Kilroy Realty Corp 10-Q for FY2026 Q3
Kilroy Realty Corp (KRC)
10-Q
2026-10-23
For: 2026-09-30
View Original
Added on
October 23, 2026
About this 10-Q
Kilroy Realty Corp filed this 10-Q on October 23, 2026, covering the quarter ended September 30, 2026 (FY2026 Q3).
Kilroy Realty Corp’s stabilized portfolio expanded to 123 office and life science properties and approximately 17.1 million rentable square feet as of September 30, 2026, while occupancy was 76.9% and third-quarter Net Operating Income declined $15.6 million year over year. AI summary
Headline figures
Quarter ended September 30, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $271.6M
- down 2.9% from $279.74M a year earlier
- Net income
- $20.27M
- down 87.5% from net income of $162.28M a year earlier
- Diluted EPS
- $0.13
- down 90.1% from $1.31 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended September 30, 2026
OR
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from to
Commission File Number: 1-12675 (Kilroy Realty Corporation)
Commission File Number: 000-54005 (Kilroy Realty, L.P.)
(Exact name of registrant as specified in its charter)
| Kilroy Realty Corporation | |||||||||||
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||||||||
| Kilroy Realty, L.P. | |||||||||||
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||||||||
(Address of principal executive offices) (Zip Code)
(310 ) 481-8400
| (Registrant's telephone number, including area code) | ||||||||
| N/A | ||||||||
| (Former name, former address and former fiscal year, if changed since last report) | ||||||||
| Securities registered pursuant to Section 12(b) of the Act: | |||||||||||
| Registrant | Title of each class | Name of each exchange on which registered | Ticker Symbol | ||||||||
| Kilroy Realty Corporation | |||||||||||
| Securities registered pursuant to Section 12(g) of the Act: | |||||
| Registrant | Title of each class | ||||
| Kilroy Realty, L.P. | |||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Kilroy Realty Corporation Yes ☑ No ☐
Kilroy Realty, L.P. Yes ☑ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Kilroy Realty Corporation Yes ☑ No ☐
Kilroy Realty, L.P. Yes ☑ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Kilroy Realty Corporation
Non-accelerated filer ☐ Smaller reporting company ☐
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Kilroy Realty, L.P.
Large accelerated filer ☐ Accelerated filer ☐
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Kilroy Realty Corporation Yes ☐ No ☑
Kilroy Realty, L.P. Yes ☐ No ☑
As of October 20, 2026, 116,308,988 shares of Kilroy Realty Corporation common stock, par value $.01 per share, were outstanding.
EXPLANATORY NOTE
This report combines the quarterly reports on Form 10-Q for the period ended September 30, 2026 of Kilroy Realty Corporation and Kilroy Realty, L.P. Unless stated otherwise or the context otherwise requires, references to “Kilroy Realty Corporation” or the “Company,” “we,” “our,” and “us” mean Kilroy Realty Corporation, a Maryland corporation, and its controlled and consolidated subsidiaries, and references to “Kilroy Realty, L.P.” or the “Operating Partnership” mean Kilroy Realty, L.P., a Delaware limited partnership, and its controlled and consolidated subsidiaries.
The Company is a real estate investment trust, or REIT, and the general partner of the Operating Partnership. As of September 30, 2026, the Company owned an approximate 99.0% common general partnership interest in the Operating Partnership and the remaining approximate 1.0% common limited partnership interest was owned by non-affiliated investors. As the sole general partner of the Operating Partnership, the Company exercises exclusive and complete discretion over the Operating Partnership’s day-to-day management and control.
We believe it is important to understand the differences between the Company and the Operating Partnership in the context of how the Company and the Operating Partnership operate as an interrelated, consolidated company. The Company does not conduct business itself, other than acting as the sole general partner of the Operating Partnership, issuing equity from time to time and guaranteeing certain debt of the Operating Partnership. The Operating Partnership owns substantially all of the assets of the Company either directly or through its subsidiaries, conducts the operations of the Company’s business, and is structured as a limited partnership with no publicly traded equity. Except for net proceeds from equity issuances by the Company, which the Company generally contributes to the Operating Partnership in exchange for units of partnership interest, the Operating Partnership generates the capital required by the Company’s business through the Operating Partnership’s operations, the incurrence of indebtedness, or the issuance of units of partnership interest.
The presentation of noncontrolling interests, stockholders’ equity, and partners’ capital are the main areas of difference between the consolidated financial statements of the Company and those of the Operating Partnership. The differences between stockholders’ equity, partners’ capital, and noncontrolling interests result from the differences in the equity issued by the Company and the Operating Partnership.
We believe combining the quarterly reports on Form 10-Q of the Company and the Operating Partnership into this single report results in the following benefits:
•Better reflects how management and the analyst community view the business as a single operating unit;
•Enhances investors’ understanding of the Company and the Operating Partnership by enabling them to view the business as a whole and in the same manner as management;
•Creates efficiencies for the Company and the Operating Partnership and results in savings in time, effort, and expense; and
•Creates efficiencies for investors by reducing duplicative disclosure and providing a single document for their review.
i
KILROY REALTY CORPORATION AND KILROY REALTY, L.P.
QUARTERLY REPORT FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2026
TABLE OF CONTENTS
| Page | |||||||||||
| PART I – FINANCIAL INFORMATION | |||||||||||
| Item 1. | |||||||||||
| Item 1. | |||||||||||
| Item 2. | |||||||||||
| Item 3. | |||||||||||
| Item 4. | |||||||||||
| PART II – OTHER INFORMATION | |||||||||||
| Item 1. | |||||||||||
| Item 1A. | |||||||||||
| Item 2. | |||||||||||
| Item 3. | |||||||||||
| Item 4. | |||||||||||
| Item 5. | |||||||||||
| Item 6. | |||||||||||
PART I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED) OF KILROY REALTY CORPORATION
KILROY REALTY CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited; in thousands, except share data)
| September 30, 2026 | December 31, 2025 | ||||||||||
ASSETS | |||||||||||
| Real estate assets: | |||||||||||
| Land | $ | $ | |||||||||
| Buildings and improvements | |||||||||||
| Undeveloped land and construction in progress | |||||||||||
| Total real estate assets held for investment | |||||||||||
| Accumulated depreciation and amortization | ( | ( | |||||||||
| Total real estate assets held for investment, net | |||||||||||
Real estate and other assets held for sale, net | |||||||||||
| Cash and cash equivalents | |||||||||||
| Restricted cash | |||||||||||
| Marketable securities | |||||||||||
Current receivables (net of allowances of $ | |||||||||||
| Deferred rent receivables, net | |||||||||||
| Deferred leasing costs and acquisition-related intangible assets, net | |||||||||||
| Right of use ground lease assets, net | |||||||||||
| Prepaid expenses and other assets, net | |||||||||||
| Total assets | $ | $ | |||||||||
| LIABILITIES AND EQUITY | |||||||||||
| Liabilities: | |||||||||||
| Secured debt, net | $ | $ | |||||||||
| Unsecured debt, net | |||||||||||
| Unsecured line of credit | |||||||||||
| Accounts payable, accrued expenses, and other liabilities | |||||||||||
| Ground lease liabilities | |||||||||||
| Accrued dividends and distributions | |||||||||||
| Deferred revenue and acquisition-related intangible liabilities, net | |||||||||||
| Rents received in advance and tenant security deposits | |||||||||||
| Liabilities related to real estate assets held for sale | |||||||||||
| Total liabilities | |||||||||||
| Commitments and contingencies (Note 10) | |||||||||||
| Equity: | |||||||||||
| Stockholders’ Equity: | |||||||||||
Common stock, $ | |||||||||||
| Additional paid-in capital | |||||||||||
| Retained earnings | |||||||||||
| Total stockholders’ equity | |||||||||||
| Noncontrolling Interests: | |||||||||||
| Common units of the Operating Partnership | |||||||||||
| Consolidated property partnerships | |||||||||||
| Total noncontrolling interests | |||||||||||
| Total equity | |||||||||||
| Total liabilities and equity | $ | $ | |||||||||
See accompanying notes to consolidated financial statements.
1
KILROY REALTY CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited; in thousands, except share and per share data)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Revenues: | |||||||||||||||||||||||
| Rental income | $ | $ | $ | $ | |||||||||||||||||||
| Total revenues | |||||||||||||||||||||||
| Expenses: | |||||||||||||||||||||||
| Property expenses | |||||||||||||||||||||||
| Real estate taxes | |||||||||||||||||||||||
| Ground leases | |||||||||||||||||||||||
| General and administrative expenses | |||||||||||||||||||||||
| Leasing costs | |||||||||||||||||||||||
| Depreciation and amortization | |||||||||||||||||||||||
| Total expenses | |||||||||||||||||||||||
| Other Income (Expenses): | |||||||||||||||||||||||
| Interest income | |||||||||||||||||||||||
| Interest expense | ( | ( | ( | ( | |||||||||||||||||||
| Other income | |||||||||||||||||||||||
| Gains on sales of depreciable operating properties | |||||||||||||||||||||||
| Impairment of real estate assets | ( | ||||||||||||||||||||||
| Total other (expenses) income | ( | ( | |||||||||||||||||||||
| Net income | |||||||||||||||||||||||
| Net income attributable to noncontrolling common units of the Operating Partnership | ( | ( | ( | ( | |||||||||||||||||||
| Net income attributable to noncontrolling interests in consolidated property partnerships | ( | ( | ( | ( | |||||||||||||||||||
| Total net income attributable to noncontrolling interests | ( | ( | ( | ( | |||||||||||||||||||
| Net income available to common stockholders | $ | $ | $ | $ | |||||||||||||||||||
| Net income available to common stockholders per share – basic | $ | $ | $ | $ | |||||||||||||||||||
| Net income available to common stockholders per share – diluted | $ | $ | $ | $ | |||||||||||||||||||
| Weighted average shares of common stock outstanding – basic | |||||||||||||||||||||||
| Weighted average shares of common stock outstanding – diluted | |||||||||||||||||||||||
See accompanying notes to consolidated financial statements.
2
KILROY REALTY CORPORATION
CONSOLIDATED STATEMENTS OF EQUITY
(Unaudited; in thousands, except share and per share/unit data)
| Common Stock | Total Stock- holders’ Equity | Noncontrolling Interests | Total Equity | ||||||||||||||||||||||||||||||||||||||||||||
| Number of Shares | Common Stock | Additional Paid-in Capital | Retained Earnings | ||||||||||||||||||||||||||||||||||||||||||||
| Balance as of December 31, 2025 | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||
| Net (loss) income | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Issuance of share-based compensation awards | |||||||||||||||||||||||||||||||||||||||||||||||
| Non-cash amortization of share-based compensation | |||||||||||||||||||||||||||||||||||||||||||||||
| Repurchase of common stock | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
| Net settlement of restricted stock units for shares of common stock | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Contributions from noncontrolling interests in consolidated property partnerships | — | ||||||||||||||||||||||||||||||||||||||||||||||
| Distributions to noncontrolling interests in consolidated property partnerships | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Adjustment for noncontrolling interest in the Operating Partnership | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Dividends declared per share of common stock and common unit ($ | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||
| Balance as of March 31, 2026 | |||||||||||||||||||||||||||||||||||||||||||||||
| Net income | |||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of share-based compensation awards | |||||||||||||||||||||||||||||||||||||||||||||||
| Non-cash amortization of share-based compensation | |||||||||||||||||||||||||||||||||||||||||||||||
| Net settlement of restricted stock units for shares of common stock | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Distributions to noncontrolling interests in consolidated property partnerships | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Adjustment for noncontrolling interest in the Operating Partnership | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Dividends declared per common share and common unit ($ | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||
| Balance as of June 30, 2026 | |||||||||||||||||||||||||||||||||||||||||||||||
| Net income | |||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of share-based compensation awards | |||||||||||||||||||||||||||||||||||||||||||||||
| Non-cash amortization of share-based compensation | |||||||||||||||||||||||||||||||||||||||||||||||
| Distributions to noncontrolling interests in consolidated property partnerships | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Adjustment for noncontrolling interest in the Operating Partnership | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Dividends declared per common share and common unit ($ | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||
| Balance as of September 30, 2026 | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||
3
| Common Stock | Total Stock- holders’ Equity | Noncontrolling Interests | Total Equity | ||||||||||||||||||||||||||||||||||||||||||||
| Number of Shares | Common Stock | Additional Paid-in Capital | Retained Earnings | ||||||||||||||||||||||||||||||||||||||||||||
| Balance as of December 31, 2024 | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||
| Net income | |||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of share-based compensation awards | |||||||||||||||||||||||||||||||||||||||||||||||
| Non-cash amortization of share-based compensation | |||||||||||||||||||||||||||||||||||||||||||||||
| Net settlement of restricted stock units for shares of common stock | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Distributions to noncontrolling interests in consolidated property partnerships | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Adjustment for noncontrolling interest in the Operating Partnership | ( | ||||||||||||||||||||||||||||||||||||||||||||||
Dividends declared per share of common stock and common unit ($ | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||
| Balance as of March 31, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||
| Net income | |||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of share-based compensation awards | |||||||||||||||||||||||||||||||||||||||||||||||
| Non-cash amortization of share-based compensation | |||||||||||||||||||||||||||||||||||||||||||||||
| Net settlement of restricted stock units for shares of common stock | — | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||
| Distributions to noncontrolling interests in consolidated property partnerships | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Adjustment for noncontrolling interest in the Operating Partnership | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Dividends declared per common share and common unit ($ | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||
| Balance as of June 30, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||
| Net income | |||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of share-based compensation awards | |||||||||||||||||||||||||||||||||||||||||||||||
| Non-cash amortization of share-based compensation | |||||||||||||||||||||||||||||||||||||||||||||||
| Net settlement of restricted stock units for shares of common stock | — | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||
| Distributions to noncontrolling interests in consolidated property partnerships | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Adjustment for noncontrolling interest in the Operating Partnership | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Dividends declared per common share and common unit ($ | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||
| Balance as of September 30, 2025 | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||
See accompanying notes to consolidated financial statements.
4
KILROY REALTY CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited; in thousands)
| Nine Months Ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Cash flows from operating activities: | |||||||||||
| Net income | $ | $ | |||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Depreciation and amortization of real estate assets and leasing costs | |||||||||||
Depreciation of non-real estate furniture, fixtures, and equipment | |||||||||||
| Revenues deemed uncollectible | |||||||||||
| Non-cash amortization of deferred revenue related to tenant-funded tenant improvements | ( | ( | |||||||||
| Straight-line rents, net | |||||||||||
Non-cash amortization of net below-market rents | ( | ( | |||||||||
| Non-cash amortization of deferred financing costs and debt discounts | |||||||||||
| Non-cash amortization of share-based compensation awards | |||||||||||
| Amortization of right of use ground lease assets | |||||||||||
| Gains on sales of depreciable operating properties | ( | ( | |||||||||
| Impairment of real estate assets | |||||||||||
| Net change in other operating assets | ( | ( | |||||||||
| Net change in other operating liabilities | |||||||||||
| Net cash provided by operating activities | |||||||||||
| Cash flows from investing activities: | |||||||||||
| Expenditures for development and redevelopment properties and undeveloped land | ( | ( | |||||||||
| Expenditures for operating properties and other capital assets | ( | ( | |||||||||
Net proceeds received from dispositions of real estate assets | |||||||||||
| Investment in unconsolidated investment fund | ( | ||||||||||
| Expenditures for acquisitions of operating properties | ( | ||||||||||
| Net cash provided by (used in) investing activities | ( | ||||||||||
| Cash flows from financing activities: | |||||||||||
| Distributions to noncontrolling interests in consolidated property partnerships | ( | ( | |||||||||
| Dividends and distributions paid to common stockholders and common unitholders | ( | ( | |||||||||
| Taxes paid upon net share settlement of restricted share units | ( | ( | |||||||||
| Principal payments and repayments of secured debt | ( | ( | |||||||||
| Financing costs | ( | ( | |||||||||
| Repurchase of common stock | ( | ||||||||||
| Repayments of unsecured debt | ( | ( | |||||||||
| Borrowings on unsecured revolving credit facility | |||||||||||
| Repayments on unsecured revolving credit facility | ( | ( | |||||||||
| Proceeds from the issuance of unsecured debt | |||||||||||
| Net cash used in financing activities | ( | ( | |||||||||
| Net (decrease) increase in cash and cash equivalents and restricted cash | ( | ||||||||||
| Cash and cash equivalents, beginning of period | |||||||||||
| Cash and cash equivalents and restricted cash, end of period | $ | $ | |||||||||
See accompanying notes to consolidated financial statements.
5
ITEM 1: FINANCIAL STATEMENTS (UNAUDITED) OF KILROY REALTY, L.P.
KILROY REALTY, L.P.
