Kilroy Realty Corporation Reports Fourth Quarter and Full Year Financial Results
Key Terms
funds from operations financial
gaap financial
net operating income financial
capitalized interest financial
“Our strong performance in the fourth quarter capped off an exceptional year of execution by the entire Kilroy Team,” said Angela Aman, Chief Executive Officer. “We captured growing tenant demand for high quality, well-amenitized office and life science projects across virtually all of our submarkets, made substantial progress on leasing our in-process redevelopment and development projects, and capitalized on a resurgence of institutional investor interest in West Coast commercial real estate assets in order to refine and enhance our portfolio. As we look ahead to 2026, we are encouraged by the continued momentum we are experiencing across our platform and believe we are well positioned for continued growth and evolution.”
Fourth Quarter Highlights
Financial Results
-
Revenues of
$272.2 million $286.4 million -
Net income available to common stockholders of
$12.4 million $0.10 $59.5 million $0.50 -
Funds from operations (“FFO”) of
$117.2 million $0.97 $144.9 million $1.20
Leasing and Occupancy
-
Stabilized Portfolio was
81.6% occupied and83.8% leased at December 31, 2025, representing 220 basis points of leases signed that have not commenced -
During the quarter, signed approximately 827,000 square feet of leases, the Company’s strongest fourth-quarter leasing performance in six years
-
Leasing activity was comprised of 547,000 square feet of new leasing on previously vacant space, 148,000 square feet of new leasing on currently occupied space, and 132,000 square feet of renewal leasing
- At Kilroy Oyster Point Phase 2 (“KOP 2”), signed 316,000 square feet of new leases. See “Kilroy Oyster Point Phase 2” section below for additional details
- Leasing activity during the quarter included 60,000 square feet of short-term leasing
-
Leasing activity was comprised of 547,000 square feet of new leasing on previously vacant space, 148,000 square feet of new leasing on currently occupied space, and 132,000 square feet of renewal leasing
-
GAAP and cash rents on leases signed during the quarter decreased
16.8% and27.1% , respectively, from prior levels on Second Generation leasing, excluding short-term leasing-
Leasing spreads during the quarter were negatively impacted by:
- A new lease signed on a space recently vacated due to a tenant bankruptcy
- A renewal signed to preserve near-term income on a single-tenant building while the Company evaluates alternative uses
-
Excluding these two leases, GAAP and cash rents on leases signed during the quarter would have increased
16.2% and decreased2.6% , respectively
-
Leasing spreads during the quarter were negatively impacted by:
Capital Recycling Activity
-
Dispositions / Held for Sale / Assets Under Contract:
-
In December, completed the sale of Sunset Media Center, an approximately 326,000-square-foot office property in the
Hollywood submarket ofLos Angeles , for gross sales proceeds of$61.0 million -
In December, entered into an agreement, subject to a non-refundable deposit, to sell Kilroy Sabre Springs, a three-building campus in the I-15 Corridor submarket of
San Diego , and classified the campus as Held for Sale. The campus totals approximately 428,000 square feet, and the sale closed in January for gross sales proceeds of$124.5 million -
In December, entered into an agreement to sell the remaining portion of the land at Santa Fe Summit for
$86.0 million
-
In December, completed the sale of Sunset Media Center, an approximately 326,000-square-foot office property in the
-
Acquisitions:
-
In December, completed the acquisition of the Nautilus Campus, a four-building, approximately 232,000-square-foot life science campus, in the
Torrey Pines submarket ofSan Diego , for$192.0 million
-
In December, completed the acquisition of the Nautilus Campus, a four-building, approximately 232,000-square-foot life science campus, in the
Dividend
-
The Board declared and paid a regular quarterly cash dividend on its common stock of
$0.54 $2.16
Full Year Highlights
Financial Results
-
Revenues of
$1,112.7 million $1,135.6 million -
Net income available to common stockholders of
$276.1 million $2.32 $211.0 million $1.77 -
Funds from operations (“FFO”) of
$505.9 million $4.20 $551.6 million $4.59
Leasing and Occupancy
-
