Kilroy Realty Corporation Reports Fourth Quarter and Full Year Financial Results

Core Viewpoint - Kilroy Realty Corporation reported strong performance in Q4 2025, highlighting growth in tenant demand for high-quality office and life science projects, significant leasing activity, and a positive outlook for 2026 [2][6]. Financial Results - Revenues for Q4 2025 were $272.2 million, down from $286.4 million in Q4 2024 [6][31]. - Net income available to common stockholders was $12.4 million, or $0.10 per diluted share, compared to $59.5 million, or $0.50 per diluted share in the previous year [6][31]. - Funds from operations (FFO) were $117.2 million, or $0.97 per diluted share, down from $144.9 million, or $1.20 per diluted share in Q4 2024 [6][31]. - For the full year 2025, revenues totaled $1,112.7 million, a decrease from $1,135.6 million in 2024 [13][31]. - Full year net income available to common stockholders was $276.1 million, or $2.32 per diluted share, compared to $211.0 million, or $1.77 per diluted share in 2024 [13][31]. - Full year FFO was $505.9 million, or $4.20 per diluted share, down from $551.6 million, or $4.59 per diluted share in 2024 [13][31]. Leasing and Occupancy - The stabilized portfolio was 81.6% occupied and 83.8% leased as of December 31, 2025, with 220 basis points of leases signed that have not commenced [6][24]. - In Q4 2025, approximately 827,000 square feet of leases were signed, marking the strongest fourth-quarter leasing performance in six years [6][31]. - Leasing activity included 547,000 square feet of new leasing on previously vacant space, 148,000 square feet on currently occupied space, and 132,000 square feet of renewal leasing [6][31]. - GAAP and cash rents on leases signed during the quarter decreased by 16.8% and 27.1%, respectively, from prior levels on Second Generation leasing [6][31]. Capital Recycling Activity - In December 2025, the company completed the sale of Sunset Media Center for $61.0 million and entered into an agreement to sell Kilroy Sabre Springs for $124.5 million, which closed in January 2026 [6][31]. - The company also agreed to sell a portion of land at Santa Fe Summit for $86.0 million in gross sales proceeds [12][31]. Dividend - The Board declared a quarterly cash dividend of $0.54 per share, equivalent to an annual rate of $2.16 per share, paid on January 7, 2026 [7]. Guidance for 2026 - The company initiated FFO per share guidance for 2026 of $3.25 to $3.45 per diluted share [17][19]. - Key assumptions for 2026 include average full year occupancy of 76.0% to 78.0% and same property cash net operating income growth of -1.50% to 0.00% [19]. Sustainability and Corporate Social Responsibility - Kilroy achieved carbon neutral operations for the sixth consecutive year and has over six megawatts of installed onsite solar capacity [26][27]. - The company has received numerous sustainability accolades, including the GRESB 5-Star Designation and ENERGY STAR certifications [26][27].