CONSOLIDATED BALANCE SHEETS
(Unaudited; in thousands, except unit data)
| September 30, 2026 | December 31, 2025 | ||||||||||
ASSETS | |||||||||||
| Real estate assets: | |||||||||||
| Land | $ | $ | |||||||||
| Buildings and improvements | |||||||||||
| Undeveloped land and construction in progress | |||||||||||
| Total real estate assets held for investment | |||||||||||
| Accumulated depreciation and amortization | ( | ( | |||||||||
| Total real estate assets held for investment, net | |||||||||||
Real estate and other assets held for sale, net | |||||||||||
| Cash and cash equivalents | |||||||||||
| Restricted cash | |||||||||||
| Marketable securities | |||||||||||
Current receivables (net of allowances of $ | |||||||||||
| Deferred rent receivables, net | |||||||||||
| Deferred leasing costs and acquisition-related intangible assets, net | |||||||||||
| Right of use ground lease assets, net | |||||||||||
| Prepaid expenses and other assets, net | |||||||||||
| Total assets | $ | $ | |||||||||
| LIABILITIES AND CAPITAL | |||||||||||
| Liabilities: | |||||||||||
| Secured debt, net | $ | $ | |||||||||
| Unsecured debt, net | |||||||||||
| Unsecured line of credit | |||||||||||
| Accounts payable, accrued expenses, and other liabilities | |||||||||||
| Ground lease liabilities | |||||||||||
| Accrued distributions | |||||||||||
| Deferred revenue and acquisition-related intangible liabilities, net | |||||||||||
| Rents received in advance and tenant security deposits | |||||||||||
| Liabilities related to real estate assets held for sale | |||||||||||
| Total liabilities | |||||||||||
Commitments and contingencies (Note 10) | |||||||||||
| Capital: | |||||||||||
Partner's Capital - Common units, | |||||||||||
| Noncontrolling interests in consolidated property partnerships | |||||||||||
| Total capital | |||||||||||
| Total liabilities and capital | $ | $ | |||||||||
See accompanying notes to consolidated financial statements.
6
KILROY REALTY, L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited; in thousands, except unit and per unit data)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Revenues: | |||||||||||||||||||||||
| Rental income | $ | $ | $ | $ | |||||||||||||||||||
| Total revenues | |||||||||||||||||||||||
| Expenses: | |||||||||||||||||||||||
| Property expenses | |||||||||||||||||||||||
| Real estate taxes | |||||||||||||||||||||||
| Ground leases | |||||||||||||||||||||||
| General and administrative expenses | |||||||||||||||||||||||
| Leasing costs | |||||||||||||||||||||||
| Depreciation and amortization | |||||||||||||||||||||||
| Total expenses | |||||||||||||||||||||||
| Other Income (Expenses): | |||||||||||||||||||||||
| Interest income | |||||||||||||||||||||||
| Interest expense | ( | ( | ( | ( | |||||||||||||||||||
| Other income | |||||||||||||||||||||||
| Gains on sales of depreciable operating properties | |||||||||||||||||||||||
| Impairment of real estate assets | ( | ||||||||||||||||||||||
| Total other (expenses) income | ( | ( | |||||||||||||||||||||
| Net income | |||||||||||||||||||||||
| Net income attributable to noncontrolling interests in consolidated property partnerships | ( | ( | ( | ( | |||||||||||||||||||
| Net income available to common unitholders | $ | $ | $ | $ | |||||||||||||||||||
| Net income available to common unitholders per unit – basic | $ | $ | $ | $ | |||||||||||||||||||
| Net income available to common unitholders per unit – diluted | $ | $ | $ | $ | |||||||||||||||||||
| Weighted average common units outstanding – basic | |||||||||||||||||||||||
| Weighted average common units outstanding – diluted | |||||||||||||||||||||||
See accompanying notes to consolidated financial statements.
7
KILROY REALTY, L.P.
CONSOLIDATED STATEMENTS OF CAPITAL
(Unaudited; in thousands, except unit and per unit data)
| Partners’ Capital | Noncontrolling Interests in Consolidated Property Partnerships | ||||||||||||||||||||||||||||
| Number of Common Units | Common Units | Total Capital | |||||||||||||||||||||||||||
| Balance as of December 31, 2025 | $ | $ | $ | ||||||||||||||||||||||||||
| Net (loss) income | ( | ( | |||||||||||||||||||||||||||
| Issuance of share-based compensation awards | |||||||||||||||||||||||||||||
| Non-cash amortization of share-based compensation | |||||||||||||||||||||||||||||
| Repurchase of common units | ( | ( | ( | ||||||||||||||||||||||||||
| Net settlement of restricted stock units | ( | ( | |||||||||||||||||||||||||||
| Contributions from noncontrolling interests in consolidated property partnerships | |||||||||||||||||||||||||||||
| Distributions to noncontrolling interests in consolidated property partnerships | ( | ( | |||||||||||||||||||||||||||
Distributions declared per common unit ($ | ( | ( | |||||||||||||||||||||||||||
| Balance as of March 31, 2026 | |||||||||||||||||||||||||||||
| Net income | |||||||||||||||||||||||||||||
| Issuance of share-based compensation awards | |||||||||||||||||||||||||||||
| Non-cash amortization of share-based compensation | |||||||||||||||||||||||||||||
| Net settlement of restricted stock units | — | ||||||||||||||||||||||||||||
| Distributions to noncontrolling interests in consolidated property partnerships | ( | ( | |||||||||||||||||||||||||||
Distributions declared per common unit ($ | ( | ( | |||||||||||||||||||||||||||
| Balance as of June 30, 2026 | |||||||||||||||||||||||||||||
| Net income | |||||||||||||||||||||||||||||
| Issuance of share-based compensation awards | |||||||||||||||||||||||||||||
| Non-cash amortization of share-based compensation | |||||||||||||||||||||||||||||
| Distributions to noncontrolling interests in consolidated property partnerships | ( | ( | |||||||||||||||||||||||||||
Distributions declared per common unit ($ | ( | ( | |||||||||||||||||||||||||||
| Balance as of September 30, 2026 | $ | $ | $ | ||||||||||||||||||||||||||
8
| Partners’ Capital | Noncontrolling Interests in Consolidated Property Partnerships | Total Capital | |||||||||||||||||||||
| Number of Common Units | Common Units | ||||||||||||||||||||||
| Balance as of December 31, 2024 | $ | $ | $ | ||||||||||||||||||||
| Net income | |||||||||||||||||||||||
| Issuance of share-based compensation awards | |||||||||||||||||||||||
| Non-cash amortization of share-based compensation | |||||||||||||||||||||||
| Net settlement of restricted stock units | ( | ( | |||||||||||||||||||||
| Distributions to noncontrolling interests in consolidated property partnerships | ( | ( | |||||||||||||||||||||
Distributions declared per common unit ($ | ( | ( | |||||||||||||||||||||
| Balance as of March 31, 2025 | |||||||||||||||||||||||
| Net income | |||||||||||||||||||||||
| Issuance of share-based compensation awards | |||||||||||||||||||||||
| Non-cash amortization of share-based compensation | |||||||||||||||||||||||
| Net settlement of restricted stock units | ( | ( | |||||||||||||||||||||
| Distributions to noncontrolling interests in consolidated property partnerships | ( | ( | |||||||||||||||||||||
Distributions declared per common unit ($ | ( | ( | |||||||||||||||||||||
| Balance as of June 30, 2025 | |||||||||||||||||||||||
| Net income | |||||||||||||||||||||||
| Issuance of share-based compensation awards | |||||||||||||||||||||||
| Non-cash amortization of share-based compensation | |||||||||||||||||||||||
| Net settlement of restricted stock units | ( | ( | |||||||||||||||||||||
| Distributions to noncontrolling interests in consolidated property partnerships | ( | ( | |||||||||||||||||||||
Distributions declared per common unit ($ | ( | ( | |||||||||||||||||||||
| Balance as of September 30, 2025 | $ | $ | $ | ||||||||||||||||||||
See accompanying notes to consolidated financial statements.
9
KILROY REALTY, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited; in thousands)
| Nine Months Ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Cash flows from operating activities: | |||||||||||
| Net income | $ | $ | |||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Depreciation and amortization of real estate assets and leasing costs | |||||||||||
| Depreciation of non-real estate furniture, fixtures, and equipment | |||||||||||
| Revenues deemed uncollectible | |||||||||||
| Non-cash amortization of deferred revenue related to tenant-funded tenant improvements | ( | ( | |||||||||
| Straight-line rents, net | |||||||||||
| Non-cash amortization of net below-market rents | ( | ( | |||||||||
| Non-cash amortization of deferred financing costs and debt discounts | |||||||||||
| Non-cash amortization of share-based compensation awards | |||||||||||
| Amortization of right of use ground lease assets | |||||||||||
| Gains on sales of depreciable operating properties | ( | ( | |||||||||
| Impairment of real estate assets | |||||||||||
| Net change in other operating assets | ( | ( | |||||||||
| Net change in other operating liabilities | |||||||||||
| Net cash provided by operating activities | |||||||||||
| Cash flows from investing activities: | |||||||||||
| Expenditures for development and redevelopment properties and undeveloped land | ( | ( | |||||||||
| Expenditures for operating properties and other capital assets | ( | ( | |||||||||
| Net proceeds received from dispositions of real estate assets | |||||||||||
| Investment in unconsolidated investment fund | ( | ||||||||||
| Expenditures for acquisitions of operating properties | ( | ||||||||||
| Net cash provided by (used in) investing activities | ( | ||||||||||
| Cash flows from financing activities: | |||||||||||
| Distributions to noncontrolling interests in consolidated property partnerships | ( | ( | |||||||||
| Distributions paid to common unitholders | ( | ( | |||||||||
| Taxes paid upon net share settlement of restricted share units | ( | ( | |||||||||
| Principal payments and repayments of secured debt | ( | ( | |||||||||
| Financing costs | ( | ( | |||||||||
| Repurchase of common units | ( | ||||||||||
| Repayments of unsecured debt | ( | ( | |||||||||
| Borrowings on unsecured revolving credit facility | |||||||||||
| Repayments on unsecured revolving credit facility | ( | ( | |||||||||
| Proceeds from the issuance of unsecured debt | |||||||||||
| Net cash used in financing activities | ( | ( | |||||||||
| Net (decrease) increase in cash and cash equivalents and restricted cash | ( | ||||||||||
| Cash and cash equivalents, beginning of period | |||||||||||
| Cash and cash equivalents and restricted cash, end of period | $ | $ | |||||||||
See accompanying notes to consolidated financial statements.
10
KILROY REALTY CORPORATION AND KILROY REALTY, L.P.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
1. Organization, Ownership, and Basis of Presentation
Kilroy Realty Corporation (the “Company”) is a self-administered real estate investment trust (“REIT”) active in premier office, life science, and mixed-use property types in the United States. Our approach to modern business environments is designed to drive creativity and productivity for some of the world’s leading technology, media, life science, and professional services companies and we have been consistently recognized for our leadership in sustainability and building operations. We own, manage, develop, and acquire primarily premier office and life science properties in the San Francisco Bay Area, Los Angeles, Seattle, San Diego, and Austin, which are markets we believe have long-term strategic advantages and strong barriers to entry. The Company qualifies as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”). The Company’s common stock is publicly traded on the New York Stock Exchange (“NYSE”) under the ticker symbol “KRC.”
We own our interests in all of our real estate assets through Kilroy Realty, L.P. (the “Operating Partnership”) and conduct substantially all of our operations through the Operating Partnership. Unless stated otherwise or the context otherwise requires, the terms “Kilroy Realty Corporation” or the “Company,” “we,” “our,” and “us” refer to Kilroy Realty Corporation and its consolidated subsidiaries, including the Operating Partnership, and the term “Operating Partnership” refers to Kilroy Realty, L.P. and its consolidated subsidiaries. The descriptions of our business, employees, and properties apply to both the Company and the Operating Partnership.
Our stabilized portfolio of operating properties was comprised of the following at September 30, 2026:
| Number of Buildings | Rentable Square Feet | Number of Tenants | Percentage Occupied (1) | ||||||||||||||||||||||||||
Stabilized Office and Life Science Properties (2) | % | ||||||||||||||||||||||||||||
(1)Represents economic occupancy for space where we have achieved revenue recognition for the associated lease agreements.
(2)Includes ancillary retail space.
| Number of Properties | Number of Units | 2026 Average Occupancy | |||||||||||||||
Stabilized Residential Property | % | ||||||||||||||||
Our stabilized portfolio includes all properties except properties under development and redevelopment or in the tenant improvement phase, undeveloped land, and real estate assets held for sale, if any. Redevelopment properties are those for which we expect to spend significant costs to change their use, with the intention of improving economic return. Properties in the tenant improvement phase are ready for tenant modifications after reaching “cold shell condition,” which may require additional base building modifications. Projects in the tenant improvement phase are moved into our stabilized portfolio once the project reaches the earlier of 95 % occupancy or one year from the date of the cessation of major base building construction activities. Capitalized development costs are transferred to relevant asset categories on the balance sheet as projects or phases of projects are placed in service.
Our stabilized portfolio also excludes our future development pipeline, which, as of September 30, 2026, was comprised of nine potential future development sites.
The consolidated financial statements of the Company include the consolidated financial position and results of operations of the Company, the Operating Partnership, and the following “Consolidated Property Partnerships”:
| Consolidated Property Partnership | Property Address | Ownership Interest (1) (2) | ||||||||||||
100 First Street Member, LLC (“100 First LLC”) | 100 1st Street, San Francisco, CA 94105 | |||||||||||||
303 Second Street Member, LLC (“303 Second LLC”) | 303 2nd Street, San Francisco, CA 94107 | |||||||||||||
Redwood City Partners, LLC (“Redwood LLC”) | 900 Jefferson Avenue, Redwood City, CA 94063 | |||||||||||||
| 900 Middlefield Road, Redwood City, CA 94063 | ||||||||||||||
| 1900 Broadway Partners, LLC (“1900 Broadway LLC”) | 1900 Broadway, Redwood City, CA 94063 | |||||||||||||
________________________
(1)For 100 First LLC, 303 Second LLC, and Redwood LLC, reflects the Company’s ownership percentage at time of agreement. For Redwood LLC, actual percentage may vary depending on cash flows or promote structure. For 1900 Broadway LLC, reflects expected ownership percentage upon completion of construction.
11
KILROY REALTY CORPORATION AND KILROY REALTY, L.P.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
As of September 30, 2026, the Company owned an approximate 99.0 % common general partnership interest in the Operating Partnership, and the remaining approximate 1.0 % common limited partnership interest in the Operating Partnership was owned by non-affiliated investors. Both the general and limited common partnership interests in the Operating Partnership are denominated in common units. Generally, the number of common units held by the Company is equivalent to the number of outstanding shares of the Company’s common stock, and the rights of all the common units to quarterly distributions and payments in liquidation mirror those of the Company’s common stockholders. The common limited partners have certain redemption rights as provided in the Operating Partnership’s Seventh Amended and Restated Agreement of Limited Partnership, as amended (the “Partnership Agreement”).
With the exception of the Operating Partnership and our Consolidated Property Partnerships, all of our subsidiaries are wholly-owned. The consolidated financial statements of the Operating Partnership include the consolidated financial position and results of operations of the Operating Partnership, the Consolidated Property Partnerships, and all of our wholly-owned and controlled subsidiaries. All intercompany balances and transactions have been eliminated in the consolidated financial statements.
The accompanying interim financial statements have been prepared by management in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and in conjunction with the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures required for annual financial statements have been condensed or excluded pursuant to SEC rules and regulations. Accordingly, the interim financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the accompanying interim financial statements reflect all adjustments of a normal and recurring nature that are considered necessary for a fair presentation of the results for the interim periods presented. However, the results of operations for the interim periods are not necessarily indicative of the results that may be expected for the year ending December 31, 2026. The interim financial statements for the Company and the Operating Partnership should be read in conjunction with the audited consolidated financial statements and notes thereto included in our annual report on Form 10-K for the year ended December 31, 2025.
Beginning in 2026, the Company combined certain line items in the Consolidated Statements of Equity. The Company determined that separate disclosure for certain line items was not meaningful to the users of the financial statements. The settlement of restricted stock units for shares of common stock is now presented net of shares withheld and payments made to settle tax obligations. Historical presentation has been revised to conform with the current period presentation. These presentation changes did not affect the total equity balance, net income, or earnings per share in any of the periods reported.
Variable Interest Entities
| September 30, 2026 | December 31, 2025 | ||||||||||
| ($ in thousands) | |||||||||||
| Number of VIEs | |||||||||||
Total assets (1) | $ | $ | |||||||||
| Total liabilities | $ | $ | |||||||||
| Total noncontrolling interests | $ | $ | |||||||||
____________________
(1)Includes $385.6 million and $319.4 million related to real estate assets held for investment, net, as of September 30, 2026 and December 31, 2025, respectively.
12
KILROY REALTY CORPORATION AND KILROY REALTY, L.P.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
Recently Issued Accounting Pronouncements
In November 2024, the FASB issued ASU 2024-03 “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses.” The ASU is effective for annual periods beginning after December 15, 2026 and interim periods beginning after December 15, 2027. The Company continues to evaluate the impact of this guidance on our consolidated financial statements or notes to our consolidated financial statements.
In May 2026, the FASB issued ASU 2026-02,“Environmental Credits and Environmental Credit Obligations (Topic 818).” The ASU establishes accounting and disclosure requirements for environmental credits and environmental credit obligations, including guidance on recognition, measurement, presentation, and disclosure. The amendments are effective for annual reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact that adoption of this guidance will have on its consolidated financial statements and related disclosures.
2. Dispositions
Operating Property Dispositions
The Company did not have any operating property dispositions during the three months ended September 30, 2026. The following table summarizes the operating properties sold during the nine months ended September 30, 2026:
| Month of Disposition | Number of Buildings | Rentable Square Feet / Units | Sales Price (1) | Gain on Sale / (Impairment) | ||||||||||||||||||||||||||||
| (in millions) | ||||||||||||||||||||||||||||||||
| Office | ||||||||||||||||||||||||||||||||
Kilroy Sabre Springs, I-15 Corridor, CA (2) | January | $ | $ | |||||||||||||||||||||||||||||
| 12348 High Bluff Drive (Del Mar Tech Center), Del Mar, CA | March | |||||||||||||||||||||||||||||||
| Total Office | $ | $ | ||||||||||||||||||||||||||||||
| Residential | ||||||||||||||||||||||||||||||||
Hollywood Residential Properties (3) | April | $ | $ | ( | ||||||||||||||||||||||||||||
| Total Residential | $ | $ | ( | |||||||||||||||||||||||||||||
| Total Dispositions | $ | $ | ( | |||||||||||||||||||||||||||||
(1)Represents gross sales price before broker commissions, closing costs, and purchase price credits.