During the year, signed approximately 2,051,000 square feet of leases, the Company’s highest annual leasing volume since 2019
-
Leasing activity was comprised of 1,108,000 square feet of new leasing on previously vacant space, 233,000 square feet of new leasing on currently occupied space, and 710,000 square feet of renewal leasing
- Leasing activity during the year included 270,000 square feet of short-term leasing, primarily comprised of 187,000 square feet of short-term renewal leasing
-
Leasing activity was comprised of 1,108,000 square feet of new leasing on previously vacant space, 233,000 square feet of new leasing on currently occupied space, and 710,000 square feet of renewal leasing
-
GAAP and cash rents on leases signed during the year decreased
9.3% and18.4% , respectively, from prior levels on Second Generation leasing, excluding short-term leasing
Kilroy Oyster Point Phase 2
-
As highlighted above, signed approximately 316,000 square feet of leases during the fourth quarter for a total of 384,000 square feet of leases signed at KOP 2 during the year, exceeding the Company’s previously communicated goal of 100,000 square feet of lease executions. The project is now
3% occupied and44% leased-
Leasing activity at KOP 2 during the fourth quarter was comprised of the following transactions:
-
The University of
California ,San Francisco executed a full-building lease spanning approximately 280,000 square feet and is expected to commence occupancy in the fourth quarter of 2027 - A new genomic sequencing foundry signed an approximately 20,000-square-foot lease in a space designed and built as part of the Company’s spec suite initiative. The company commenced occupancy upon lease execution in the fourth quarter of 2025
- Acadia Pharmaceuticals executed an approximately 16,000-square-foot lease and is expected to commence occupancy at KOP 2 in the second quarter of 2026
-
The University of
-
Leasing activity at KOP 2 during the fourth quarter was comprised of the following transactions:
Development / Redevelopment
- During the first quarter of 2025, received a temporary certificate of occupancy and progressed KOP 2 from the under construction phase to the tenant improvement phase
-
During the third quarter of 2025, 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 is47% leased -
During the third quarter of 2025, 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 is0% leased
Capital Recycling Activity
-
In addition to the capital recycling activities highlighted above, the following transactions occurred during the year:
-
Dispositions / Assets Under Contract:
-
In April, entered into an agreement, subject to a non-refundable deposit, to sell a portion of the land at Santa Fe Summit for
$38.0 million -
In June, completed the sale of 501 Santa Monica Boulevard, an approximately 79,000-square-foot operating property in
West Los Angeles for gross sales proceeds of$40.0 million -
In July, entered into an agreement, subject to a non-refundable deposit, for the sale of 1633 26th Street for
$41.0 million -
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
-
In April, entered into an agreement, subject to a non-refundable deposit, to sell a portion of the land at Santa Fe Summit for
-
Acquisitions:
-
In September, completed the acquisition of Maple Plaza, an approximately 306,000-square-foot office property in the
Beverly Hills submarket ofLos Angeles , for$205.3 million
-
In September, completed the acquisition of Maple Plaza, an approximately 306,000-square-foot office property in the
-
Dispositions / Assets Under Contract:
Balance Sheet / Liquidity
-
In August, completed a public offering of
$400.0 million 5.875% unsecured senior notes due October 2035 -
In September, fully redeemed
$400.0 million 4.375% unsecured senior notes due October 2025 -
As of December 31, 2025, the Company had approximately
$1.3 billion $0.2 billion $1.1 billion
Sustainability and Corporate Social Responsibility Highlights
- Achieved carbon neutral operations across the portfolio for the sixth consecutive year
- Over six megawatts of installed onsite solar capacity generating clean electricity
-
Listed on
U.S. EPA’s National Top 100 list of largest green power users - Earned GRESB 5-Star Designation for Standing Assets
-
Earned GRESB Regional Sector Leader in the
Americas in Technology/Life Science for Development - Achieved the most ENERGY STAR NextGen certifications of any building owner since the launch of the new certification program in 2024
