Kilroy Realty Reports Q4 & Full-Year Results

Kilroy Realty Corporation Reports Fourth Quarter and Full-Year 2025 Financial Results

Kilroy Realty Corporation (NYSE: KRC) (“Kilroy” or the “Company”) today announced its financial results for the fourth quarter and full year ended December 31, 2025.

“Our strong fourth-quarter performance capped off an exceptional year, driven by growing tenant demand for high-quality office and life science projects, substantial leasing progress on redevelopment initiatives, and renewed institutional investor interest in West Coast commercial real estate,” said Angela Aman, CEO. “We are optimistic about continued momentum and growth in 2026.”

Fourth Quarter 2025 Highlights

Financial Performance

  • Revenue: $272.2 million, down from $286.4 million in Q4 2024.
  • Net Income: $12.4 million, or $0.10 per diluted share, compared to $59.5 million, or $0.50 per diluted share, in Q4 2024.
  • Funds from Operations (FFO): $117.2 million, or $0.97 per diluted share, versus $144.9 million, or $1.20 per diluted share, in Q4 2024.

Leasing and Occupancy

  • Stabilized portfolio occupancy: 81.6% occupied, 83.8% leased, with 220 basis points of leases signed but not yet commenced.
  • 827,000 square feet leased, the strongest Q4 performance in six years:
    • 547,000 sq. ft. new leases on vacant space
    • 148,000 sq. ft. new leases on occupied space
    • 132,000 sq. ft. renewals
  • Kilroy Oyster Point Phase 2 (KOP 2): 316,000 sq. ft. leased, including a full-building lease to UCSF.
  • Short-term leases: 60,000 sq. ft.
  • GAAP and cash rents decreased due to two leases (one tenant bankruptcy and one short-term renewal). Excluding these, GAAP rents rose 16.2%, and cash rents fell 2.6%.

Capital Recycling

  • Sales / Held for Sale / Under Contract:
    • Sunset Media Center (Hollywood, LA): sold for $61.0 million.
    • Kilroy Sabre Springs (San Diego): agreement signed; sold in January for $124.5 million.
    • Santa Fe Summit land: 17 acres sold for $86.0 million; pending residential entitlements.
  • Acquisition: Nautilus Campus (Torrey Pines, San Diego), 232,000 sq. ft. life science campus acquired for $192.0 million.

Dividend

  • Quarterly dividend: $0.54 per share (annualized $2.16), paid January 7, 2026, to stockholders of record December 31, 2025.

Full-Year 2025 Highlights

Financial Performance

  • Revenue: $1,112.7 million, slightly below $1,135.6 million in 2024.
  • Net Income: $276.1 million, or $2.32 per diluted share, up from $211.0 million, or $1.77 per diluted share, in 2024.
  • FFO: $505.9 million, or $4.20 per diluted share, compared to $551.6 million, or $4.59 per diluted share, in 2024.

Leasing Activity

  • Total leases signed: 2,051,000 sq. ft., highest annual volume since 2019:
    • 1,108,000 sq. ft. new leases on vacant space
    • 233,000 sq. ft. new leases on occupied space
    • 710,000 sq. ft. renewals
  • Short-term leases: 270,000 sq. ft.
  • GAAP and cash rents decreased 9.3% and 18.4%, respectively, on Second Generation leasing, excluding short-term leases.

Kilroy Oyster Point Phase 2 (KOP 2)

  • Total leased: 384,000 sq. ft., exceeding initial 100,000 sq. ft. target.
  • Notable leases:
    • UCSF full-building lease (~280,000 sq. ft.), occupancy expected Q4 2027
    • Genomic sequencing foundry (~20,000 sq. ft.), immediate occupancy
    • Acadia Pharmaceuticals (~16,000 sq. ft.), occupancy expected Q2 2026
  • Occupancy: 3%, leased: 44%.

Development & Redevelopment

  • KOP 2 transitioned from construction to tenant improvement phase.
  • Added to stabilized portfolio:
    • 4690 Executive Drive, San Diego, 52,000 sq. ft., 47% leased
    • 4400 Bohannon Drive, SF Bay Area, 48,000 sq. ft., 0% leased

Capital Recycling

  • Dispositions / Assets Under Contract:
    • Santa Fe Summit land portion: $38.0 million, expected 2026 close
    • 501 Santa Monica Blvd., LA: $40.0 million
    • 1633 26th Street: $41.0 million, closing pending entitlements
    • Four-building Silicon Valley campus: $365.0 million
  • Acquisition: Maple Plaza, Beverly Hills, 306,000 sq. ft., $205.3 million

Balance Sheet & Liquidity

  • Public offering: $400 million of 5.875% senior notes, due 2035
  • Redeemed $400 million of 4.375% senior notes
  • Total liquidity: ~$1.3 billion, including $0.2 billion cash and $1.1 billion undrawn credit facility

Sustainability & CSR

  • Carbon-neutral operations for sixth consecutive year
  • Over six megawatts of onsite solar capacity
  • Listed on the EPA National Top 100 largest green power users
  • GRESB 5-Star Designation; Regional Sector Leader in Technology/Life Science
  • Over 10.9 million sq. ft. ENERGY STAR certified space
  • Fitwel Champion+ company, Green Lease Leader Gold status
2026 Guidance
  • FFO per share: $3.25 – $3.45
  • Net income per share: $0.59 – $0.79
  • Assumptions include: average occupancy 76–78% (80–81.5% excluding KOP 2), same-property cash NOI growth (−1.5% to 0%), $150–200 million development spending, ~$300 million in dispositions.

SOURCE LINK : https://www.businesswire.com/

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