(2)Kilroy Sabre Springs includes the following buildings: 13480, 13500, and 13520 Evening Creek Drive North, San Diego, CA.
(3)The Hollywood Residential Properties include the 200 -unit Columbia Square Living property located at 1550 N. El Centro Avenue, Los Angeles, CA and the 193 -unit Jardine property located at 6390 De Longpre Avenue, Los Angeles, CA. In Q1 2026, recognized an impairment charge of approximately $61.8 million to reduce the carrying amount of these properties to their current fair value, less estimated closing costs.
During the three months ended September 30, 2026, the Company’s East Village land parcel was subject to a signed purchase and sale agreement and non-refundable deposits and is targeted to close during the fourth quarter for an estimated sales price of $19.5 million, subject to buyer’s completion of certain due diligence procedures. The carrying value of the parcel was approximately $63.1 million at September 30, 2026. No impairment was recorded as of September 30, 2026 as the property did not meet held-for-sale criteria and was deemed recoverable based on a probability-weighted undiscounted future cash flow assessment.
Our land holdings have historically been intended for future development. As a result of current market conditions, we continue to evaluate the timing, scope, and economic viability of the development of these assets, as well as alternative strategies. Although our probability-weighted impairment analyses did not result in the recognition of an impairment loss as of September 30, 2026, a change in our development plans, intended use, or anticipated holding period, or changes in the expected economics of future development, could result in an impairment loss in a future period.
13
KILROY REALTY CORPORATION AND KILROY REALTY, L.P.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
3. Prepaid Expenses and Other Assets, net
Prepaid expenses and other assets, net, consisted of the following:
| September 30, 2026 | December 31, 2025 | ||||||||||
| (in thousands) | |||||||||||
Furniture, fixtures, and other long-lived assets, net (1) | $ | $ | |||||||||
| Prepaid expenses, net | |||||||||||
Deferred financing costs, net (2) | |||||||||||
| Other assets | |||||||||||
| Total prepaid expenses and other assets, net | $ | $ | |||||||||
(1)Includes $34.2 million and $43.4 million of accumulated depreciation for furniture, fixtures, and other long-lived assets as of September 30, 2026 and December 31, 2025, respectively.
4. Secured and Unsecured Debt of the Operating Partnership
The Company generally guarantees all of the Operating Partnership’s unsecured debt obligations, including the unsecured revolving credit facility, the unsecured term loan facility, and all of the unsecured senior notes.
Unsecured Debt
Repayment of $200.0 million and $50.0 million Unsecured Senior Notes due 2026
During 2026, the Company repaid an aggregate $250.0 million of unsecured private placement senior notes at par. In April 2026, the Company repaid the outstanding $50.0 million of 4.300 % Private Placement Senior Notes, Series A, which were scheduled to mature in July 2026. In July 2026, the Operating Partnership repaid the outstanding $200.0 million of 4.350 % Private Placement Senior Notes, Series B, which were scheduled to mature in October 2026.
Unsecured Revolving Credit and Term Loan Facilities
In June 2026, the Operating Partnership amended and restated the terms of its unsecured revolving credit facility. The amendment and restatement expanded the borrowing capacity to $1.25 billion and extended the maturity date to July 31, 2030.
The following table summarizes the balance and terms of our unsecured revolving credit facility:
| Unsecured Revolving Credit Facility | |||||||||||
| September 30, 2026 | December 31, 2025 | ||||||||||
| ($ in thousands) | |||||||||||
| Outstanding borrowings | $ | $ | |||||||||
Remaining borrowing capacity (1) | |||||||||||
Total borrowing capacity (1) | $ | $ | |||||||||
Interest rate (2) | % | % | |||||||||
Annual facility fee (3) | |||||||||||
Unamortized deferred financing costs (3) | $ | $ | |||||||||
Maturity date (4) | July 31, 2030 | July 31, 2028 | |||||||||
________________________
(1)We may elect to borrow, subject to bank approval and obtaining commitments for any additional borrowing capacity, up to an additional $450.0 million and $500.0 million as of September 30, 2026 and December 31, 2025, respectively, under an accordion feature pursuant to the terms of the unsecured revolving credit facility. At December 31, 2025, remaining and total borrowing capacity are further reduced by the amount of our outstanding letters of credit, which totals approximately $5.2 million.
(2)Our unsecured revolving credit facility interest rate was calculated using the Secured Overnight Financing Rate (“SOFR”) and a margin of 1.000 % based on our credit rating as of September 30, 2026, and using SOFR plus a SOFR adjustment of 0.10 % (together “Adjusted SOFR”) and a margin of 1.100 % based on our credit rating as of December 31, 2025.
(3)Our annual facility fee is paid on a quarterly basis and is calculated based on total borrowing capacity. In addition to the facility fee, we incurred debt origination and legal costs in connection with the amendment and restatement of the unsecured revolving credit facility, which are included in Prepaid expenses and other assets, net, on our consolidated balance sheets, and will continue to be amortized through the amended maturity date.
(4)The maturity date may be extended by two six-month
The Operating Partnership intends to borrow under the unsecured revolving credit facility from time to time for general corporate purposes, including to finance development and redevelopment expenditures, to fund potential acquisitions, to repay long-term debt, and to supplement cash balances in response to market conditions.
14
KILROY REALTY CORPORATION AND KILROY REALTY, L.P.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
In connection with amending and restating the revolving credit facility, the Operating Partnership amended and restated the unsecured term loan facility, expanding the borrowing capacity to $250.0 million, and extending the maturity date to July 31, 2031. Of the $250.0 million, $50.0 million represents additional delayed draw term loan commitments available to be drawn through June 11, 2027.
The following table summarizes the balance and terms of our Term Loan Facility:
| Term Loan Facility | |||||||||||
| September 30, 2026 | December 31, 2025 | ||||||||||
| ($ in thousands) | |||||||||||
| Outstanding borrowings | $ | $ | |||||||||
| Remaining borrowing capacity | |||||||||||
Total borrowing capacity (1) | $ | $ | |||||||||
Interest rate (2) | % | % | |||||||||
Unamortized deferred financing costs (3) | $ | $ | |||||||||
Maturity date (4) | July 31, 2031 | October 3, 2026 | |||||||||
(1)As of September 30, 2026, we could elect to borrow, subject to bank approval and obtaining commitments for any additional borrowing capacity, up to an additional $150.0 million under an accordion feature pursuant to the terms of the Term Loan Facility. As of December 31, 2025, we could elect to borrow, subject to bank approval and obtaining commitments for any additional borrowing capacity, up to an additional $130.0 million under an accordion feature pursuant to the terms of the previous Term Loan Facility.
(2)Our Term Loan Facility interest rate was calculated using SOFR and a margin of 1.150 % based on our credit rating as of September 30, 2026, and using Adjusted SOFR and a margin of 1.200 % based on our credit rating as of December 31, 2025.
(3)We incurred debt origination and legal costs in connection with the amendment and restatement of the Term Loan Facility in June 2026, which will continue to be amortized through the maturity date of the Term Loan Facility. Approximately $0.5 million of these costs related to the delayed draw term loan commitments available are included in Prepaid expenses and other assets, net on our consolidated balance sheets, and will continue to be amortized through the amended maturity date.
(4)There are no extension options available under the terms of the amended and restated Term Loan Facility. As of December 31, 2025, one 12-month extension option was available.
Financial Covenants and Restrictions
The unsecured revolving credit facility, unsecured term loan facility, unsecured senior notes, including the private placement notes, and certain other secured debt arrangements contain covenants and restrictions requiring us to meet certain financial ratios and reporting requirements. Some of the more restrictive financial covenants include a maximum ratio of total debt to total asset value, a minimum fixed-charge coverage ratio, a maximum ratio of secured debt to total asset value, a minimum unsecured debt ratio, and a minimum unencumbered asset pool debt service coverage ratio. Noncompliance with one or more of the covenants and restrictions could result in the full principal balance of the associated debt becoming immediately due and payable. We were in compliance with all of our financial covenants as of September 30, 2026.
Debt Maturities
The following table summarizes the stated debt maturities and scheduled amortization payments for all outstanding debt as of September 30, 2026:
| Year | (in thousands) | ||||
| Remaining 2026 | $ | ||||
| 2027 | |||||
| 2028 | |||||
| 2029 | |||||
| 2030 | |||||
| 2031 | |||||
| Thereafter | |||||
| Total aggregate principal value | $ | ||||
Less: unamortized net discounts and deferred financing costs (1) | ( | ||||
| Total debt, net | $ | ||||
(1)Includes $23.7 million of unamortized deferred financing costs for the unsecured term loan facility, unsecured senior notes, and secured debt, and $9.9 million of unamortized discounts for the unsecured senior notes. Excludes unamortized deferred financing costs on the unsecured revolving credit facility and a portion of unamortized deferred financing costs related to the delayed term loan commitment, which are included in Prepaid expenses and other assets, net, on our consolidated balance sheets.
15
KILROY REALTY CORPORATION AND KILROY REALTY, L.P.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
Capitalized Interest
The following table sets forth our gross interest expense and capitalized interest. Capitalized interest was recorded as a cost of development and redevelopment and increased the carrying value of undeveloped land and construction in progress:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||
| Gross interest expense | $ | $ | $ | $ | |||||||||||||||||||
Capitalized interest | ( | ( | ( | ( | |||||||||||||||||||
| Interest expense | $ | $ | $ | $ | |||||||||||||||||||
5. Stockholders’ Equity of the Company
At-The-Market Stock Offering Program
Under our at-the-market (“ATM”) stock offering program (the “2024 ATM Program”), which commenced in March 2024, we may offer and sell shares of the Company’s common stock having an aggregate gross sales price of up to $500.0 million from time to time in “at-the-market” offerings. In connection with the 2024 ATM Program, the Company may also, at its discretion, enter into forward equity sale agreements. The use of forward equity sale agreements allows the Company to fix a share price on the sale of shares of our common stock at the time an agreement is executed but defer settling the forward equity sale agreements and receiving the proceeds from the sale of shares until a later date. The Company did not have any outstanding forward equity sale agreements to be settled at September 30, 2026. Since commencement of the 2024 ATM Program, we have not completed any sales of common stock.
Share Repurchase Program
Under our current share repurchase program, which commenced in February 2024 (the “Share Repurchase Program”), we are authorized to repurchase shares of the Company’s common stock having an aggregate gross purchase price of up to $500.0 million. Under the Share Repurchase Program, repurchases may be made from time to time using a variety of methods, which may include open market purchases and privately negotiated transactions. The specific timing, price, and size of purchases will depend on prevailing stock prices, general economic and market conditions, and other considerations. The Share Repurchase Program does not have a termination date and repurchases may be discontinued at any time. We did not repurchase any shares of common stock during the three months ended September 30, 2026. During the nine months ended September 30, 2026, we repurchased 2,357,739 shares of common stock at a weighted average price of $30.80 per common share for an aggregate purchase price of $72.7 million. The remaining repurchase capacity as of September 30, 2026 was $427.3 million.
16
KILROY REALTY CORPORATION AND KILROY REALTY, L.P.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
6. Noncontrolling Interests on the Company’s Consolidated Financial Statements
Common Units of the Operating Partnership
The Company owned an approximate 99.0 % and 99.1 % common general partnership interest in the Operating Partnership as of September 30, 2026 and December 31, 2025, respectively. The remaining approximate 1.0 % and 0.9 % common limited partnership interest as of September 30, 2026 and December 31, 2025, respectively, was owned by non-affiliated investors in the form of noncontrolling common units. There were 1,133,562
The noncontrolling common units may be redeemed by unitholders for cash. Except under certain circumstances, we, at our option, may satisfy the cash redemption obligation with shares of the Company’s common stock on a one -for-one basis. If satisfied in cash, the value for each noncontrolling common unit upon redemption is the amount equal to the average of the closing quoted price per share of the Company’s common stock, par value $0.01 per share, as reported on the NYSE for the ten trading days immediately preceding the applicable redemption date. The aggregate value upon redemption of the then-outstanding noncontrolling common units was $38.7 million and $43.2 million as of September 30, 2026 and December 31, 2025, respectively. This redemption value does not necessarily represent the amount that would be distributed with respect to each noncontrolling common unit in the event of our termination or liquidation. In the event of our termination or liquidation, it is generally expected that each common unit would be entitled to a liquidating distribution equal to the liquidating distribution payable in respect of each share of the Company’s common stock.
Noncontrolling Interest in Consolidated Property Partnerships
Refer to Note 7 “Noncontrolling Interests on the Operating Partnership’s Consolidated Financial Statements” for additional information regarding these Consolidated Property Partnerships.
7. Noncontrolling Interests on the Operating Partnership’s Consolidated Financial Statements
Consolidated Property Partnerships
On February 20, 2026, the Company entered into an agreement with an unaffiliated third party and formed a new consolidated subsidiary. In connection with this formation, we acquired an approximately 1.1 -acre land parcel for the future development project at 1900 Broadway in Redwood City, CA for $36.0 million, of which our joint venture partner contributed $9.0 million. We expect an estimated ownership percentage of 97.4 % upon completion of development activities. The related assets, liabilities, and noncontrolling interest recognized in connection with this transaction are included in the consolidated financial statements as of the date of formation. The noncontrolling equity interest was $9.0 million as of September 30, 2026.
17
KILROY REALTY CORPORATION AND KILROY REALTY, L.P.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
8. Share-Based Compensation
Share-Based Compensation Cost Recorded During the Period
9. Rental Income and Future Minimum Rent
The table below sets forth the allocation of rental income between fixed and variable lease payments and net collectability considerations:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||
| Fixed lease payments | $ | $ | $ | $ | |||||||||||||||||||
| Variable lease payments | |||||||||||||||||||||||
Impact from tenant creditworthiness considerations (1) | ( | ( | ( | ||||||||||||||||||||
| Total rental income | $ | $ | $ | $ | |||||||||||||||||||
_____________________
We have operating leases with tenants that expire at various dates through 2050 and may be subject to scheduled fixed increases and future renewal options. Leases may also provide for reimbursements of certain property-related operating expenses. Future contractual minimum rent under operating leases, which includes amounts contractually due from leases that are on a cash basis of reporting due to tenant creditworthiness considerations, as of September 30, 2026, for future periods, is summarized as follows:
| Year Ending | (in thousands) | ||||
| Remaining 2026 | $ | ||||
| 2027 | |||||
| 2028 | |||||
| 2029 | |||||
| 2030 | |||||
| 2031 | |||||
| Thereafter | |||||
Total (1) | $ | ||||
_____________________
(1)Excludes residential leases and leases with an initial term of less than one year.
18
KILROY REALTY CORPORATION AND KILROY REALTY, L.P.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
10. Commitments and Contingencies
Development and Construction Commitments
As of September 30, 2026, we had commitments ranging from approximately $540.0 million to $560.0 million, excluding our ground lease commitments, for contracts and executed leases directly related to our operating, stabilized development, and future development properties.
Environmental Matters
We had the following accrued environmental remediation liabilities in connection with certain of our future development projects:
| September 30, 2026 | December 31, 2025 | ||||||||||
| (in thousands) | |||||||||||
| Environmental liabilities | $ | $ | |||||||||
Legal Matters
We and our properties are subject to routine litigation incidental to our business. As of September 30, 2026, we are not a defendant in, and our properties are not subject to, any legal proceedings that we believe, if determined adversely to us, would have a material adverse effect upon our financial condition, results of operations or cash flows.
11. Fair Value Measurements and Disclosures
Assets Measured at Fair Value on a Recurring Basis
The only assets we record at fair value on a recurring basis in our consolidated financial statements are the marketable securities related to our Deferred Compensation Plan. The following table sets forth the fair value of our Deferred Compensation Plan:
Fair Value (Level 1) (1) | |||||||||||
| September 30, 2026 | December 31, 2025 | ||||||||||
| Description | (in thousands) | ||||||||||
Deferred Compensation Plan assets (2) | $ | $ | |||||||||
(1) Based on quoted prices in active markets for identical securities.
(2) The Deferred Compensation Plan assets are held in a limited rabbi trust.