- Achieved over 1.6 million square feet of new ENERGY STAR certifications across the portfolio, bringing the total to over 10.9 million square feet of ENERGY STAR certified space
- Became a Fitwel Champion+ company
- Maintained Green Lease Leader Gold status
Recent Developments
- In January, added KOP 2 to the stabilized portfolio
- In January, completed the sale of Kilroy Sabre Springs
Net Income Available to Common Stockholders / FFO Guidance
The Company is initiating Nareit-defined FFO per share guidance for 2026 of
|
Key Assumptions |
|
2026 Assumptions |
|
Average full year occupancy |
|
|
|
Average full year occupancy excluding KOP 2 |
|
|
|
Same Property Cash Net Operating Income (“NOI”) growth (1) |
|
( |
|
NOI from Development Properties (2) |
|
( |
|
Non-Cash GAAP NOI adjustments (1) (3) |
|
|
|
GAAP lease termination fee income |
|
|
|
General and administrative and Leasing costs |
|
|
|
Interest income |
|
|
|
Gross interest expense |
|
|
|
Capitalized interest (4) |
|
|
|
Total development spending (5) |
|
|
|
Dispositions |
|
+/- |
|
|
|
Full Year 2026 Range |
|
||||||
|
|
|
Low End |
|
High End |
|
||||
|
|
$ and shares/units in thousands,
|
|
|||||||
|
Net income available to common stockholders per share - diluted |
|
$ |
0.59 |
|
|
$ |
0.79 |
|
|
|
|
|
|
|
|
|
||||
|
Weighted average common shares outstanding - diluted (6) |
|
|
120,100 |
|
|
|
120,100 |
|
|
|
|
|
|
|
|
|
||||
|
Net income available to common stockholders |
|
$ |
70,800 |
|
|
$ |
95,040 |
|
|
|
Adjustments: |
|
|
|
|
|
||||
|
Net income attributable to noncontrolling common units of the Operating Partnership |
|
|
300 |
|
|
|
300 |
|
|
|
Net income attributable to noncontrolling interests in consolidated property partnerships |
|
|
17,000 |
|
|
|
17,000 |
|
|
|
Depreciation and amortization of real estate assets |
|
|
342,000 |
|
|
|
342,000 |
|
|
|
Gain on sale of depreciable operating property |
|
|
(8,200 |
) |
|
|
(8,200 |
) |
|
|
Funds From Operations attributable to noncontrolling interests in consolidated property partnerships |
|
|
(28,000 |
) |
|
|
(28,000 |
) |
|
|
Funds From Operations (1) |
|
$ |
393,900 |
|
|
$ |
418,140 |
|
|
|
|
|
|
|
|
|
||||
|
Weighted average common shares/units outstanding – diluted (7) |
|
|
121,200 |
|
|
|
121,200 |
|
|
|
|
|
|
|
|
|
||||
|
Nareit Funds From Operations per common share/unit – diluted (1) |
|
$ |
3.25 |
|
|
$ |
3.45 |
|
|
| ____________________ | ||
(1) |
For additional information, please refer to pages 35-37 “Non-GAAP Supplemental Measures” of the Company’s Supplemental Financial Report furnished on Form 8-K for management statements on the Company’s non-GAAP measures. |
|
(2) |
NOI from Development Properties is primarily comprised of carry costs associated with Company’s KOP 2 and Flower Mart projects. Guidance assumes the continued capitalization of the Company’s Flower Mart project through June 2026. |
|
(3) |
Non-Cash GAAP NOI adjustments include the following items: Amortization of deferred revenue related to tenant-funded tenant improvements, Straight-line rents, net, Amortization of net below market rents, and Lease related adjustments and other. |
|
(4) |
Capitalized interest guidance assumes the continued capitalization of the Company’s Flower Mart project through June 2026. |
|
(5) |
Total development spending includes recently stabilized, in-process, and future development projects. |
|
(6) |
Calculated based on estimated weighted average shares outstanding, including non-participating share-based awards and the dilutive impact of contingently issuable shares. |
|
(7) |
Calculated based on the weighted average shares outstanding, including participating and non-participating share-based awards, and the dilutive impact of contingently issuable shares, and assuming the exchange of all common limited partnership units outstanding. Reported amounts are attributable to common stockholders, common unitholders, and restricted stock unitholders. |
|
The Company’s guidance estimates for the full year 2026, 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 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 fourth quarter results and the current business environment during the Company’s February 10, 2026 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/LE9zwo4AF0rVUaxBU0IDSIu6q6M8vLBYYMS. Those interested in listening via the Internet can access the conference call at https://events.q4inc.com/attendee/267439370. It may be necessary to download audio software to hear the conference call.
