Kilroy Realty reports Q3 FFO of $0.88 per share

Kilroy Realty Corporation (NYSE: KRC) reported third quarter 2026 funds from operations of $104.6 million, or $0.88 per diluted share, on October 22, 2026. The figure represents a decrease from the $1.08 per diluted share reported for the same period in 2025.

The company recorded revenues of $271.6 million for the quarter ended September 30, 2026, compared to $279.7 million in the prior year period. Net income available to common stockholders was $15.5 million, or $0.13 per diluted share, down significantly from $156.2 million, or $1.31 per diluted share, in the third quarter of 2025.

Leasing activity drove occupancy gains across the portfolio. Kilroy signed approximately 815,000 square feet of leases during the quarter, a volume Angela Aman, Chief Executive Officer, described as one of the company's highest since 2019. The stabilized portfolio reached 76.9% occupancy and 83.0% leased at quarter-end. Excluding Kilroy Oyster Point Phase 2, occupancy stood at 80.7% and leased space at 84.8%.

The leasing mix included 345,000 square feet of new space on previously vacant areas, 127,000 square feet of new space on currently occupied areas, and 343,000 square feet of renewals. A notable renewal involved a 12-year lease for approximately 243,000 square feet at Crossing 900 with Box, Inc.

Rent spreads showed positive movement on second-generation leasing. Excluding short-term leases, GAAP rents on signed leases increased by 30.6% and cash rents increased by 9.7% from prior levels. When excluding space vacant for more than twelve months, GAAP rent growth rose to 37.9% and cash rent growth to 13.9%.

The company also updated its full-year 2026 guidance for Nareit-defined funds from operations per diluted share to a range of $3.55 to $3.59. This narrows and slightly raises the previous guidance range of $3.49 to $3.63 provided in July 2026.

Key assumptions for the updated guidance include average full-year occupancy between 77.0% and 77.5%, and same-property cash net operating income growth between 0.75% and 1.0%. The company also expects total development spending of approximately $150 million for the year.

In August, Kilroy entered into an agreement to sell the land at Kilroy East Village in San Diego for gross proceeds of $19.5 million, subject to a non-refundable deposit. The transaction is anticipated to close in the fourth quarter.

The board declared and paid a regular quarterly cash dividend of $0.54 per share on October 14, 2026, equivalent to an annual rate of $2.16 per share.