Financial Instruments Disclosed at Fair Value
The carrying value of the unsecured line of credit balance approximates fair value due to its short-term nature and its variable interest rate. The following table sets forth the carrying value and the fair value of our other financial instruments:
| September 30, 2026 | December 31, 2025 | ||||||||||||||||||||||
| Carrying Value | Fair Value | Carrying Value | Fair Value | ||||||||||||||||||||
| Liabilities | (in thousands) | ||||||||||||||||||||||
| Secured debt, net | $ | $ | $ | $ | |||||||||||||||||||
| Unsecured debt, net | $ | $ | $ | $ | |||||||||||||||||||
19
KILROY REALTY CORPORATION AND KILROY REALTY, L.P.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
12. Net Income Available to Common Stockholders Per Share of the Company
The following table reconciles the numerator and denominator in computing the Company’s basic and diluted per-share computations for net income available to common stockholders:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (in thousands, except share and per share amounts) | |||||||||||||||||||||||
| Numerator: | |||||||||||||||||||||||
| Net income available to common stockholders | $ | $ | $ | $ | |||||||||||||||||||
Allocation to participating securities (1) | ( | ( | ( | ( | |||||||||||||||||||
| Numerator for basic and diluted net income available to common stockholders | $ | $ | $ | $ | |||||||||||||||||||
| Denominator: | |||||||||||||||||||||||
| Basic weighted average vested shares outstanding | |||||||||||||||||||||||
| Effect of dilutive securities | |||||||||||||||||||||||
| Diluted weighted average vested shares and common stock equivalents outstanding | |||||||||||||||||||||||
| Basic earnings per share: | |||||||||||||||||||||||
| Net income available to common stockholders per share | $ | $ | $ | $ | |||||||||||||||||||
| Diluted earnings per share: | |||||||||||||||||||||||
| Net income available to common stockholders per share | $ | $ | $ | $ | |||||||||||||||||||
________________________
20
KILROY REALTY CORPORATION AND KILROY REALTY, L.P.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
13. Net Income Available to Common Unitholders Per Unit of the Operating Partnership
The following table reconciles the numerator and denominator in computing the Operating Partnership’s basic and diluted per-unit computations for net income available to common unitholders:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (in thousands, except unit and per unit amounts) | |||||||||||||||||||||||
| Numerator: | |||||||||||||||||||||||
| Net income available to common unitholders | $ | $ | $ | $ | |||||||||||||||||||
Allocation to participating securities (1) | ( | ( | ( | ( | |||||||||||||||||||
| Numerator for basic and diluted net income available to common unitholders | $ | $ | $ | $ | |||||||||||||||||||
| Denominator: | |||||||||||||||||||||||
| Basic weighted average vested units outstanding | |||||||||||||||||||||||
| Effect of dilutive securities | |||||||||||||||||||||||
| Diluted weighted average vested units and common unit equivalents outstanding | |||||||||||||||||||||||
| Basic earnings per unit: | |||||||||||||||||||||||
| Net income available to common unitholders per unit | $ | $ | $ | $ | |||||||||||||||||||
| Diluted earnings per unit: | |||||||||||||||||||||||
| Net income available to common unitholders per unit | $ | $ | $ | $ | |||||||||||||||||||
________________________
21
KILROY REALTY CORPORATION AND KILROY REALTY, L.P.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
14. Supplemental Cash Flows Information of the Company and the Operating Partnership
Supplemental cash flows information of the Company is as follows:
| Nine Months Ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| (in thousands) | |||||||||||
| SUPPLEMENTAL CASH FLOWS INFORMATION: | |||||||||||
Cash paid for interest, net of capitalized interest of $ | $ | $ | |||||||||
| Cash paid for amounts included in the measurement of ground lease liabilities | $ | $ | |||||||||
| NON-CASH INVESTING TRANSACTIONS: | |||||||||||
| Accrual for expenditures for operating properties and development and redevelopment properties | $ | $ | |||||||||
| Tenant improvements funded directly by tenants | $ | $ | |||||||||
| Contribution of land by noncontrolling interest to consolidated property partnership | $ | $ | |||||||||
| NON-CASH FINANCING TRANSACTIONS: | |||||||||||
| Issuance of RSU dividend equivalents | $ | $ | |||||||||
| Accrual of dividends and distributions payable to common stockholders and common unitholders | $ | $ | |||||||||
Supplemental cash flows information of the Operating Partnership is as follows:
| Nine Months Ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| (in thousands) | |||||||||||
| SUPPLEMENTAL CASH FLOWS INFORMATION: | |||||||||||
Cash paid for interest, net of capitalized interest of $ | $ | $ | |||||||||
| Cash paid for amounts included in the measurement of ground lease liabilities | $ | $ | |||||||||
| NON-CASH INVESTING TRANSACTIONS: | |||||||||||
| Accrual for expenditures for operating properties and development and redevelopment properties | $ | $ | |||||||||
| Tenant improvements funded directly by tenants | $ | $ | |||||||||
| Contribution of land by noncontrolling interest to consolidated property partnership | $ | $ | |||||||||
| NON-CASH FINANCING TRANSACTIONS: | |||||||||||
| Issuance of RSU dividend equivalents | $ | $ | |||||||||
| Accrual of distributions payable to common unitholders | $ | $ | |||||||||
22
KILROY REALTY CORPORATION AND KILROY REALTY, L.P.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
15. Segments
Operating segments are defined as components of an enterprise that engage in business activities from which they may earn revenues and incur expenses and about which discrete financial information is available that is evaluated regularly by the Chief Operating Decision Maker (“CODM”). The CODM decides how resources are allocated and assesses performance on a recurring basis, at least quarterly. Our CODM is our Chief Executive Officer (“CEO”), who evaluates the operating performance and financial results of our consolidated portfolio based on Net Income through monthly operations meetings.
We conduct our business on a consolidated basis in one operating segment and therefore have one reportable segment. Asset information by segment is not reported because the Company does not use this measure to assess performance.
Our reportable segment derives its revenues primarily from rental revenue and related property income through the leasing of commercial real estate space to tenants. We recognize revenue from base rent (fixed lease payments), additional rent (variable lease payments, which consist of amounts due from tenants for common area maintenance, real estate taxes, percentage rent, and other recoverable costs), parking, and other lease-related revenue. Significant segment expenses include property expenses, real estate taxes, general and administrative expenses, depreciation and amortization, and interest expense. Management reviews these expenses in assessing operating performance and making resource allocation decisions.
The following table presents Net Income:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||
| Revenues: | |||||||||||||||||||||||
| Rental income | $ | $ | $ | $ | |||||||||||||||||||
| Other property income | |||||||||||||||||||||||
| Total revenues | |||||||||||||||||||||||
| Expenses: | |||||||||||||||||||||||
| Property expenses | |||||||||||||||||||||||
| Real estate taxes | |||||||||||||||||||||||
| Ground leases | |||||||||||||||||||||||
| General and administrative expenses | |||||||||||||||||||||||
| Leasing costs | |||||||||||||||||||||||
| Depreciation and amortization | |||||||||||||||||||||||
| Total expenses | |||||||||||||||||||||||
| Other Income (Expenses): | |||||||||||||||||||||||
| Interest income | |||||||||||||||||||||||
| Interest expense | ( | ( | ( | ( | |||||||||||||||||||
| Other income | |||||||||||||||||||||||
| Gains on sales of depreciable operating properties | |||||||||||||||||||||||
| Impairment of real estate assets | ( | ||||||||||||||||||||||
| Total other (expenses) income | ( | ( | |||||||||||||||||||||
| Net income | $ | $ | $ | $ | |||||||||||||||||||
23
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion relates to our consolidated financial statements and should be read in conjunction with the financial statements and notes thereto appearing elsewhere in this report. The results of operations discussion is combined for the Company and the Operating Partnership because there are no material differences in the results of operations between the two reporting entities.
Forward-Looking Statements
Statements contained in this “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” that are not historical facts may be forward-looking statements. Forward-looking statements include, among other things, statements or information concerning our plans, objectives, capital resources, portfolio performance, results of operations, projected future occupancy and rental rates, lease expirations, debt maturities, potential investments, strategies such as capital recycling, development and redevelopment activity, projected construction costs, projected construction commencement and completion dates, projected square footage of space that could be constructed on undeveloped land that we own, projected rentable square footage of or number of units in properties under construction or in the development pipeline, anticipated proceeds from capital recycling activity or other dispositions and anticipated dates of those activities or dispositions, projected increases in the value of properties, dispositions, future executive incentive compensation, pending, potential or proposed acquisitions, plans to grow our Net Operating Income and FFO, our ability to re-lease properties at or above current market rates, anticipated market conditions and demographics and other forward-looking financial data, as well as the discussion in “—Factors That May Influence Future Results of Operations,” “—Liquidity and Capital Resources of the Company,” and “—Liquidity and Capital Resources of the Operating Partnership.” Forward-looking statements can be identified by the use of words such as “believes,” “expects,” “projects,” “may,” “will,” “should,” “seeks,” “approximately,” “intends,” “plans,” “pro forma,” “estimates”, or “anticipates” and the negative of these words and phrases and similar expressions that do not relate to historical matters. Forward-looking statements are based on our current expectations, beliefs, and assumptions, and are not guarantees of future performance. Forward-looking statements are inherently subject to uncertainties, risks, changes in circumstances, trends, and factors that are difficult to predict, many of which are outside of our control. Accordingly, actual performance, results, and events may vary materially from those indicated or implied in the forward-looking statements, and you should not rely on the forward-looking statements as predictions of future performance, results, or events. Numerous factors could cause actual future performance, results, and events to differ materially from those indicated in the forward-looking statements, including, among others: global market and general economic conditions, including actual and potential tariffs and periods of heightened inflation, and their effect on our liquidity and financial conditions and those of our tenants; adverse economic or real estate conditions generally, and specifically, in the states of California, Texas, and Washington; risks associated with our investment in real estate assets, which are illiquid, and with trends in the real estate industry; defaults on or non-renewal of leases by tenants; any significant downturn in tenants’ businesses, including bankruptcy, lack of liquidity or lack of funding, and the impact labor disruptions or strikes, such as episodic strikes in the media industry, may have on our tenants’ businesses; our ability to re-lease property at or above current market rates; reduced demand for office space, including as a result of remote working and flexible working arrangements that allow work from remote locations other than an employer’s office premises; costs to comply with government regulations, including environmental remediation; the availability of cash for distribution and debt service, and exposure to risk of default under debt obligations; increases in interest rates and our ability to manage interest rate exposure; changes in interest rates and the availability of financing on attractive terms or at all, which may adversely impact our future interest expense and our ability to pursue development, redevelopment, and acquisition opportunities and refinance existing debt; a decline in real estate asset valuations, which may limit our ability to dispose of assets at attractive prices, or obtain or maintain debt financing, and which may result in write-offs or impairment charges; significant competition, which may decrease the occupancy and rental rates of properties; potential losses that may not be covered by insurance; the ability to successfully complete acquisitions and dispositions on announced terms; the ability to successfully operate acquired, developed, and redeveloped properties; the ability to successfully complete development and redevelopment projects on schedule and within budgeted amounts; delays or refusals in obtaining all necessary zoning, land use, and other required entitlements, governmental permits and authorizations for our development and redevelopment properties; increases in anticipated capital expenditures, tenant improvement, and/or leasing costs; defaults on leases for land on which some of our properties are located; adverse changes to, or enactment or implementations of, tax laws or other applicable laws, regulations, or legislation, as well as business and consumer reactions to such changes; risks associated with joint venture investments, including our lack of sole decision-making authority, our reliance on co-venturers’ financial condition and disputes between us and our co-venturers; environmental uncertainties and risks related to natural disasters; risks associated with climate change and our sustainability strategies, and our ability to achieve our sustainability goals; and our ability to maintain our status as a REIT. The factors included in this report are not exhaustive and additional factors could adversely affect our business and financial performance. For a discussion of additional factors that could materially adversely affect the Company’s and the Operating Partnership’s business and financial performance, see the discussion below, as well as in “Part I, Item 1A. Risk Factors” and “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s and the Operating Partnership’s annual report on Form 10-K
24
for the year ended December 31, 2025, and their respective other filings with the SEC. All forward-looking statements are based on currently available information and speak only as of the dates on which they are made. We assume no obligation to update any forward-looking statement that becomes untrue because of subsequent events, new information, or otherwise, except to the extent we are required to do so in connection with our ongoing requirements under federal securities laws.
Overview and Background
We are a self-administered REIT active in premier office, life science, and mixed-use property types in the United States. We own, manage, develop, and acquire primarily premier office and life science properties in the San Francisco Bay Area, Los Angeles, Seattle, San Diego, and Austin, which are markets we believe have long-term strategic advantages and strong barriers to entry. We own our interests in all of our real estate assets and conduct substantially all of our operations through the Operating Partnership, of which we owned an approximate 99.0% and 99.1% common general partnership interest as of September 30, 2026 and December 31, 2025, respectively. All of our properties and development and redevelopment projects are 100% owned, excluding four office properties and one future development project owned by the Consolidated Property Partnerships. As of September 30, 2026, all of our properties are held in fee except for the fourteen office buildings that are held subject to long-term ground leases.
Stabilized Portfolio Information
As of September 30, 2026, our stabilized portfolio was comprised of 123 office and life science properties encompassing an aggregate of approximately 17.1 million rentable square feet. This portfolio includes all properties except properties under development and redevelopment or in the tenant improvement phase, undeveloped land, and real estate assets held for sale, if any. Our stabilized portfolio also excludes our future development pipeline, which, as of September 30, 2026, was comprised of nine potential development sites.
The following table reconciles the changes in the rentable square feet in our stabilized portfolio of operating properties from December 31, 2025 to September 30, 2026, inclusive of four properties owned by the Consolidated Property Partnerships and excluding our residential portfolio:
| Number of Buildings | Rentable Square Feet | ||||||||||
Total as of December 31, 2025 | 121 | 16,292,164 | |||||||||
Completed development properties placed in-service | 3 | 871,738 | |||||||||
Dispositions (1) | (1) | (39,192) | |||||||||
Remeasurements (2) | — | 22,354 | |||||||||
Total as of September 30, 2026 | 123 | 17,147,064 | |||||||||
________________________
(1)Excludes Kilroy Sabre Springs, which was classified as held for sale as of December 31, 2025 and not included in the stabilized portfolio, and the two residential properties disposed of in April 2026, measured in units.
(2)Represents a recalculation of a property's rentable square footage using updated industry measurement standards.
Occupancy Information
The following table sets forth certain information regarding our stabilized portfolio, excluding our residential portfolio, as of the end of the period presented:
| September 30, 2026 | June 30, 2026 | December 31, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Region | Number of Buildings | Rentable Square Feet | Occupancy | Number of Buildings | Rentable Square Feet | Occupancy | Number of Buildings | Rentable Square Feet | Occupancy | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| San Francisco Bay Area | 33 | 6,455,636 | 75.3 | % | 33 | 6,436,709 | 75.3 | % | 30 | 5,564,971 | 86.2 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
Los Angeles | 52 | 4,246,115 | 72.2 | % | 52 | 4,246,048 | 72.5 | % | 52 | 4,242,386 | 75.1 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
Seattle | 10 | 2,997,307 | 79.5 | % | 10 | 2,997,307 | 78.9 | % | 10 | 2,997,623 | 80.0 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
San Diego | 27 | 2,689,031 | 83.4 | % | 27 | 2,689,017 | 84.1 | % | 28 | 2,728,209 | 83.7 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Austin | 1 | 758,975 | 84.0 | % | 1 | 758,975 | 84.0 | % | 1 | 758,975 | 82.2 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | 123 | 17,147,064 | 76.9 | % | 123 | 17,128,056 | 77.0 | % | 121 | 16,292,164 | 81.6 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||
25
The following table sets forth the average occupancy of certain property groups within our stabilized portfolio for the periods presented:
Average Occupancy (1) | |||||||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
Stabilized Office & Life Science Portfolio (2) | 76.8 | % | 80.7 | % | 77.3 | % | 81.0 | % | |||||||||||||||
Same Property Portfolio (3) | 81.2 | % | 81.6 | % | 81.7 | % | 81.5 | % | |||||||||||||||
Residential Portfolio (4) | 94.8 | % | 93.2 | % | 95.1 | % | 94.1 | % | |||||||||||||||
________________________
(1)Occupancy percentages reported are calculated as the average of the daily ending occupancy percentages for the period presented. Represents economic occupancy for space where we have achieved revenue recognition for the associated lease agreements.
(2) Kilroy Oyster Point Phase 2 (“KOP 2”) stabilized during the three months ended March 31, 2026. Excluding KOP 2, the average stabilized portfolio occupancy was 80.5% and 81.1% for the three and nine months ended September 30, 2026.
(3) The same property portfolio includes all properties owned and included in the stabilized portfolio for two comparable reporting periods, i.e., owned and included in the stabilized portfolio as of January 1, 2025 and still owned and included in the stabilized portfolio as of September 30, 2026.
(4) Our 2026 residential portfolio consists of 608 residential units at our One Paseo mixed-use property in San Diego, California. Our 2025 residential portfolio consists of 200 residential units at our Columbia Square Living property and 193 residential units at our Jardine property in Hollywood California, and 608 residential units at our One Paseo mixed-use property in San Diego, California.
Significant Tenants
Refer to our 2025 Annual Report on Form 10-K for information about our 20 largest tenants. There have been no significant changes to the composition of the 20 largest tenants outside of the ordinary course of business during the nine months ended September 30, 2026.