About Kilroy Realty Corporation
Kilroy is a leading
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 December 31, 2025, Kilroy’s stabilized portfolio totaled approximately 16.3 million square feet of primarily office and life science space that was
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
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 us and our tenants; adverse economic or real estate conditions generally, and specifically, in the States of
KILROY REALTY CORPORATION SUMMARY OF QUARTERLY RESULTS (unaudited; in thousands, except per share data) |
|||||||||||||
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|
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|
||||||||||
|
Three Months Ended December 31, |
|
Year Ended December 31, |
||||||||||
|
2025 |
|
2024 |
|
2025 |
|
2024 |
||||||
Revenues |
$ |
272,187 |
|
$ |
286,379 |
|
$ |
1,112,667 |
|
|
$ |
1,135,629 |
|
|
|
|
|
|
|
|
|
||||||
Net income available to common stockholders |
$ |
12,444 |
|
$ |
59,460 |
|
$ |
276,121 |
|
|
$ |
210,969 |
|
|
|
|
|
|
|
|
|
||||||
Weighted average common shares outstanding – basic |
|
118,338 |
|
|
118,047 |
|
|
118,279 |
|
|
|
117,649 |
|
Weighted average common shares outstanding – diluted |
|
119,153 |
|
|
118,759 |
|
|
118,832 |
|
|
|
118,157 |
|
|
|
|
|
|
|
|
|
||||||
Net income available to common stockholders per share – basic |
$ |
0.10 |
|
$ |
0.50 |
|
$ |
2.33 |
|
|
$ |
1.78 |
|
Net income available to common stockholders per share – diluted |
$ |
0.10 |
|
$ |
0.50 |
|
$ |
2.32 |
|
|
$ |
1.77 |
|
|
|
|
|
|
|
|
|
||||||
Funds From Operations (1)(2) |
$ |
117,158 |
|
$ |
144,875 |
|
$ |
505,920 |
|
|
$ |
551,633 |
|
|
|
|
|
|
|
|
|
||||||
Weighted average common shares/units outstanding – basic (3) |
|
119,869 |
|
|
119,521 |
|
|
119,835 |
|
|
|
119,729 |
|
Weighted average common shares/units outstanding – diluted (4) |
|
120,684 |
|
|
120,234 |
|
|
120,388 |
|
|
|
120,236 |
|
|
|
|
|
|
|
|
|
||||||
Funds From Operations per common share/unit – basic (2) |
$ |
0.98 |
|
$ |
1.21 |
|
$ |
4.22 |
|
|
$ |
4.61 |
|
Funds From Operations per common share/unit – diluted (2) |
$ |
0.97 |
|
$ |
1.20 |
|
$ |
4.20 |
|
|
$ |
4.59 |
|
|
|
|
|
|
|
|
|
||||||
Common shares outstanding at end of period |
|
|
|
|
|
118,372 |
|
|
|
118,047 |
|
||
Common partnership units outstanding at end of period |
|
|
|
|
|
1,134 |
|
|
|
1,151 |
|
||
Total common shares and units outstanding at end of period |
|
|
|
|
|
119,506 |
|
|
|
119,198 |
|
||
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
December 31, 2025 |
|
December 31, 2024 |
||||||
Stabilized office portfolio occupancy rates: (5) |
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
75.1 |
% |
|
|
75.0 |
% |
||
|
|
|
|
|
|
83.7 |
% |
|
|
89.2 |
% |
||
|
|
|
|
|
|
86.2 |
% |
|
|
87.4 |
% |
||
|
|
|
|
|
|
80.0 |
% |
|
|
80.5 |
% |
||
|
|
|
|
|
|
82.2 |
% |
|
|
74.7 |
% |
||
Weighted average total |
|
|
|
|
|
81.6 |
% |
|
|
82.8 |
% |
||
|
|
|
|
|
|
|
|
||||||
Total square feet of stabilized office properties owned at end of period: (5) |
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
4,242 |
|
|
|
4,340 |
|
||
|
|
|
|
|
|
2,728 |
|
|
|
2,877 |
|
||
|
|
|
|
|
|
5,565 |
|
|
|
6,171 |
|
||
|
|
|
|
|
|
2,998 |
|
|
|
2,996 |
|
||
|
|
|
|
|
|
759 |
|
|
|
759 |
|
||
