Kilroy Realty (KRC) BofA NY Global Real Estate Conference 2026 summary

Portfolio performance and market trends

• Significant leasing momentum and activity across all major markets, especially in San Francisco Bay Area, with AI, tech, professional services, and legal sectors driving demand.

• Bellevue and Seattle portfolios have seen increased leasing, with repositioned assets attracting top-tier law firms and Fortune 100 companies.

• San Diego's Del Mar remains a top performer, achieving record office rents and strong tenant demand for mixed-use environments.

• Austin's Indeed Tower has experienced a recent uptick in tour activity and leasing, with rents trending positively.

• Los Angeles shows green shoots, particularly in defense, aerospace, robotics, and advanced manufacturing, with targeted capital recycling into high-performing submarkets like Beverly Hills and Culver City.

Leasing dynamics and tenant demand

• San Francisco's 201 Third Street asset rebounded from 20% to 90% occupancy, driven by AI, tech, and diverse tenants, with effective rents up 30%.

• Robotics and life science demand is surging, with 0.5 million sq ft in San Francisco and 1.5 million sq ft on the Peninsula, leading to competition for quality space.

• Life science tenant sentiment has improved, supported by capital market recovery, M&A activity, and IPO windows reopening.

• Larger format tenants are seeking early renewals due to tightening supply of competitive large blocks, pushing rent growth and occupancy rates.

• Robotics demand is a new trend, with both large established companies and startups seeking space, especially in the Bay Area and Silicon Valley.

Asset management and capital allocation

• Strategic dispositions and acquisitions have focused the portfolio on high-quality, growth-oriented assets, reducing exposure to underperforming locations.

• Nearly $300 million of capital has been recycled out of Hollywood and Santa Monica, with successful acquisitions in Beverly Hills exceeding underwriting expectations.

• Ongoing evaluation of the DIRECTV campus in El Segundo, with parcelization underway to enhance flexibility ahead of the 2027 lease expiration.

• Flower Mart site in San Francisco is progressing toward greater development flexibility, with a decision on use mix expected by year-end.

• Focus remains on balancing growth with durability, targeting micro-markets with high barriers to entry and strong demand drivers.