26
Factors That May Influence Future Results of Operations
Leasing
Leasing Activity and Changes in Rental Rates
The amount of rental income generated by our properties depends principally on our ability to maintain current occupancy rates and to lease currently available space, including space at newly developed or redeveloped properties and newly acquired properties. The amount of rental income we generate also depends on our ability to maintain or increase rental rates at our properties. Negative trends in one or more of these factors could adversely affect our rental income in future periods. The following tables set forth certain information regarding leasing activity during the three and nine months ended September 30, 2026:
Leases Executed (1)
| Quarter to Date | Number of Leases | Rentable Square Feet | Weighted Average Lease Term (in months) | TI / LC per Sq. Ft. (2) | TI / LC per Sq. Ft. / Year (2) | ||||||||||||||||||||||||||||||||||||||||||
| New | Renewal | New | Renewal | Total | |||||||||||||||||||||||||||||||||||||||||||
2nd Gen Leasing (3) | 19 | 14 | 335,401 | 343,139 | 678,540 | 99 | $ | 94.43 | $ | 11.48 | |||||||||||||||||||||||||||||||||||||
1st Gen / Major Repositioning / In-Process Development & Redevelopment Leasing (4) | 8 | — | 124,271 | — | 124,271 | 101 | $ | 283.72 | $ | 39.01 | |||||||||||||||||||||||||||||||||||||
| Total | 27 | 14 | 459,672 | 343,139 | 802,811 | ||||||||||||||||||||||||||||||||||||||||||
Year to Date | Number of Leases | Rentable Square Feet | Weighted Average Lease Term (in months) | TI / LC per Sq. Ft. (2) | TI / LC per Sq. Ft. / Year (2) | ||||||||||||||||||||||||||||||||||||||||||
| New | Renewal | New | Renewal | Total | |||||||||||||||||||||||||||||||||||||||||||
2nd Gen Leasing (3) | 57 | 38 | 699,845 | 522,145 | 1,221,990 | 81 | $ | 78.32 | $ | 11.08 | |||||||||||||||||||||||||||||||||||||
1st Gen / Major Repositioning / In-Process Development & Redevelopment Leasing (4) | 16 | — | 414,248 | — | 414,248 | 148 | $ | 300.54 | $ | 29.53 | |||||||||||||||||||||||||||||||||||||
| Total | 73 | 38 | 1,114,093 | 522,145 | 1,636,238 | ||||||||||||||||||||||||||||||||||||||||||
| Quarter to Date | Year to Date | |||||||||||||||||||||||||
| 2nd Gen Leasing Change in Rents | Changes in GAAP Rents (5) | Changes in Cash Rents (6) | Changes in GAAP Rents (5) | Changes in Cash Rents (6) | ||||||||||||||||||||||
| Leases Signed On Space Vacant Less Than or Equal to 12 Months | 37.9% | 13.9% | 32.8 | % | 12.6 | % | ||||||||||||||||||||
| All Leases Signed | 30.6% | 9.7% | 17.5 | % | 2.1 | % | ||||||||||||||||||||
Retention Rate Calculations | Quarter to Date | Year to Date | ||||||||||||
Retention Rate (7) | 78.3 | % | 45.0 | % | ||||||||||
Retention Rate, including subtenants (8) | 81.2 | % | 50.2 | % | ||||||||||
________________________
(1)Includes 100% of the Consolidated Property Partnerships. Excludes leases with a lease term of less than one year (i.e. short-term leases). During the three months ended September 30, 2026, the Company signed 11,880 square feet of new short-term leasing on vacant space. During the nine months ended September 30, 2026, the Company signed 122,169 square feet of short-term leases, comprised of 76,437 square feet of new leasing on vacant space and 45,732 square feet of renewal leasing.
(2)Includes tenant improvements and third-party leasing commissions and excludes tenant-funded tenant improvements and indirect leasing costs.
(3)Leasing at properties in the Stabilized Portfolio related to space that has been previously leased, excluding short-term leasing. Tenant improvement and leasing commission capital expenditures for projects classified as Major Repositioning are captured in 2nd Gen Capital Expenditures.
(4)New leasing activity on vacant space at recently completed Development and Redevelopment projects and new leasing new leasing activity at space that was vacant upon acquisition (“1st Gen”); space for which significant non-recurring capital expenditures are incurred to reposition and is expected to result in additional revenue generated when re-leased (“Major Repositioning”) that have been added to the Stabilized Portfolio; and space at our in-process Development and Redevelopment projects.
(5)Calculated as the change between the expiring GAAP rent and the new GAAP rent for the same space. When necessary, lease structures are modified (adjusted for net leases) for comparability. Space that was vacant when the property was acquired is excluded from these calculations.
(6)Calculated as the change between the expiring cash rent and the new cash rent for the same space. When necessary, lease structures are modified (adjusted for net leases) for comparability. Space that was vacant when the property was acquired is excluded from these calculations.
(7)Calculated as the percentage of square footage renewed by existing tenants divided by the square footage of space renewed by existing tenants and lease expirations during the period. Excludes square footage of short-term leases.
(8)Represents the retention rate, inclusive of leases with subtenants where the Company does not expect to experience downtime in occupancy between leases.
27
Lease Expirations (1)(2)
The following tables set forth certain information regarding our scheduled lease expirations for our stabilized portfolio, excluding our residential properties, by year and by region for the remainder of 2026 and in 2027:
| Year of Lease Expiration | Number of Expiring Leases | Total Square Feet | % of Total Leased Sq. Ft. | Annualized Base Rent (in thousands) (3) | % of Total Annualized Base Rent (3) | Annualized Base Rent per Sq. Ft. (3) | ||||||||||||||||||||||||||||||||
| Month-to-Month | 83 | 35,367 | N/A | N/A | N/A | N/A | ||||||||||||||||||||||||||||||||
| Remainder of 2026 | 22 | 240,343 | 1.8 | % | $ | 10,710 | 1.4 | % | $ | 44.56 | ||||||||||||||||||||||||||||
| 2027 | 67 | 984,628 | 7.6 | % | 36,146 | 4.7 | % | 36.71 | ||||||||||||||||||||||||||||||
| 2028 | 77 | 1,108,764 | 8.5 | % | 68,070 | 8.9 | % | 61.39 | ||||||||||||||||||||||||||||||
| 2029 | 70 | 1,523,523 | 11.7 | % | 80,152 | 10.4 | % | 52.61 | ||||||||||||||||||||||||||||||
| 2030 | 73 | 1,764,229 | 13.5 | % | 106,144 | 13.8 | % | 60.16 | ||||||||||||||||||||||||||||||
| Thereafter | 200 | 7,414,236 | 56.9 | % | 466,587 | 60.8 | % | 62.93 | ||||||||||||||||||||||||||||||
| Total | 509 | 13,035,723 | 100.0 | % | $ | 767,809 | 100.0 | % | $ | 58.90 | ||||||||||||||||||||||||||||
| Year | Region | Number of Expiring Leases | Total Square Feet | % of Total Leased Sq. Ft. | Annualized Base Rent (in thousands) (3) | % of Total Annualized Base Rent (3) | Annualized Base Rent per Sq. Ft. (3) | |||||||||||||||||||||||||||||||||||||
| 2026 | San Francisco Bay Area | 3 | 19,545 | 0.1 | % | $ | 1,197 | 0.2 | % | $ | 61.24 | |||||||||||||||||||||||||||||||||
Los Angeles | 13 | 106,052 | 0.9 | % | 3,729 | 0.5 | % | 35.16 | ||||||||||||||||||||||||||||||||||||
| Seattle | 4 | 109,332 | 0.8 | % | 5,464 | 0.7 | % | 49.98 | ||||||||||||||||||||||||||||||||||||
| San Diego | 2 | 5,414 | — | % | 320 | — | % | 59.11 | ||||||||||||||||||||||||||||||||||||
| Austin | — | — | — | % | — | — | % | — | ||||||||||||||||||||||||||||||||||||
| Total | 22 | 240,343 | 1.8 | % | $ | 10,710 | 1.4 | % | $ | 44.56 | ||||||||||||||||||||||||||||||||||
| 2027 | San Francisco Bay Area | 5 | 34,600 | 0.3 | % | $ | 1,347 | 0.2 | % | $ | 38.93 | |||||||||||||||||||||||||||||||||
Los Angeles | 46 | 794,446 | 6.1 | % | 27,453 | 3.6 | % | 34.56 | ||||||||||||||||||||||||||||||||||||
Seattle | 9 | 69,446 | 0.5 | % | 2,119 | 0.3 | % | 30.51 | ||||||||||||||||||||||||||||||||||||
San Diego | 7 | 86,136 | 0.7 | % | 5,227 | 0.6 | % | 60.68 | ||||||||||||||||||||||||||||||||||||
| Austin | — | — | — | % | — | — | % | — | ||||||||||||||||||||||||||||||||||||
| Total | 67 | 984,628 | 7.6 | % | $ | 36,146 | 4.7 | % | $ | 36.71 | ||||||||||||||||||||||||||||||||||
________________________
(1)Represents all in-place leases as of September 30, 2026, excluding intercompany leases.
(2)Includes 100% of annualized base rent of the Consolidated Property Partnerships.
(3)Represents annualized monthly contractual base rents from existing tenants in occupancy, including the impact of straight-lined rent escalations and the amortization of free rent periods and excluding the impact of the following: amortization of deferred revenue related to tenant-funded tenant improvements, amortization of above / below-market rents, amortization for lease incentives due under existing leases, and expense reimbursement revenue. Amounts represent percentage of total portfolio annualized contractual base rental revenue.
Adjusting for leases that have been backfilled or re-leased to a subtenant as of September 30, 2026 but not yet commenced, the remaining 2026, 2027, and 2028 expirations would be 153,468, 958,485, and 1,055,370 square feet, respectively.
Our rental rates and occupancy are impacted by general economic conditions, including the pace of regional economic growth and capital availability. Therefore, we cannot guarantee that leases will be renewed or that available space will be re-leased at rental rates equal to or above current rates.
Capital Recycling Program
Our capital recycling program plays a central role in reshaping our portfolio for long-term performance and cash flow durability. By disposing of select non-core or non-strategic assets, often in markets where growth prospects have moderated, as well as undeveloped land in our portfolio, we can redeploy capital into opportunities that can realize higher returns. Refer to “Liquidity and Capital Resources of the Operating Partnership” for further discussion of our capital recycling program.
28
Development and Redevelopment Programs
Stabilized Development Project
During the first quarter of the nine months ended September 30, 2026, we completed and added the following development project to the stabilized development portfolio:
•Kilroy Oyster Point (Phase 2), South San Francisco, California. In June 2021, we commenced construction on Phase 2 of this 39-acre life science campus situated on the waterfront in South San Francisco and progressed the property to the tenant improvement phase during the first quarter of 2025. The second phase encompassed 871,738 square feet of office and life science space across three buildings with a total estimated investment of $1.2 billion. We added the property to the stabilized portfolio in the first quarter of 2026 upon reaching one year since substantial completion. The project is 7% occupied and 49% leased.
Future Development Pipeline
As of September 30, 2026, our future development pipeline included the following projects:
| Future Development Pipeline | Location | Approx. Developable Square Feet / Residential Units (1) | Total Costs-to-Date as of 9/30/2026 (in millions) | |||||||||||||||||
| San Francisco Bay Area | ||||||||||||||||||||
| Flower Mart | San Francisco CBD | 2,300,000 | $ | 689.9 | ||||||||||||||||
| Kilroy Oyster Point - Phases 3 and 4 | South San Francisco | 875,000 - 1,000,000 | 253.4 | |||||||||||||||||
1900 Broadway (2) | Other Peninsula | 251,000 | 78.1 | |||||||||||||||||
| Los Angeles | ||||||||||||||||||||
1633 26th Street (3) | West Los Angeles | 190,000 | 16.8 | |||||||||||||||||
| Seattle | ||||||||||||||||||||
| SIXO | Lake Union / Denny Regrade | 925,000 and 650 units | 196.8 | |||||||||||||||||
| San Diego | ||||||||||||||||||||
Santa Fe Summit (3) | 56 Corridor | 600,000 - 650,000 | 118.3 | |||||||||||||||||
| 2045 Pacific Highway | Little Italy / Point Loma | 275,000 | 52.0 | |||||||||||||||||
Kilroy East Village (4) | East Village | 1,100 units | 63.1 | |||||||||||||||||
| Austin | ||||||||||||||||||||
| Stadium Tower | Stadium District / Domain | 493,000 | 75.7 | |||||||||||||||||
| Total Costs, net | $ | 1,544.1 | ||||||||||||||||||
| Environmental Liability Obligations and Asset Retirement Obligations | 73.8 | |||||||||||||||||||
| Total Costs | $ | 1,617.9 | ||||||||||||||||||
________________________
(1)Project scope, including the estimated developable square feet or number of residential units, could change materially from estimates provided due to one or more of the following: significant changes in the economy, market conditions, tenant requirements and demands, construction costs, new supply, regulatory and entitlement processes, or project design.
(2)Owned in a consolidated joint venture. Project is 58% pre-leased and is anticipated to commence construction in 2027, with delivery scheduled for 2030, at which time the Company’s ownership interest is expected to be 97%.
(3)Subject to signed purchase and sale agreements and non-refundable deposits as of the date of this filing. Both development sites are anticipated to close upon receipt of residential entitlements and permits, which is expected to occur beginning in phases in early 2027.
(4)Anticipated to close during the fourth quarter for an estimated sales price of $19.5 million. No impairment was recorded as of September 30, 2026 as the property did not meet held for sale criteria and was deemed recoverable based on a probability-weighted undiscounted future cash flow assessment.
Our land holdings have historically been intended for future development. As a result of current market conditions, we continue to evaluate the timing, scope, and economic viability of the development of these assets, as well as alternative strategies. Although our probability-weighted impairment analyses did not result in the recognition of an impairment loss as of September 30, 2026, a change in our development plans, intended use, or anticipated holding period, or changes in the expected economics of future development, could result in an impairment loss in a future period.
29
Fluctuations in our development activities, including a slowdown in development activities, could cause fluctuations in the average development asset balances qualifying for interest and other carrying costs and internal cost capitalization under GAAP in future periods, resulting in higher interest and other expenses. The following table sets forth our capitalized interest and other capitalized costs for our development and redevelopment properties and capital improvement projects in the stabilized portfolio:
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| (in thousands) | ||||||||||||||||||||||||||
| Capitalized Interest | ||||||||||||||||||||||||||
Average Qualifying Costs (1) | $ | 1,027,020 | $ | 1,974,224 | $ | 1,096,265 | $ | 1,918,482 | ||||||||||||||||||
| Capitalized Interest | $ | 11,867 | $ | 22,574 | $ | 37,490 | $ | 64,455 | ||||||||||||||||||
| Other Capitalized Costs | ||||||||||||||||||||||||||
Capitalized Internal Overhead Costs (2) | $ | 3,702 | $ | 4,682 | $ | 11,531 | $ | 13,123 | ||||||||||||||||||
Other Capitalized Development Costs (3) | $ | 2,437 | $ | 7,353 | $ | 7,181 | $ | 17,832 | ||||||||||||||||||
________________________
(1)The average qualifying costs for the nine months ended September 30, 2026 includes costs incurred for KOP 2 through stabilization in Q1 2026.
(2)Primarily represents compensation costs capitalized to construction and development and redevelopment projects.
(3)Represents incidental property operating and carry costs capitalized to development and redevelopment projects.
Inflation
The majority of the Company’s leases require tenants to reimburse the Company for the tenant’s proportionate share of, and/or increases in, real estate taxes and certain operating costs, which reduce the Company’s exposure to increases in operating costs resulting from inflation. The Company’s exposure to inflationary impacts is sensitive to fluctuations in the occupancy levels at its properties.
30
Results of Operations
Net Operating Income
Management internally evaluates the operating performance and financial results of our stabilized portfolio based on Net Operating Income. We define “Net Operating Income” as revenues less lease termination fees and consolidated operating expenses (property expenses, real estate taxes, and ground lease rent).
Net Operating Income is considered by management to be an important and appropriate supplemental performance measure to net income because we believe it helps both investors and management understand the core operations of our properties. Net Operating Income is an unlevered operating performance metric that allows for a useful comparison of the operating performance of individual assets or groups of assets. Because the Company’s Net Operating Income metrics exclude lease termination fees, leasing costs, general and administrative expenses, interest expense, depreciation and amortization, other income and expenses, impairment of real estate assets, and gains and losses, they provide performance measures that, when compared year over year, reflect the consolidated revenues and expenses directly associated with owning and operating commercial real estate and the impact to operations from trends in occupancy rates, rental rates, and operating costs, providing a perspective on operations not immediately apparent from net income. In addition, Net Operating Income is considered by many in the real estate industry to be a useful starting point for determining the value of a real estate asset or group of assets. Other real estate companies may use different methodologies for calculating Net Operating Income and, accordingly, our presentation of Net Operating Income may not be comparable to other real estate companies. Because of the exclusion of the items shown in the reconciliation below, Net Operating Income should only be used as a supplemental measure of our financial performance and not as an alternative to GAAP net income.
Management further evaluates Net Operating Income by evaluating the performance from the following property groups:
•Same Property Portfolio – includes the consolidated results of all properties that were owned and included in our stabilized portfolio for two comparable reporting periods, i.e., owned and included in our stabilized portfolio as of January 1, 2025 and still owned and included in the stabilized portfolio as of September 30, 2026, including our residential property in San Diego, California;
•Re/Development Properties – includes the results generated by certain of our in-process development and redevelopment projects, expenses for certain of our future development projects, and the results generated by the two stabilized redevelopment properties that were added to the stabilized portfolio in the third quarter of 2025 and the one development property added to the stabilized portfolio in the first quarter of 2026;
•Acquisition Properties – includes the results, from the date of acquisition through the periods presented, of the following:
◦One property acquired in the third quarter of 2025; and
◦One property, comprised of four buildings, acquired in the fourth quarter of 2025; and
•Disposition Properties – includes the results of the following:
◦One property disposed of in the second quarter of 2025;
◦One property, comprised of four buildings, disposed of in the third quarter of 2025;
◦One property disposed of in the fourth quarter of 2025;
◦Two properties, comprised of four buildings, disposed of in the first quarter of 2026; and
◦Two residential properties, totaling 393 residential units, disposed of in the second quarter of 2026.