Total |
|
|
|
|
|
16,292 |
|
|
|
17,143 |
|
||
| ____________________ | |||
(1) |
Reconciliation of Net income available to common stockholders to Funds From Operations available to common stockholders and unitholders and management statement on Funds From Operations are included after the Consolidated Statements of Operations. |
||
(2) |
Reported amounts are attributable to common stockholders, common unitholders and restricted stock unitholders. |
||
(3) |
Calculated based on weighted average shares outstanding, including participating share-based awards (i.e., nonvested stock and certain time-based restricted stock units) and assuming the exchange of all common limited partnership units outstanding. |
||
(4) |
Calculated based on weighted average shares outstanding, including participating and non-participating share-based awards, dilutive impact of contingently issuable shares, and assuming the exchange of all common limited partnership units outstanding. |
||
(5) |
Occupancy percentages and total square feet reported are based on the Company’s stabilized office portfolio for the periods presented. |
||
KILROY REALTY CORPORATION CONSOLIDATED BALANCE SHEETS (unaudited; in thousands) |
|||||||
|
December 31, 2025 |
|
December 31, 2024 |
||||
ASSETS |
|
|
|
||||
Real Estate Assets |
|
|
|
||||
Land |
$ |
1,641,913 |
|
|
$ |
1,750,820 |
|
Buildings and improvements |
|
8,505,486 |
|
|
|
8,598,751 |
|
Undeveloped land and construction in progress |
|
2,387,742 |
|
|
|
2,309,624 |
|
Total real estate assets held for investment |
|
12,535,141 |
|
|
|
12,659,195 |
|
Accumulated depreciation and amortization |
|
(2,843,811 |
) |
|
|
(2,824,616 |
) |
Total real estate assets held for investment, net |
|
9,691,330 |
|
|
|
9,834,579 |
|
Real estate and other assets held for sale, net |
|
115,155 |
|
|
|
— |
|
Cash and cash equivalents |
|
179,316 |
|
|
|
165,690 |
|
Marketable securities |
|
30,807 |
|
|
|
27,965 |
|
Current receivables, net |
|
12,765 |
|
|
|
11,033 |
|
Deferred rent receivables, net |
|
424,794 |
|
|
|
451,996 |
|
Deferred leasing costs and acquisition-related intangible assets, net |
|
278,232 |
|
|
|
225,937 |
|
Right of use ground lease assets, net |
|
128,116 |
|
|
|
129,222 |
|
Prepaid expenses and other assets, net |
|
54,561 |
|
|
|
51,935 |
|
TOTAL ASSETS |
$ |
10,915,076 |
|
|
$ |
10,898,357 |
|
|
|
|
|
||||
LIABILITIES AND EQUITY |
|
|
|
||||
Liabilities: |
|
|
|
||||
Secured debt, net |
$ |
592,685 |
|
|
$ |
598,199 |
|
Unsecured debt, net |
|
3,996,774 |
|
|
|
3,999,566 |
|
Accounts payable, accrued expenses, and other liabilities |
|
288,963 |
|
|
|
285,011 |
|
Ground lease liabilities |
|
127,628 |
|
|
|
128,422 |
|
Accrued dividends and distributions |
|
65,009 |
|
|
|
64,850 |
|
Deferred revenue and acquisition-related intangible liabilities, net |
|
125,628 |
|
|
|
142,437 |
|
Rents received in advance and tenant security deposits |
|
75,701 |
|
|
|
71,003 |
|
Liabilities related to real estate assets held for sale |
|
4,945 |
|
|
|
— |
|
Total liabilities |
|
5,277,333 |
|
|
|
5,289,488 |
|
Equity: |
|
|
|
||||
Stockholders’ Equity |
|
|
|
||||
Common stock |
|
1,184 |
|
|
|
1,181 |
|
Additional paid-in capital |
|
5,230,747 |
|
|
|
5,209,653 |
|
Retained earnings |
|
188,876 |
|
|
|
171,212 |
|
