Kilroy Realty (KRC) Q1 2026 earnings summary

Executive summary

• Achieved the strongest first-quarter leasing since 2017, signing 568,000 sq ft across the West Coast, with significant activity in San Francisco, SoMa, and major expansions by AI tenants.

• Sold approximately $350 million of non-core and non-strategic properties year-to-date, reallocating capital to debt repayment, share repurchases, and development projects, including a pre-leased joint venture at 1900 Broadway.

• Repurchased 2.4 million shares for $72.7 million and declared a quarterly dividend of $0.54 per share.

• Portfolio includes 123 stabilized office and life science properties totaling 17.1 million sq ft at 77.6% occupancy, plus one stabilized residential property at 95% occupancy.

• Two residential properties in Los Angeles were classified as held for sale and sold in April 2026.

Financial highlights

• Q1 2026 revenues were $270.1 million, nearly flat year-over-year.

• Net loss attributable to common stockholders was $19.3 million ($-0.16 per diluted share), compared to net income of $39.0 million ($0.33 per diluted share) in Q1 2025, primarily due to a $61.8 million impairment charge.

• Funds from operations (FFO) totaled $108.8 million ($0.91 per diluted share), down from $122.3 million ($1.02 per diluted share) year-over-year.

• Net operating income margin was 66.1%; net debt to EBITDAre ratio was 7.0x.

• Declared and paid a quarterly dividend of $0.54 per share.

Outlook and guidance

• Full-year 2026 Nareit FFO guidance raised to $3.49–$3.63 per diluted share, reflecting improved core performance and settlement income.

• Average full-year occupancy expected at 76.5%–78.0% (excluding KOP 2: 80.5%–81.5%).

• Same property cash NOI growth projected at 0.25%–1.25%, up 150 basis points at the midpoint.

• Management expects to spend $100–$150 million on development projects for the remainder of 2026.

• Guidance includes $5.9 million in settlement income received in Q2 2026.