The following table sets forth certain information regarding the property groups within our stabilized portfolio as of September 30, 2026:
| Group | # of Buildings | Rentable Square Feet | ||||||||||||
| Same Property Portfolio | 113 | 15,635,655 | ||||||||||||
Re/Development Properties (1) | 5 | 972,877 | ||||||||||||
| Acquisition Properties | 5 | 538,532 | ||||||||||||
Total Stabilized Portfolio (2) | 123 | 17,147,064 | ||||||||||||
________________________
(1)Excludes development projects in the tenant improvement phase, our in-process development projects, and future development projects.
(2)Excludes our residential property, measured in units.
31
Comparison of the Three Months Ended September 30, 2026 to the Three Months Ended September 30, 2025
The following table summarizes our Net Operating Income for our total portfolio:
| Three Months Ended September 30, | Dollar Change | Percentage Change | |||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| ($ in thousands) | |||||||||||||||||||||||
| Reconciliation of Net Income Available to Common Stockholders to Net Operating Income, as defined: | |||||||||||||||||||||||
| Net Income Available to Common Stockholders | $ | 15,506 | $ | 156,220 | $ | (140,714) | (90.1) | % | |||||||||||||||
| Net income attributable to noncontrolling common units of the Operating Partnership | 151 | 1,524 | (1,373) | (90.1) | % | ||||||||||||||||||
| Net income attributable to noncontrolling interests in consolidated property partnerships | 4,612 | 4,538 | 74 | 1.6 | % | ||||||||||||||||||
| Net income | $ | 20,269 | $ | 162,282 | $ | (142,013) | (87.5) | % | |||||||||||||||
| Lease termination fees | (315) | (309) | (6) | 1.9 | % | ||||||||||||||||||
| General and administrative expenses | 18,408 | 18,247 | 161 | 0.9 | % | ||||||||||||||||||
| Leasing costs | 2,980 | 2,610 | 370 | 14.2 | % | ||||||||||||||||||
| Depreciation and amortization | 93,165 | 87,487 | 5,678 | 6.5 | % | ||||||||||||||||||
| Interest income | (620) | (3,119) | 2,499 | (80.1) | % | ||||||||||||||||||
| Interest expense | 39,376 | 32,152 | 7,224 | 22.5 | % | ||||||||||||||||||
| Other expense | (83) | (91) | 8 | (8.8) | % | ||||||||||||||||||
| Gains on sales of depreciable operating properties | — | (110,484) | 110,484 | 100.0 | % | ||||||||||||||||||
| Net Operating Income | $ | 173,180 | $ | 188,775 | $ | (15,595) | (8.3) | % | |||||||||||||||
The following tables summarize our Net Operating Income for our total portfolio:
| Three Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Same Property | Re/ Develop- ment | Acquisi- tion | Disposi- tion | Total | Same Property | Re/ Develop- ment | Acquisi- tion | Disposi- tion | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Operating revenues: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Rental income | $ | 254,390 | $ | 1,869 | $ | 10,403 | $ | (227) | $ | 266,435 | $ | 252,566 | $ | 33 | $ | 1,052 | $ | 20,949 | $ | 274,600 | |||||||||||||||||||||||||||||||||||||||
| Other property income | 4,236 | 361 | 83 | 174 | 4,854 | 4,125 | 236 | — | 474 | 4,835 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Total | 258,626 | 2,230 | 10,486 | (53) | 271,289 | 256,691 | 269 | 1,052 | 21,423 | 279,435 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Property and related expenses: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property expenses | 58,619 | 3,028 | 3,201 | (209) | 64,639 | 55,020 | 345 | 369 | 6,030 | 61,764 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Real estate taxes | 25,296 | 3,977 | 1,149 | (169) | 30,253 | 23,011 | 720 | 154 | 1,993 | 25,878 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Ground leases | 3,217 | — | — | — | 3,217 | 3,018 | — | — | — | 3,018 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Total | 87,132 | 7,005 | 4,350 | (378) | 98,109 | 81,049 | 1,065 | 523 | 8,023 | 90,660 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Net Operating Income (Loss) | $ | 171,494 | $ | (4,775) | $ | 6,136 | $ | 325 | $ | 173,180 | $ | 175,642 | $ | (796) | $ | 529 | $ | 13,400 | $ | 188,775 | |||||||||||||||||||||||||||||||||||||||
32
Three Months Ended September 30, 2026 as compared to the Three Months Ended September 30, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Same Property | Re/Development | Acquisition | Disposition | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dollar Change | Percent Change | Dollar Change | Dollar Change | Dollar Change | Dollar Change | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ($ in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Operating revenues: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Rental income | $ | 1,824 | 0.7 | % | $ | 1,836 | $ | 9,351 | $ | (21,176) | $ | (8,165) | |||||||||||||||||||||||||||||||||||||||||||||||
| Other property income | 111 | 2.7 | % | 125 | 83 | (300) | 19 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | 1,935 | 0.8 | % | 1,961 | 9,434 | (21,476) | (8,146) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property and related expenses: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property expenses | 3,599 | 6.5 | % | 2,683 | 2,832 | (6,239) | 2,875 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Real estate taxes | 2,285 | 9.9 | % | 3,257 | 995 | (2,162) | 4,375 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Ground leases | 199 | 6.6 | % | — | — | — | 199 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | 6,083 | 7.5 | % | 5,940 | 3,827 | (8,401) | 7,449 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net Operating Income Impact | $ | (4,148) | (2.4) | % | $ | (3,979) | $ | 5,607 | $ | (13,075) | $ | (15,595) | |||||||||||||||||||||||||||||||||||||||||||||||
Net Operating Income decreased $15.6 million for the three months ended September 30, 2026 as compared to the three months ended September 30, 2025, primarily resulting from:
•A decrease of $13.1 million attributable to the Disposition Properties;
•A decrease of $4.0 million attributable to the Re/Development Properties, primarily due to one development property with limited occupancy added to the stabilized portfolio in the first quarter of 2026, which resulted in the cessation of cost capitalization, and a decrease in recoverable operating expenses due to low occupancy; and
•A decrease of $4.1 million attributable to the Same Property Portfolio, which was driven by the following activity:
•An increase in total operating revenues of $1.9 million, primarily due to a(n):
•$0.9 million increase in revenues primarily due to parking and residential income;
•$0.9 million increase in reimbursement revenues, primarily due to an increase in recoverable operating expenses;
•$0.6 million increase in revenue primarily due to lower bad debt expense in 2026; and
•$0.5 million increase in settlement income.
Partially offset by:
•$0.9 million decrease in base rent attributable to $0.7 million from lower average occupancy levels and $0.2 million from lower rental rates; and
•$0.1 million decrease in amortization of deferred income and tenant funded improvements, mainly resulting from tenant move outs.
•An increase in property and related expenses of $6.1 million, primarily due to a(n):
•Approximately $3.6 million increase in property expenses, primarily due to an increase in utilities, contract services and security;
•$2.3 million increase in real estate taxes, primarily due to $1.6 million of lower property tax refunds received in 2026 and a $0.6 million increase resulting from higher assessed property values; and
•$0.2 million increase in ground lease expense.
33
Partially offset by:
•An increase of $5.6 million attributable to the Acquisition Properties.
General and Administrative Expenses
General and administrative expenses remained generally consistent for the three months ended September 30, 2026 as compared to the three months ended September 30, 2025.
Leasing Costs
Leasing costs increased $0.4 million for the three months ended September 30, 2026 as compared to the three months ended September 30, 2025, primarily due to an increase in leasing deal costs and leasing overhead during the three months ended September 30, 2026.
Depreciation and Amortization
Depreciation and amortization increased $5.7 million for the three months ended September 30, 2026 as compared to the three months ended September 30, 2025, primarily due to the following:
•An increase of $5.5 million attributable to a full quarter of expense related to the Acquisition Properties;
•An increase of $5.8 million attributable to the Re/Development Properties, primarily due to the one property added to the stabilized portfolio in the first quarter of 2026; and
•An increase of $1.1 million attributable to the Same Property Portfolio, primarily due to revenue recognition commencing for three tenants in the Seattle region in the third quarter of 2025, fourth quarter of 2025, and first quarter of 2026.
Partially offset by:
•A decrease of $6.7 million attributable to the Disposition Properties.
Interest Income
Interest income decreased $2.5 million for the three months ended September 30, 2026 as compared to the three months ended September 30, 2025, primarily due to lower average balances maintained in interest-bearing accounts.
34
Interest Expense
The following table sets forth our gross interest expense and capitalized interest:
| Three Months Ended September 30, | |||||||||||||||||||||||
| 2026 | 2025 | Dollar Change | Percentage Change | ||||||||||||||||||||
| ($ in thousands) | |||||||||||||||||||||||
| Gross interest expense | $ | 51,243 | $ | 54,726 | $ | (3,483) | (6.4) | % | |||||||||||||||
Capitalized interest | (11,867) | (22,574) | 10,707 | (47.4) | % | ||||||||||||||||||
| Interest expense | $ | 39,376 | $ | 32,152 | $ | 7,224 | 22.5 | % | |||||||||||||||
| Average Qualifying Costs | $ | 1,027,020 | $ | 1,974,224 | $ | (947,204) | (48.0) | % | |||||||||||||||
| Weighted Average Interest and Loan Fee Amortization Rate | 4.62 | % | 4.54 | % | 0.08 | % | |||||||||||||||||
Gross interest expense, before the effect of capitalized interest, decreased $3.5 million for the three months ended September 30, 2026 as compared to the three months ended September 30, 2025, primarily due to a decrease in the average outstanding debt balance for the three months ended September 30, 2026.
Capitalized interest decreased $10.7 million for the three months ended September 30, 2026 as compared to the three months ended September 30, 2025, primarily due to the stabilization of the one development property added to the stabilized portfolio during the first quarter of 2026, at which point we stopped capitalizing interest. Capitalized interest will vary based on the current status of active development or redevelopment projects and our future development pipeline. For additional information about the potential impact of inflation on our interest expense and construction costs, and the impact on our business, financial condition, results of operations, cash flows, liquidity, and ability to satisfy our debt service obligations, refer to “Part I, Item 1A. Risk Factors” in our annual report on Form 10-K for the year ended December 31, 2025.
Net Income Attributable to Noncontrolling Interests in Consolidated Property Partnerships
Net income attributable to noncontrolling interests in consolidated property partnerships remained generally consistent for the three months ended September 30, 2026 as compared to the three months ended September 30, 2025. The amounts reported for the three months ended September 30, 2026 and 2025 are comprised of the share of net income attributable to noncontrolling interests for 100 First LLC, 303 Second LLC, Redwood LLC, and 1900 Broadway LLC. See Note 1 “Organization, Ownership, and Basis of Presentation” to our consolidated financial statements included in this report for additional information.
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Comparison of the Nine Months Ended September 30, 2026 to the Nine Months Ended September 30, 2025
The following table summarizes our Net Operating Income for our total portfolio:
| Nine Months Ended September 30, | Dollar Change | Percentage Change | |||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| ($ in thousands) | |||||||||||||||||||||||
| Reconciliation of Net Income Available to Common Stockholders to Net Operating Income, as defined: | |||||||||||||||||||||||
| Net Income Available to Common Stockholders | $ | 16,144 | $ | 263,677 | $ | (247,533) | (93.9) | % | |||||||||||||||
| Net income attributable to noncontrolling common units of the Operating Partnership | 159 | 2,562 | (2,403) | (93.8) | % | ||||||||||||||||||
| Net income attributable to noncontrolling interests in consolidated property partnerships | 14,008 | 19,292 | (5,284) | (27.4) | % | ||||||||||||||||||
| Net income | $ | 30,311 | $ | 285,531 | $ | (255,220) | (89.4) | % | |||||||||||||||
| Lease termination fees | (1,077) | (11,569) | 10,492 | (90.7) | % | ||||||||||||||||||
| General and administrative expenses | 58,040 | 53,623 | 4,417 | 8.2 | % | ||||||||||||||||||
| Leasing costs | 8,804 | 7,760 | 1,044 | 13.5 | % | ||||||||||||||||||
| Depreciation and amortization | 281,069 | 262,231 | 18,838 | 7.2 | % | ||||||||||||||||||
| Interest income | (2,821) | (4,765) | 1,944 | (40.8) | % | ||||||||||||||||||
| Interest expense | 119,521 | 94,144 | 25,377 | 27.0 | % | ||||||||||||||||||
| Other income | (224) | (124) | (100) | 80.6 | % | ||||||||||||||||||
| Gains on sales of depreciable operating properties | (23,525) | (127,038) | 103,513 | (81.5) | % | ||||||||||||||||||
| Impairment of real estate assets | 61,778 | — | 61,778 | 100.0 | % | ||||||||||||||||||
| Net Operating Income | $ | 531,876 | $ | 559,793 | $ | (27,917) | (5.0) | % | |||||||||||||||
The following tables summarize our Net Operating Income for our total portfolio:
| Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Same Property | Re/Develop- ment | Acquisi- tion | Disposi- tion | Total | Same Property | Re/Develop- ment | Acquisi- tion | Disposi- tion | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Operating revenues: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Rental income | $ | 757,265 | $ | 3,868 | $ | 30,376 | $ | 7,815 | $ | 799,324 | $ | 747,545 | $ | 296 | $ | 1,052 | $ | 65,762 | $ | 814,655 | |||||||||||||||||||||||||||||||||||||||
| Other property income | 11,834 | 1,024 | 324 | 445 | 13,627 | 12,058 | 676 | — | 1,522 | 14,256 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Total | 769,099 | 4,892 | 30,700 | 8,260 | 812,951 | 759,603 | 972 | 1,052 | 67,284 | 828,911 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Property and related expenses: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property expenses | 164,731 | 7,470 | 8,726 | 3,129 | 184,056 | 158,824 | 1,075 | 369 | 18,785 | 179,053 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Real estate taxes | 71,774 | 10,527 | 3,671 | 1,365 | 87,337 | 70,199 | 2,247 | 154 | 8,408 | 81,008 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Ground leases | 9,682 | — | — | — | 9,682 | 9,057 | — | — | — | 9,057 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Total | 246,187 | 17,997 | 12,397 | 4,494 | 281,075 | 238,080 | 3,322 | 523 | 27,193 | 269,118 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Net Operating Income (Loss) | $ | 522,912 | $ | (13,105) | $ | 18,303 | $ | 3,766 | $ | 531,876 | $ | 521,523 | $ | (2,350) | $ | 529 | $ | 40,091 | $ | 559,793 | |||||||||||||||||||||||||||||||||||||||
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Nine Months Ended September 30, 2026 as compared to the Nine Months Ended September 30, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Same Property | Re/Development | Acquisition | Disposition | Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dollar Change | Percent Change | Dollar Change | Dollar Change | Dollar Change | Dollar Change | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ($ in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Operating revenues: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Rental income | $ | 9,720 | 1.3 | % | $ | 3,572 | $ | 29,324 | $ | (57,947) | $ | (15,331) | |||||||||||||||||||||||||||||||||||||||||||||||
| Other property income | (224) | (1.9) | % | 348 | 324 | (1,077) | (629) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | 9,496 | 1.3 | % | 3,920 | 29,648 | (59,024) | (15,960) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property and related expenses: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property expenses | 5,907 | 3.7 | % | 6,395 | 8,357 | (15,656) | 5,003 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Real estate taxes | 1,575 | 2.2 | % | 8,280 | 3,517 | (7,043) | 6,329 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Ground leases | 625 | 6.9 | % | — | — | — | 625 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | 8,107 | 3.4 | % | 14,675 | 11,874 | (22,699) | 11,957 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net Operating Income Impact | $ | 1,389 | 0.3 | % | $ | (10,755) | $ | 17,774 | $ | (36,325) | $ | (27,917) | |||||||||||||||||||||||||||||||||||||||||||||||
Net Operating Income decreased $27.9 million for the nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025, primarily resulting from:
•A decrease of $36.3 million attributable to the Disposition Properties; and
•A decrease of $10.8 million attributable to the Re/Development Properties, primarily due to one development property with limited occupancy added to the stabilized portfolio in the first quarter of 2026, which resulted in the cessation of cost capitalization.
Partially offset by:
•An increase of $17.8 million attributable to the Acquisition Properties; and
•An increase of $1.4 million attributable to the Same Property Portfolio, which was driven by the following activity:
•An increase in total operating revenues of $9.5 million primarily due to a(n):
•$4.6 million increase in settlement income;
•$2.8 million increase in base rent attributable to $1.1 million from higher average occupancy levels and $1.7 million from higher rental rates;
•$2.2 million increase in revenues primarily due to parking and residential income;
•$1.3 million increase in reimbursement revenues, primarily due to an increase in recoverable operating expenses; and
•$0.6 million increase in revenue primarily due to lower bad debt expense in 2026.
Partially offset by:
•$2.0 million decrease in amortization of deferred income and tenant funded improvements, mainly resulting from tenant move outs.
•An increase in property and related expenses of $8.1 million primarily due to a(n):
•Approximately $5.9 million increase in property expenses, primarily due to an increase in utilities, contract services, janitorial and security;
•$1.6 million increase in real estate taxes, primarily due to a $1.3 million increase resulting from higher assessed property values and $0.3 million of lower property tax refunds received in 2026; and
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•$0.6 million increase in ground lease expense.
Lease Termination Fees
Lease termination fees decreased $10.5 million for the nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025, primarily due to a large lease termination fee recognized for one of the tenants in the San Francisco region in the second quarter of 2025.
General and Administrative Expenses
General and administrative expenses increased $4.4 million for the nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025, primarily due to a $2.5 million increase in software expense and corporate initiatives and a $1.9 million increase in compensation expenses and lower internal overhead capitalization.