Total stockholders’ equity |
|
5,420,807 |
|
|
|
5,382,046 |
|
Noncontrolling Interests |
|
|
|
||||
Common units of the Operating Partnership |
|
51,911 |
|
|
|
52,472 |
|
Consolidated property partnerships |
|
165,025 |
|
|
|
174,351 |
|
Total noncontrolling interests |
|
216,936 |
|
|
|
226,823 |
|
Total equity |
|
5,637,743 |
|
|
|
5,608,869 |
|
TOTAL LIABILITIES AND EQUITY |
$ |
10,915,076 |
|
|
$ |
10,898,357 |
|
KILROY REALTY CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited; in thousands, except per share data) |
|||||||||||||||
|
|
|
|
||||||||||||
|
Three Months Ended December 31, |
|
Year Ended December 31, |
||||||||||||
|
|
2025 |
|
|
|
2024 |
|
|
|
2025 |
|
|
|
2024 |
|
Revenues |
|
|
|
|
|
|
|
||||||||
Rental income |
$ |
267,363 |
|
|
$ |
281,355 |
|
|
$ |
1,093,587 |
|
|
$ |
1,118,115 |
|
Other property income |
|
4,824 |
|
|
|
5,024 |
|
|
|
19,080 |
|
|
|
17,514 |
|
Total revenues |
|
272,187 |
|
|
|
286,379 |
|
|
|
1,112,667 |
|
|
|
1,135,629 |
|
|
|
|
|
|
|
|
|
||||||||
Expenses |
|
|
|
|
|
|
|
||||||||
Property expenses |
|
64,673 |
|
|
|
63,249 |
|
|
|
243,726 |
|
|
|
243,441 |
|
Real estate taxes |
|
26,556 |
|
|
|
24,026 |
|
|
|
107,564 |
|
|
|
108,951 |
|
Ground leases |
|
2,991 |
|
|
|
2,990 |
|
|
|
12,048 |
|
|
|
11,715 |
|
General and administrative expenses |
|
19,485 |
|
|
|
16,977 |
|
|
|
73,108 |
|
|
|
71,074 |
|
Leasing costs |
|
2,592 |
|
|
|
2,013 |
|
|
|
10,352 |
|
|
|
8,764 |
|
Depreciation and amortization |
|
92,623 |
|
|
|
89,121 |
|
|
|
354,854 |
|
|
|
356,182 |
|
Total expenses |
|
208,920 |
|
|
|
198,376 |
|
|
|
801,652 |
|
|
|
800,127 |
|
|
|
|
|
|
|
|
|
||||||||
Other Income (Expenses) |
|
|
|
|
|
|
|
||||||||
Interest income |
|
2,205 |
|
|
|
4,790 |
|
|
|
6,970 |
|
|
|
37,752 |
|
Interest expense |
|
(32,148 |
) |
|
|
(33,245 |
) |
|
|
(126,292 |
) |
|
|
(145,287 |
) |
Other income (expense) (1) |
|
44 |
|
|
|
(493 |
) |
|
|
168 |
|
|
|
(992 |
) |
Gains on sales of depreciable operating properties |
|
— |
|
|
|
— |
|
|
|
127,038 |
|
|
|
— |
|
Impairment of real estate assets |
|
(16,259 |
) |
|
|
— |
|
|
|
(16,259 |
) |
|
|
— |
|
Gain on sale of long-lived assets |
|
— |
|
|
|
5,979 |
|
|
|
— |
|
|
|
5,979 |
|
Total other expenses |
|
(46,158 |
) |
|
|
(22,969 |
) |
|
|
(8,375 |
) |
|
|
(102,548 |
) |
|
|
|
|
|
|
|
|
||||||||
Net income |
|
17,109 |
|
|
|
65,034 |
|
|
|
302,640 |
|
|
|
232,954 |
|
|
|
|
|
|
|
|
|
||||||||
Net income attributable to noncontrolling common units of the Operating Partnership |
|
(120 |
) |
|
|
(593 |
) |
|
|
(2,682 |
) |
|
|
(2,062 |
) |
Net income attributable to noncontrolling interests in consolidated property partnerships |
|
(4,545 |
) |
|
|
(4,981 |
) |
|
|
(23,837 |
) |
|
|
(19,923 |
) |
Total net income attributable to noncontrolling interests |
|
(4,665 |
) |
|
|
(5,574 |
) |
|
|
(26,519 |
) |
|
|
(21,985 |
) |
|
|
|
|
|
|
|
|
||||||||
Net income available to common stockholders |
$ |
12,444 |
|
|
$ |
59,460 |
|
|
$ |
276,121 |
|
|
$ |
210,969 |
|
|
|
|
|
|
|
|
|
||||||||
Weighted average shares of common stock outstanding – basic |
|
118,338 |
|
|
|
118,047 |
|
|
|
118,279 |
|
|
|
117,649 |
|
Weighted average shares of common stock outstanding – diluted |
|
119,153 |
|
|
|
118,759 |
|
|
|
118,832 |
|
|
|
118,157 |
|
|
|
|
|
|
|
|
|
||||||||
