of remote working and flexible working arrangements that allow work from remote locations other than an employer's office premises; costs to comply with government regulations, including environmental remediation; the availability of cash for distribution and debt service, and exposure to risk of default under debt obligations; increases in interest rates and our ability to manage interest rate exposure; changes in interest rates and the availability of financing on attractive terms or at all, which may adversely impact our future interest expense and our ability to pursue development, redevelopment, and acquisition opportunities and refinance existing debt; a decline in real estate asset valuations, which may limit our ability to dispose of assets at attractive prices, or obtain or maintain debt financing, and which may result in write-offs or impairment charges; significant competition, which may decrease the occupancy and rental rates of properties; potential losses that may not be covered by insurance; the ability to successfully complete acquisitions and dispositions on announced terms; the ability to successfully operate acquired, developed, and redeveloped properties; the ability to successfully complete development and redevelopment projects on schedule and within budgeted amounts; delays or refusals in obtaining all necessary zoning, land use, and other required entitlements, governmental permits and authorizations for our development and redevelopment properties; increases in anticipated capital expenditures, tenant improvement, and/or leasing costs; defaults on leases for land on which some of our properties are located; adverse changes to, or enactment or implementations of, tax laws or other applicable laws, regulations, or legislation, as well as business and consumer reactions to such changes; risks associated with joint venture investments, including our lack of sole decision-making authority, our reliance on co-venturers’ financial condition, and disputes between us and our co-venturers; environmental uncertainties and risks related to natural disasters; risks associated with climate change and our sustainability strategies, and our ability to achieve our sustainability goals; and our ability to maintain our status as a REIT. These factors are not exhaustive and additional factors could adversely affect our business and financial performance. For a discussion of additional factors that could materially adversely affect our business and financial performance, see the factors included under the caption “Risk Factors” in our annual report on Form 10-K for the year ended December 31, 2024, and our other filings with the Securities and Exchange Commission. All forward-looking statements are based on currently available information and speak only as of the dates on which they are made. We assume no obligation to update any forward-looking statement made in this press release 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.