Leasing Costs
Leasing costs increased $1.0 million for the nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025, primarily due to an increase in leasing deal costs and leasing overhead during the nine months ended September 30, 2026.
Depreciation and Amortization
Depreciation and amortization increased $18.8 million for the nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025, primarily due to the following:
•An increase of $20.2 million attributable to the Acquisition Properties;
•An increase of $16.0 million attributable to the Re/Development Properties, primarily due to the one property added to the stabilized portfolio in the first quarter of 2026; and
•An increase of $3.7 million attributable to the Same Property Portfolio, primarily due to revenue recognition commencing for numerous tenants in late 2025 and throughout 2026, partially offset by early lease terminations for two tenants in the San Francisco Bay area in 2025.
Partially offset by:
•A decrease of $21.1 million attributable to the Disposition Properties.
Interest Income
Interest income decreased $1.9 million for the nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025, primarily due to lower average balances maintained in interest-bearing accounts and lower rates.
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Interest Expense
The following table sets forth our gross interest expense and capitalized interest:
| Nine Months Ended September 30, | |||||||||||||||||||||||
| 2026 | 2025 | Dollar Change | Percentage Change | ||||||||||||||||||||
| ($ in thousands) | |||||||||||||||||||||||
| Gross interest expense | $ | 157,011 | $ | 158,599 | $ | (1,588) | (1.0) | % | |||||||||||||||
| Capitalized interest | (37,490) | (64,455) | 26,965 | (41.8) | % | ||||||||||||||||||
| Interest expense | $ | 119,521 | $ | 94,144 | $ | 25,377 | 27.0 | % | |||||||||||||||
| Average Qualifying Costs | $ | 1,096,265 | $ | 1,918,482 | $ | (822,217) | (42.9) | % | |||||||||||||||
| Weighted Average Interest and Loan Fee Amortization Rate | 4.60 | % | 4.49 | % | 0.11 | % | |||||||||||||||||
Gross interest expense, before the effect of capitalized interest, decreased $1.6 million for the nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025, primarily due to a decrease in the average outstanding debt balance for the nine months ended September 30, 2026.
Capitalized interest decreased $27.0 million for the nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025, primarily due to the stabilization of the one development property added to the stabilized portfolio during the first quarter of 2026, at which point we stopped capitalizing interest. Capitalized interest will vary based on the current status of active development or redevelopment projects and our future development pipeline. For additional information about the potential impact of inflation on our interest expense and construction costs, and the impact on our business, financial condition, results of operations, cash flows, liquidity, and ability to satisfy our debt service obligations, refer to “Part I, Item 1A. Risk Factors” in our annual report on Form 10-K for the year ended December 31, 2025.
Net Income Attributable to Noncontrolling Interests in Consolidated Property Partnerships
Net income attributable to noncontrolling interests in consolidated property partnerships decreased $5.3 million for the nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025, primarily due to lease termination fee income from one tenant in 2025. The amounts reported for the nine months ended September 30, 2026 and 2025 are comprised of the share of net income attributable to noncontrolling interests for 100 First LLC, 303 Second LLC, Redwood LLC and 1900 Broadway LLC. See Note 1 “Organization, Ownership, and Basis of Presentation” to our consolidated financial statements included in this report for additional information.
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Liquidity and Capital Resources of the Company
In this “Liquidity and Capital Resources of the Company” section, the term the “Company” refers only to Kilroy Realty Corporation on an unconsolidated basis and excludes the Operating Partnership and all other subsidiaries. As the sole general partner with control of the Operating Partnership, the Company consolidates the Operating Partnership for financial reporting purposes, and the Company does not have significant assets other than its investment in the Operating Partnership. Therefore, the assets and liabilities and the revenues and expenses of the Company and the Operating Partnership are substantially the same on their respective financial statements. The section entitled “Liquidity and Capital Resources of the Operating Partnership” should be read in conjunction with this section to understand the liquidity and capital resources of the Company on a consolidated basis and how the Company is operated as a whole.
Our liquidity, access to capital, and ability to execute our business strategy are subject to a variety of risks and uncertainties. Our ability to obtain financing, raise capital through dispositions or joint ventures, recycle capital through tax‑deferred transaction structures, fund development activity, or pursue acquisition opportunities will depend on a number of factors, many of which are outside of our control. These factors include conditions in the public and private capital markets, interest rate and inflation trends, the availability and cost of debt and equity financing, the demand for our properties, the timing and pricing of potential dispositions, the performance of our development projects, and broader macroeconomic and geopolitical conditions.
Distributions from the Operating Partnership are the Company’s primary source of capital. The Company believes the Operating Partnership’s sources of working capital, specifically its cash flows from operations, borrowings available under its unsecured revolving credit facility, and funds from its capital recycling program, including strategic ventures, are adequate for it to make its distribution payments to the Company to make dividend payments to its common stockholders for the next twelve months. The unavailability of capital could adversely affect the Operating Partnership’s ability to make distributions to the Company, which would in turn adversely affect the Company’s ability to pay cash dividends to its stockholders.
The Company is a well-known seasoned issuer and the Company and the Operating Partnership have an effective shelf registration statement that provides for the public offering and sale from time to time by the Company and the Operating Partnership of certain securities in unlimited amounts. The Company evaluates the capital markets on an ongoing basis for opportunities to raise capital, and, as circumstances warrant, the Company and the Operating Partnership may issue securities in one or more offerings at any time and from time to time on an opportunistic basis, depending upon, among other things, market conditions, available pricing, and capital needs. When the Company receives proceeds from the sales of its securities, it generally contributes the net proceeds from those sales to the Operating Partnership in exchange for corresponding preferred or common partnership units of the Operating Partnership.
Liquidity Highlights
As of September 30, 2026, the Company had approximately $1.4 billion in available liquidity, including $1.2 billion available under the revolving credit facility, $50.0 million available under the unsecured term loan facility, and $94.3 million of cash and cash equivalents. We believe that our available liquidity makes us well positioned to navigate any additional future uncertainties.
Distribution Requirements
The Company is required to distribute 90% of its taxable income (subject to certain adjustments and excluding net capital gains) on an annual basis to maintain qualification as a REIT for federal income tax purposes. As a result of these distribution requirements, the Operating Partnership cannot rely on retained earnings to fund its on-going operations to the same extent as other companies whose parent companies are not REITs. In addition, the Company may be required to use borrowings under the Operating Partnership’s revolving credit facility, if necessary, to meet REIT distribution requirements and maintain its REIT status. The Company may also need to raise capital to fund the Operating Partnership’s working capital needs, as well as potential developments of new or existing properties or acquisitions.
The Company intends to continue to make, but has not committed to making, regular quarterly cash distributions to common stockholders. All such distributions are at the discretion of the Board of Directors. The Company considers market factors and its performance in addition to REIT requirements in determining its distribution levels. Amounts accumulated for distribution to stockholders are invested primarily in interest-bearing accounts and short-term interest-bearing securities, which is consistent with the Company’s intention to maintain its qualification as a REIT. Such investments may include, for example,
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obligations of the Government National Mortgage Association, other governmental agency securities, certificates of deposit, and interest-bearing bank deposits.
On September 14, 2026, the Board of Directors declared a regular quarterly cash dividend of $0.54 per share of common stock. The regular quarterly cash dividend was payable to stockholders of record on September 30, 2026 and a corresponding cash distribution of $0.54 per Operating Partnership unit was payable to holders of the Operating Partnership’s common limited partnership interests of record on September 30, 2026, including those owned by the Company. The total cash quarterly dividends and distributions paid on October 14, 2026 were $63.4 million.
The covenants contained within certain of our unsecured debt obligations generally prohibit the Company from making distribution payments during an event of default except to the extent that such payments result in distributions sufficient to (i) maintain our qualification as a REIT for federal and state income tax purposes, and (ii) avoid the payment of federal or state income or excise tax.
Capitalization
As of September 30, 2026, our total debt as a percentage of total market capitalization was 53.0%, as shown in the following table:
| Shares / Units | Aggregate Principal Amount or $ Value Equivalent (in thousands) | % of Total Market Capitalization | |||||||||||||||
Debt: (1) | |||||||||||||||||
| Unsecured Line of Credit | $ | 40,000 | 0.5 | % | |||||||||||||
| Term Loan Facility due 2031 | 200,000 | 2.4 | % | ||||||||||||||
| Unsecured Senior Notes Series A & B due 2027 & 2029 | 250,000 | 3.0 | % | ||||||||||||||
| Unsecured Senior Notes due 2031 | 350,000 | 4.2 | % | ||||||||||||||
Unsecured Senior Notes due 2028 (2) | 400,000 | 4.8 | % | ||||||||||||||
| Unsecured Senior Notes due 2029 | 400,000 | 4.8 | % | ||||||||||||||
| Unsecured Senior Notes due 2030 | 500,000 | 6.0 | % | ||||||||||||||
Unsecured Senior Notes due 2032 (2) | 425,000 | 5.1 | % | ||||||||||||||
Unsecured Senior Notes due 2033 (2) | 450,000 | 5.4 | % | ||||||||||||||
| Unsecured Senior Notes due 2035 | 400,000 | 4.8 | % | ||||||||||||||
| Unsecured Senior Notes due 2036 | 400,000 | 4.8 | % | ||||||||||||||
| Secured debt | 595,595 | 7.2 | % | ||||||||||||||
| Total debt | $ | 4,410,595 | 53.0 | % | |||||||||||||
Equity and Noncontrolling Interests in the Operating Partnership: (3) | |||||||||||||||||
Common limited partnership units outstanding (4) | 1,133,562 | $ | 37,714 | 0.5 | % | ||||||||||||
| Shares of common stock outstanding | 116,308,988 | 3,869,600 | 46.5 | % | |||||||||||||
| Total Equity and Noncontrolling Interests in the Operating Partnership | $ | 3,907,314 | 47.0 | % | |||||||||||||
| Total Market Capitalization | $ | 8,317,909 | 100.0 | % | |||||||||||||
(1) Represents gross aggregate principal amount due at maturity before the effect of the following at September 30, 2026: $23.7 million of unamortized deferred financing costs for the unsecured term loan facility, unsecured senior notes, and secured debt and $9.9 million of unamortized discounts for the unsecured senior notes.
(2) Green bond.
(3) Value based on closing price per share of our common stock of $33.27, as of September 30, 2026.
(4) Includes common units of the Operating Partnership not owned by the Company. Excludes noncontrolling interests in consolidated property partnerships.
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Liquidity and Capital Resources of the Operating Partnership
In this “Liquidity and Capital Resources of the Operating Partnership” section, the terms “we,” “our,” and “us” refer to the Operating Partnership or the Operating Partnership and the Company together, as the context requires.
General
Our primary liquidity sources and uses are as follows:
Liquidity Sources
•Net cash flows from operations;
•Proceeds from our capital recycling program, including the disposition of assets and the formation of strategic ventures;
•Proceeds from additional secured or unsecured debt financings;
•Borrowings under the Operating Partnership’s unsecured revolving credit facility; and
•Proceeds from equity or preferred equity securities.
Liquidity Uses
•Debt service and principal payments, including debt maturities, debt repurchases, and redemptions;
•Capital expenditures, tenant improvements, and leasing costs;
•Development and redevelopment costs;
•Operating property or undeveloped land acquisitions;
•Distributions to common security holders; and
•Repurchases and redemptions of outstanding common stock of the Company.
General Strategy
Our general strategy is to maintain a conservative balance sheet with a strong credit profile and to maintain a capital structure that allows for financial flexibility and diversification of capital resources. We manage our capital structure to reflect a long-term investment approach and utilize multiple sources of capital to meet our long-term capital requirements. We believe that our current projected liquidity requirements for the next twelve-month period, as set forth above under the caption “—Liquidity Uses,” will be satisfied using a combination of the liquidity sources listed above, although there can be no assurance in this regard. We believe our disciplined capital structure and staggered debt maturities provide us with financial flexibility and enhance our ability to obtain additional sources of liquidity if necessary, and, therefore, we are well-positioned to refinance or repay maturing debt and to pursue our strategy of seeking attractive acquisition opportunities, which we may finance, as necessary, with future public and private issuances of debt and equity securities, although there can be no assurance in this regard.
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Liquidity Sources
Unsecured Revolving Credit and Term Loan Facilities
In June 2026, the Operating Partnership amended and restated the terms of its unsecured revolving credit facility. The amendment and restatement expanded the borrowing capacity to $1.25 billion and extended the maturity date to July 31, 2030.
The following table summarizes the balance and terms of our unsecured revolving credit facility:
| Unsecured Revolving Credit Facility | |||||||||||
| September 30, 2026 | December 31, 2025 | ||||||||||
| ($ in thousands) | |||||||||||
| Outstanding borrowings | $ | 40,000 | $ | — | |||||||
Remaining borrowing capacity (1) | 1,210,000 | 1,100,000 | |||||||||
Total borrowing capacity (1) | $ | 1,250,000 | $ | 1,100,000 | |||||||
Interest rate (2) | 4.90 | % | 5.07 | % | |||||||
Annual facility fee (3) | 0.25% | ||||||||||
Unamortized deferred financing costs (3) | $ | 17,427 | $ | 9,150 | |||||||
Maturity date (4) | July 31, 2030 | July 31, 2028 | |||||||||
________________________
(1)We may elect to borrow, subject to bank approval and obtaining commitments for any additional borrowing capacity, up to an additional $450.0 million and $500.0 million as of September 30, 2026 and December 31, 2025, respectively, under an accordion feature pursuant to the terms of the unsecured revolving credit facility. At December 31, 2025, remaining and total borrowing capacity are further reduced by the amount of our outstanding letters of credit, which totals approximately $5.2 million.
(2)Our unsecured revolving credit facility interest rate was calculated using the Secured Overnight Financing Rate (“SOFR”) and a margin of 1.000% based on our credit rating as of September 30, 2026, and using SOFR plus a SOFR adjustment of 0.10% (together “Adjusted SOFR”) and a margin of 1.100% based on our credit rating as of December 31, 2025.
(3)Our annual facility fee is paid on a quarterly basis and is calculated based on total borrowing capacity. In addition to the facility fee, we incurred debt origination and legal costs in connection with the amendment and restatement of the unsecured revolving credit facility, which are included in Prepaid expenses and other assets, net on our consolidated balance sheets, and will continue to be amortized through the amended maturity date.
(4)The maturity date may be extended by two six-month periods, at the Operating Partnership’s election.
The Operating Partnership intends to borrow under the unsecured revolving credit facility from time to time for general corporate purposes, including to finance development and redevelopment expenditures, to fund potential acquisitions, to repay long-term debt, and to supplement cash balances in response to market conditions.
In connection with amending and restating the revolving credit facility, the Operating Partnership amended and restated the unsecured term loan facility, expanding the borrowing capacity to $250.0 million, and extending the maturity date to July 31, 2031. Of the $250.0 million, $50.0 million represents additional delayed draw term loan commitments available to be drawn through June 11, 2027.
The following table summarizes the balance and terms of our Term Loan Facility:
| Term Loan Facility | |||||||||||
| September 30, 2026 | December 31, 2025 | ||||||||||
| ($ in thousands) | |||||||||||
Outstanding borrowings (1) | $ | 200,000 | $ | 200,000 | |||||||
| Remaining borrowing capacity | 50,000 | — | |||||||||
| Total borrowing capacity | $ | 250,000 | $ | 200,000 | |||||||
Interest rate (2) | 5.05 | % | 5.02 | % | |||||||
Unamortized deferred financing costs (3) | $ | 2,700 | $ | 277 | |||||||
Maturity date (4) | July 31, 2031 | October 3, 2026 | |||||||||
(1)As of September 30, 2026, we could elect to borrow, subject to bank approval and obtaining commitments for any additional borrowing capacity, up to an additional $150.0 million under an accordion feature pursuant to the terms of the Term Loan Facility. As of December 31, 2025, we could elect to borrow, subject to bank approval and obtaining commitments for any additional borrowing capacity, up to an additional $130.0 million under an accordion feature pursuant to the terms of the previous Term Loan Facility.
(2)Our Term Loan Facility interest rate was calculated using SOFR and a margin of 1.150% based on our credit rating as of September 30, 2026, and using Adjusted SOFR and a margin of 1.200% based on our credit rating as of December 31, 2025.
(3)We incurred debt origination and legal costs in connection with the amendment and restatement of the Term Loan Facility in June 2026, which will continue to be amortized through the maturity date of the Term Loan Facility. Approximately $0.5 million of these costs related to the delayed draw term loan commitments available are included in Prepaid expenses and other assets, net on our consolidated balance sheets, and will continue to be amortized through the amended maturity date.
(4)There are no extension options available under the terms of the amended and restated Term Loan Facility. As of December 31, 2025, one 12-month extension option was available.
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Capital Recycling Program
As discussed in the section “Factors That May Influence Future Results of Operations - Capital Recycling Program,” we continuously evaluate opportunities for the potential disposition of non-core properties and undeveloped land in our portfolio, or the formation of strategic ventures, with the intent of using the proceeds generated to acquire new operating and development properties, finance development and redevelopment expenditures, repay long-term debt, and for other general corporate purposes.
In connection with our capital recycling strategy, during the nine months ended September 30, 2026, we completed the sale of four operating properties to unaffiliated third parties for gross proceeds totaling approximately $347.5 million. The timing of any potential future disposition or strategic venture transactions will depend on market conditions and other factors, including, but not limited to, our capital needs, the availability of financing for potential buyers (which has been and may continue to be constrained due to current economic and market conditions), and our ability to absorb or defer some or all of the taxable gains on the sales.