Net income available to common stockholders per share – basic |
$ |
0.10 |
|
|
$ |
0.50 |
|
|
$ |
2.33 |
|
|
$ |
1.78 |
|
Net income available to common stockholders per share – diluted |
$ |
0.10 |
|
|
$ |
0.50 |
|
|
$ |
2.32 |
|
|
$ |
1.77 |
|
| ____________________ | ||
(1) |
Commencing January 1, 2025, the Company began presenting a new line item, Other income (expense), which includes tax expenses, acquisition and disposition expenses, and income or expenses related to environmental and sustainability initiatives, all of which were previously included in General and administrative expenses. Historical amounts for General and administrative expenses and Other income (expense) have been revised to conform with the current period presentation. |
|
KILROY REALTY CORPORATION FUNDS FROM OPERATIONS (unaudited; in thousands, except per share data) |
|||||||||||||||
|
|
|
|
||||||||||||
|
Three Months Ended December 31, |
|
Year Ended December 31, |
||||||||||||
|
|
2025 |
|
|
|
2024 |
|
|
|
2025 |
|
|
|
2024 |
|
Net income available to common stockholders |
$ |
12,444 |
|
|
$ |
59,460 |
|
|
$ |
276,121 |
|
|
$ |
210,969 |
|
Adjustments: |
|
|
|
|
|
|
|
||||||||
Net income attributable to noncontrolling common units of the Operating Partnership |
|
120 |
|
|
|
593 |
|
|
|
2,682 |
|
|
|
2,062 |
|
Net income attributable to noncontrolling interests in consolidated property partnerships |
|
4,545 |
|
|
|
4,981 |
|
|
|
23,837 |
|
|
|
19,923 |
|
Depreciation and amortization of real estate assets |
|
91,213 |
|
|
|
87,536 |
|
|
|
349,271 |
|
|
|
349,828 |
|
Gains on sales of depreciable operating properties |
|
— |
|
|
|
— |
|
|
|
(127,038 |
) |
|
|
— |
|
Impairment of real estate assets |
|
16,259 |
|
|
|
— |
|
|
|
16,259 |
|
|
|
— |
|
Funds From Operations attributable to noncontrolling interests in consolidated property partnerships |
|
(7,423 |
) |
|
|
(7,695 |
) |
|
|
(35,212 |
) |
|
|
(31,149 |
) |
Funds From Operations (1)(2)(3) |
$ |
117,158 |
|
|
$ |
144,875 |
|
|
$ |
505,920 |
|
|
$ |
551,633 |
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares/units outstanding – basic (4) |
|
119,869 |
|
|
|
119,521 |
|
|
|
119,835 |
|
|
|
119,729 |
|
Weighted average common shares/units outstanding – diluted (5) |
|
120,684 |
|
|
|
120,234 |
|
|
|
120,388 |
|
|
|
120,236 |
|
|
|
|
|
|
|
|
|
||||||||
Funds From Operations per common share/unit – basic (2) |
$ |
0.98 |
|
|
$ |
1.21 |
|
|
$ |
4.22 |
|
|
$ |
4.61 |
|
Funds From Operations per common share/unit – diluted (2) |
$ |
0.97 |
|
|
$ |
1.20 |
|
|
$ |
4.20 |
|
|
$ |
4.59 |
|
| ____________________ | ||
(1) |
The Company calculates Funds From Operations available to common stockholders and common unitholders (“FFO”) in accordance with the 2018 Restated White Paper on FFO approved by the Board of Governors of Nareit. The White Paper defines FFO as net income or loss (calculated in accordance with GAAP), excluding depreciation and amortization related to real estate, gains and losses from the sale of certain real estate assets, gains and losses from change in control, and impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity. The reconciling items include amounts to adjust earnings from consolidated partially-owned entities and equity in earnings of unconsolidated affiliates to FFO. Our calculation of FFO includes the amortization of deferred revenue related to tenant-funded tenant improvements and excludes the depreciation of the related tenant improvement assets. We also add back net income attributable to noncontrolling common units of the Operating Partnership because we report FFO attributable to common stockholders and common unitholders. |
