Kilroy Realty(US:KRC)2025-10-27 20:17Financial Performance - Revenues for Q3 2025 were $279.7 million, down from $289.9 million in Q3 2024, representing a decrease of 3.9% year-over-year[5]. - Net income available to common stockholders was $156.2 million, or $1.31 per diluted share, compared to $52.4 million, or $0.44 per diluted share in Q3 2024, marking a significant increase of 197.7%[5]. - Funds from operations (FFO) for the quarter were $130.6 million, or $1.08 per diluted share, down from $140.4 million, or $1.17 per diluted share in the same quarter last year, a decrease of 7.0%[5]. - Revenues for Q3 2025 were $279,744,000, a decrease of 3.9% from $289,892,000 in Q2 2025[24]. - Net income available to common stockholders for Q3 2025 was $156,220,000, significantly up from $68,449,000 in Q2 2025[24]. - Net Operating Income (NOI) for Q3 2025 was $188,775,000, compared to $190,779,000 in Q2 2025, reflecting a slight decrease[24]. - The company reported a Funds From Operations (FFO) of $130,561,000 for Q3 2025, down from $135,891,000 in Q2 2025[24]. - The company recognized a gain on the sale of depreciable operating properties amounting to $110.484 million in Q3 2025[31]. - The company reported a net income available to common stockholders of $156,220,000 for Q3 2025, compared to $52,378,000 in Q3 2024[48]. - The company reported a net income of $55.988 million for the nine months ended September 30, 2025, compared to $40.761 million for the same period in 2024, indicating a significant year-over-year growth[89]. Occupancy and Leasing - The stabilized portfolio was 81.0% occupied and 83.3% leased as of September 30, 2025, with 230 basis points of leases signed that have not commenced[5]. - Average occupancy for the residential portfolio was 81.0% in Q3 2025, up from 80.8% in Q2 2025[24]. - The period-end occupancy percentage for the stabilized portfolio was 81.0% in Q3 2025, compared to 80.8% in Q2 2025[24]. - The average occupancy rate for the quarter-to-date is 80.7% and year-to-date is 81.0%[57]. - A total of 422,587 square feet of leases were executed in Q3 2025, with a retention rate of 60.2%[70]. - New leases executed in Q3 2025 included 114,336 square feet, while renewals accounted for 196,310 square feet[68]. - The total rentable square footage of the stabilized portfolio is 16,811,767[66]. - The stabilized portfolio occupancy overview indicated a total occupancy of 74.0% in Los Angeles as of September 30, 2025[53]. - The San Francisco Bay Area occupancy rate is 85.7%, up from 84.8% in the previous quarter[64]. - In Seattle, the total occupancy rate increased to 80.6% from 78.5% quarter-over-quarter[66]. Capital Expenditures and Investments - The company completed the acquisition of Maple Plaza for $205.3 million, which is 72.3% occupied and 79.3% leased[9]. - Total capital expenditures for Q3 2025 amounted to $36,959,000, with tenant improvements and leasing commissions contributing $27,430,000[73]. - The major repositioning capital expenditures for Q3 2025 totaled $39,000, primarily for capital improvements[73]. - The company disposed of five operating properties totaling 741,969 rentable square feet for a gross sales price of $405.0 million, including the Silicon Valley Campus with 663,460 square feet sold for $365.0 million[87]. - The company has a stabilized development project at 4400 Bohannon Drive with 48,414 rentable square feet and a total estimated investment of $55 million, expected to stabilize in Q3 2025[95]. - The in-process development project, Kilroy Oyster Point - Phase 2, has an estimated rentable square footage of 871,738 and a total estimated investment of $1,025 million, with an expected stabilization date in Q1 2026[96]. Debt and Financial Ratios - Total debt as of September 30, 2025, is $4,627,026, representing 47.8% of total market capitalization[110]. - The company's total equity and noncontrolling interest in the operating partnership is $5,046,959, accounting for 52.2% of total market capitalization[110]. - The weighted average stated interest rate on total debt is 4.29%[110]. - The total debt to total asset value ratio is 33%, well below the covenant limit of 60%[110]. - The fixed charge coverage ratio stands at 3.2x, exceeding the required minimum of 1.5x[110]. - The net debt to company's share of EBITDAre ratio is 6.4x, indicating a stable leverage position[110]. - The company has a significant unencumbered asset pool value to unsecured debt ratio of 304%, well above the required 150%[110]. - The company’s trailing 12-month share of EBITDAre is $660,337[110]. Dividends and Shareholder Returns - The Board declared a quarterly cash dividend of $0.54 per share, equivalent to an annual rate of $2.16 per share, paid on October 8, 2025[6]. - The company declared dividends of $0.54 per common share for Q3 2025, consistent with the previous quarter[24]. - The Company emphasizes the importance of the FAD payout ratio, calculated as current-quarter dividends divided by FAD[134]. Future Outlook and Risks - Forward-looking statements indicate potential risks including economic conditions, interest rate fluctuations, and competition in the real estate market, which could materially affect future performance[170].