|
|
|
|
|
Management believes that FFO is a useful supplemental measure of the Company’s operating performance. The exclusion from FFO of gains and losses from the sale of operating real estate assets allows investors and analysts to readily identify the operating results of the assets that form the core of the Company’s activity and assists in comparing those operating results between periods. Also, because FFO is generally recognized as the industry standard for reporting the operations of REITs, it facilitates comparisons of operating performance to other REITs. However, other REITs may use different methodologies to calculate FFO, and accordingly, the Company’s FFO may not be comparable to all other REITs. |
|
|
|
|
|
Implicit in historical cost accounting for real estate assets in accordance with GAAP is the assumption that the value of real estate assets diminishes predictably over time. Since real estate values have historically risen or fallen with market conditions, many industry investors and analysts have considered presentations of operating results for real estate companies using historical cost accounting alone to be insufficient. Because FFO excludes depreciation and amortization of real estate assets, management believes that FFO along with the required GAAP presentations provides a more complete measurement of the Company’s performance relative to its competitors and a more appropriate basis on which to make decisions involving operating, financing, and investing activities than the required GAAP presentations alone would provide. |
|
|
|
|
|
FFO should not be viewed as an alternative measure of the Company’s operating performance since it does not reflect either depreciation and amortization costs or the level of capital expenditures and leasing costs necessary to maintain the operating performance of the Company’s properties, which are significant economic costs and could materially impact the Company’s results from operations. |
|
(2) |
Reported amounts are attributable to common stockholders, common unitholders, and restricted stock unitholders. |
|
(3) |
FFO available to common stockholders and unitholders includes amortization of deferred revenue related to tenant-funded tenant improvements of |
|
(4) |
Calculated based on weighted average shares outstanding, including participating share-based awards (i.e., certain time-based restricted stock units) and assuming the exchange of all common limited partnership units outstanding. |
|
(5) |
Calculated based on weighted average shares outstanding, including participating and non-participating share-based awards, dilutive impact of contingently issuable shares, and assuming the exchange of all common limited partnership units outstanding. |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20260209538423/en/
Doug Bettisworth
Vice President, Corporate Finance
(310) 481-8585
Source: Kilroy Realty Corporation