Shelf Registration Statement
The Company and the Operating Partnership have an effective shelf registration statement that provides for the public offering and sale from time to time by the Company and the Operating Partnership of certain securities in unlimited amounts. The Company evaluates the capital markets on an ongoing basis for opportunities to raise capital, and, as circumstances warrant, the Company and the Operating Partnership may issue securities in one or more offerings at any time and from time to time on an opportunistic basis, depending upon, among other things, market conditions, available pricing, and capital needs. When the Company receives proceeds from the sales of its preferred or common stock, it generally contributes the net proceeds from those sales to the Operating Partnership in exchange for corresponding preferred or common partnership units of the Operating Partnership. The Operating Partnership may use these proceeds and proceeds from the sale of its debt securities to repay debt, including borrowings under its unsecured revolving credit facility and unsecured term loan facility, to develop new or redevelop existing properties, to make acquisitions of properties or portfolios of properties, or for general corporate purposes.
At-The-Market Stock Offering Program
Under the 2024 ATM Program, which commenced in March 2024, we may offer and sell shares of the Company’s common stock having an aggregate gross sales price of up to $500.0 million from time to time in “at-the-market” offerings. In connection with the 2024 ATM Program, the Company may also, at its discretion, enter into forward equity sale agreements. The use of forward equity sale agreements allows the Company to fix a share price on the sale of shares of our common stock at the time an agreement is executed but defer settling the forward equity sale agreements and receiving the proceeds from the sale of shares until a later date. The Company did not have any outstanding forward equity sale agreements to be settled at September 30, 2026. Since commencement of the 2024 ATM Program, we have not completed any sales of common stock.
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Liquidity Uses
Unsecured Debt
Repayment of $200.0 million and $50.0 million Unsecured Senior Notes due 2026
During 2026, the Company repaid an aggregate $250.0 million of unsecured private placement senior notes at par. In April 2026, the Company repaid the outstanding $50.0 million of 4.300% Private Placement Senior Notes, Series A, which were scheduled to mature in July 2026. In July 2026, the Operating Partnership repaid the outstanding $200.0 million of 4.350% Private Placement Senior Notes, Series B, which were scheduled to mature in October 2026.
Contractual Obligations
Refer to our 2025 Annual Report on Form 10-K for a discussion of our contractual obligations. There have been no material changes outside of the ordinary course of business to these contractual obligations during the nine months ended September 30, 2026, with the exception of the additional development commitments for 1900 Broadway.
Other Liquidity Uses
Potential Future Leasing Costs and Capital Improvements
The amounts we incur for tenant improvements and leasing costs depend on leasing activity in each period. Tenant improvements and leasing costs generally fluctuate in any given period depending on factors such as the type and condition of the property, the term of the lease, the type of the lease, the involvement of external leasing agents, and overall market conditions, including the level of inflation. Capital expenditures may fluctuate in any given period subject to the nature, extent, and timing of improvements required to maintain our properties and may be impacted by inflationary pressures on the cost of construction materials.
Development
We believe we may spend between $25.0 million to $75.0 million on development projects throughout the remainder of 2026. The ultimate timing of these expenditures may fluctuate given construction progress and leasing status of the projects, or as a result of events outside our control, such as delays or increased costs as a result of heightened inflation and market conditions. We expect that any material additional development activities will be funded with borrowings under the unsecured revolving credit facility, the public or private issuance of debt or equity securities, the disposition of assets under our capital recycling program, or strategic venture opportunities. We cannot provide assurance that development projects will be completed on the terms, for the amounts, or on the timelines currently contemplated, or at all.
Potential Future Acquisitions
As discussed in the section “—Factors That May Influence Future Results of Operations - Capital Recycling Program,” we continue to evaluate strategic opportunities and remain a disciplined buyer of core, value-add, and strategic operating properties and land, dependent on market conditions and business cycles, among other factors. We focus on growth opportunities primarily in markets populated by knowledge and creative-based tenants in a variety of industries, including technology, media, healthcare, life sciences, and professional services. We expect that any material acquisitions will be funded with borrowings under the unsecured revolving credit facility, the public or private issuance of debt or equity securities, the disposition of assets under our capital recycling program, the formation of strategic ventures, or through the assumption of existing debt, although there can be no assurance in this regard.
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Debt Composition
The composition of the Operating Partnership’s aggregate debt balances between secured and unsecured and fixed-rate and variable-rate debt was as follows:
Percentage of Total Debt (1) (2) | Weighted Average Interest Rate (1) (2) | ||||||||||||||||||||||
| September 30, 2026 | December 31, 2025 | September 30, 2026 | December 31, 2025 | ||||||||||||||||||||
| Secured vs. unsecured: | |||||||||||||||||||||||
| Unsecured | 86.5 | % | 87.0 | % | 4.1 | % | 4.1 | % | |||||||||||||||
| Secured | 13.5 | % | 13.0 | % | 5.2 | % | 5.1 | % | |||||||||||||||
| Variable-rate vs. fixed-rate: | |||||||||||||||||||||||
| Variable-rate | 5.4 | % | 4.3 | % | 5.0 | % | 5.0 | % | |||||||||||||||
| Fixed-rate | 94.6 | % | 95.7 | % | 4.2 | % | 4.2 | % | |||||||||||||||
| Stated rate | 4.3 | % | 4.3 | % | |||||||||||||||||||
Effective rate (3) | 4.6 | % | 4.6 | % | |||||||||||||||||||
________________________
(1) As of the end of the period presented.
(2) As of December 31, 2025, there was no outstanding balance on the unsecured revolving credit facility.
(3) Includes the impact of an unused facility fee, amortization of deferred financing costs, and amortization of discounts.
Share Repurchase Program
Under our current share repurchase program, which commenced in February 2024 (the “Share Repurchase Program”), we are authorized to repurchase shares of the Company’s common stock having an aggregate gross purchase price of up to $500.0 million. Under the Share Repurchase Program, repurchases may be made from time to time using a variety of methods, which may include open market purchases and privately negotiated transactions. The specific timing, price, and size of purchases will depend on prevailing stock prices, general economic and market conditions, and other considerations. The Share Repurchase Program does not have a termination date and repurchases may be discontinued at any time. We did not repurchase any shares of common stock during the three months ended September 30, 2026. During the nine months ended September 30, 2026, we repurchased 2,357,739 shares of common stock at a weighted average price of $30.80 per common share for an aggregate purchase price of $72.7 million. The remaining repurchase capacity as of September 30, 2026 was $427.3 million.
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Factors That May Influence Future Sources of Capital and Liquidity of the Company and the Operating Partnership
We continue to evaluate sources of financing for our business activities, including borrowings under the unsecured revolving credit facility, the unsecured term loan facility, issuance of public and private equity securities, unsecured debt and fixed-rate secured mortgage financing, proceeds from the disposition of selective assets through our capital recycling program, and the formation of strategic ventures. However, our ability to obtain new financing or refinance existing borrowings on favorable terms could be impacted by various factors, including the state of the macroeconomy, the state of the credit and equity markets, significant tenant defaults, a decline in the demand for commercial real estate properties, a decrease in market rental rates or market values of real estate assets in our submarkets, the amount of our future borrowings and uncertainty related to interest rates, inflation rates, geopolitical events, and other factors (refer to “Part I, Item 1A. Risk Factors” in our annual report on Form 10-K for the year ended December 31, 2025 for additional information). These events could result in the following:
•A decrease in our cash flows from operations, which could create further dependence on the unsecured revolving credit facility;
•An increase in the proportion of variable-rate debt, which could increase our sensitivity to interest rate fluctuations in the future; and
•A decrease in the value of our properties, which could have an adverse effect on the Operating Partnership’s ability to incur additional debt, refinance existing debt at competitive rates, or comply with its existing debt obligations.
In addition to the factors noted above, the Operating Partnership’s credit ratings are subject to ongoing evaluation by credit rating agencies and may be changed or withdrawn by a rating agency in the future if, in its judgment, circumstances warrant.
Financial Covenants and Restrictions
The unsecured revolving credit facility, unsecured term loan facility, unsecured senior notes, and certain other secured debt arrangements contain covenants and restrictions requiring us to meet certain financial ratios and reporting requirements. The Operating Partnership was in compliance with all of its financial covenants as of September 30, 2026. Our current expectation is that the Operating Partnership will continue to meet the requirements of its financial covenants in both the short and long term. However, in the event of an economic slowdown or continued volatility in the credit markets, there is no certainty that the Operating Partnership will be able to continue to satisfy all the covenant requirements.
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Consolidated Historical Cash Flows Summary
The following summary discussion of our consolidated historical cash flows is based on the consolidated statements of cash flows in Item 1. “Financial Statements” and is not meant to be an all-inclusive discussion of the changes in our cash flows for the periods presented below. Changes in our cash flows include changes in cash and cash equivalents. Our historical cash flow activity is as follows:
| Nine Months Ended September 30, | |||||||||||||||||||||||
| 2026 | 2025 | Dollar Change | Percentage Change | ||||||||||||||||||||
| ($ in thousands) | |||||||||||||||||||||||
| Net cash provided by operating activities | $ | 385,050 | $ | 457,235 | $ | (72,185) | (15.8) | % | |||||||||||||||
| Net cash provided by (used in) investing activities | 48,939 | (10,919) | 59,858 | (548.2) | % | ||||||||||||||||||
| Net cash used in financing activities | (518,754) | (239,590) | (279,164) | 116.5 | % | ||||||||||||||||||
| Net (decrease) increase in cash and cash equivalents and restricted cash | $ | (84,765) | $ | 206,726 | $ | (291,491) | (141.0) | % | |||||||||||||||
Operating Activities
Our cash flows from operating activities depend on numerous factors, including the occupancy level of our portfolio, the rental rates achieved on our leases, the collectability of rent and recoveries from our tenants, the level of operating expenses, the impact of property acquisitions, completed development and redevelopment projects and related financing activities, and other general and administrative costs. See additional information under the caption “—Results of Operations.” Our net cash provided by operating activities decreased by $72.2 million, or 15.8%, for the nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025, primarily due to lower net cash operating income from properties not in the same property portfolio, decreased capitalized interest following the stabilization of a development property during the nine months ended September 30, 2026, and a lease termination fee received from a tenant in the San Francisco region during the nine months ended September 30, 2025.
Investing Activities
Our cash flows from investing activities are generally used to fund development and operating property acquisitions, expenditures for development and redevelopment projects, recurring and nonrecurring capital expenditures for our operating properties, and include net proceeds received from dispositions of real estate assets. We had net cash provided by investing activities of $48.9 million for the nine months ended September 30, 2026 as compared to net cash used in investing activities of $10.9 million for the nine months ended September 30, 2025, primarily due to higher net proceeds from capital recycling activity during the nine months ended September 30, 2026.
Financing Activities
Our cash flows from financing activities are principally impacted by our capital raising activities, debt repayments, share repurchases, and dividends and distributions paid to common stockholders and common unitholders. Our net cash used in financing activities increased by $279.2 million, or 116.5%, for the nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025, primarily due to the aggregate $250.0 million repayment of unsecured private placement senior notes, as well as the common stock repurchases made during the nine months ended September 30, 2026 under our current Share Repurchase Program.
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Critical Accounting Policies and Estimates
The preparation of financial statements in conformity with GAAP requires us to make estimates, assumptions, and judgments that affect the reported amounts of assets and liabilities, and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses for the reporting periods. We base our estimates on historical experience, current market conditions, and various other assumptions that are believed to be reasonable under the circumstances. Actual results could materially differ from these estimates.
In our Annual Report on Form 10-K for the year ended December 31, 2025, we identified certain critical accounting policies that affect certain of our more significant estimates and assumptions used in preparing our consolidated financial statements. We have not made any material changes to our critical accounting policies and estimates during the period covered by this report.
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Non-GAAP Supplemental Financial Measure: Funds From Operations (“FFO”)
We calculate FFO available to common stockholders and common unitholders in accordance with the 2018 Restated White Paper on FFO approved by the Board of Governors of Nareit. The White Paper defines FFO as net income or loss (calculated in accordance with GAAP), excluding depreciation and amortization related to real estate, gains and losses from the sale of certain real estate assets, gains and losses from change in control, and impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity. The reconciling items include amounts to adjust earnings from consolidated partially-owned entities and equity in earnings of unconsolidated affiliates to FFO. Our calculation of FFO includes the amortization of deferred revenue related to tenant-funded tenant improvements and excludes the depreciation of the related tenant improvement assets. We also add back net income attributable to noncontrolling common units of the Operating Partnership because we report FFO attributable to common stockholders and common unitholders.
We believe that FFO is a useful supplemental measure of our operating performance. The exclusion from FFO of gains and losses from the sale of operating real estate assets allows investors and analysts to readily identify the operating results of the assets that form the core of our activity and assists in comparing those operating results between periods. Also, because FFO is generally recognized as the industry standard for reporting the operations of REITs, it facilitates comparisons of operating performance to other REITs. However, other REITs may use different methodologies to calculate FFO, and accordingly, our FFO may not be comparable to all other REITs.
Implicit in historical cost accounting for real estate assets in accordance with GAAP is the assumption that the value of real estate assets diminishes predictably over time. Since real estate values have historically risen or fallen with market conditions, many industry investors and analysts have considered presentations of operating results for real estate companies using historical cost accounting alone to be insufficient. Because FFO excludes depreciation and amortization of real estate assets, we believe that FFO along with the required GAAP presentations provides a more complete measurement of our performance relative to our competitors and a more appropriate basis on which to make decisions involving operating, financing, and investing activities than the required GAAP presentations alone would provide.
FFO should not be viewed as an alternative measure of our operating performance since it does not reflect either depreciation and amortization costs or the level of capital expenditures and leasing costs necessary to maintain the operating performance of our properties, which are significant economic costs and could materially impact our results from operations.
The following table presents our FFO:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||
| Net income available to common stockholders | $ | 15,506 | $ | 156,220 | $ | 16,144 | $ | 263,677 | |||||||||||||||
| Adjustments: | |||||||||||||||||||||||
| Net income attributable to noncontrolling common units of the Operating Partnership | 151 | 1,524 | 159 | 2,562 | |||||||||||||||||||
| Net income attributable to noncontrolling interests in consolidated property partnerships | 4,612 | 4,538 | 14,008 | 19,292 | |||||||||||||||||||
| Depreciation and amortization of real estate assets | 91,737 | 86,080 | 276,753 | 258,058 | |||||||||||||||||||
| Gains on sales of depreciable operating properties | — | (110,484) | (23,525) | (127,038) | |||||||||||||||||||
| Impairment of real estate assets | — | — | 61,778 | — | |||||||||||||||||||
| Funds From Operations attributable to noncontrolling interests in consolidated property partnerships | (7,373) | (7,317) | (22,500) | (27,789) | |||||||||||||||||||
Funds From Operations (1) (2) | $ | 104,633 | $ | 130,561 | $ | 322,817 | $ | 388,762 | |||||||||||||||
(1) Reported amounts are attributable to common stockholders, common unitholders, and restricted stock unitholders.
(2) FFO available to common stockholders and unitholders includes amortization of deferred revenue related to tenant-funded tenant improvements of $3.4 million and $3.6 million for the three months ended September 30, 2026 and 2025, respectively, and $9.9 million and $11.1 million for the nine months ended September 30, 2026 and 2025, respectively.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Information about our market risk is disclosed in “Part II, Item 7A, Quantitative and Qualitative Disclosures About Market Risk” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 and is incorporated herein by reference. There have been no material changes for the nine months ended September 30, 2026, to the information provided in “Part II, Item 7A, Quantitative and Qualitative Disclosures About Market Risk” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.
ITEM 4. CONTROLS AND PROCEDURES
Kilroy Realty Corporation
The Company maintains disclosure controls and procedures (as defined in Rule 13a-15(e) or Rule 15d-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed in the Company’s reports under the Exchange Act is processed, recorded, summarized, and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
As required by SEC Rule 13a-15(b), the Company carried out an evaluation, under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the disclosure controls and procedures as of September 30, 2026, the end of the period covered by this report. Based on the foregoing, the Company’s Chief Executive Officer and Chief Financial Officer concluded, as of that time, the disclosure controls and procedures were effective at the reasonable assurance level.
There have been no changes that occurred during the period covered by this report in the Company’s internal control over financial reporting identified in connection with the evaluation referenced above that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
Kilroy Realty, L.P.
The Operating Partnership maintains disclosure controls and procedures (as defined in Rule 13a-15(e) or Rule 15d-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed in the Operating Partnership’s reports under the Exchange Act is processed, recorded, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer of its general partner, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
As required by SEC Rule 13a-15(b), the Operating Partnership carried out an evaluation, under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer of its general partner, of the effectiveness of the design and operation of the disclosure controls and procedures as of September 30, 2026, the end of the period covered by this report. Based on the foregoing, the Chief Executive Officer and Chief Financial Officer of its general partner concluded, as of that time, the disclosure controls and procedures were effective at the reasonable assurance level.
There have been no changes that occurred during the period covered by this report in the Operating Partnership’s internal control over financial reporting identified in connection with the evaluation referenced above that have materially affected, or are reasonably likely to materially affect, the Operating Partnership’s internal control over financial reporting.
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PART II – OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We and our properties are subject to routine litigation incidental to our business. These matters are generally covered by insurance. As of September 30, 2026, we are not a defendant in, and our properties are not subject to, any legal proceedings that we believe, if determined adversely to us, would have a material adverse effect upon our financial condition, results of operations or cash flows.
ITEM 1A. RISK FACTORS
There have been no material changes to the risk factors included in the Company’s and the Operating Partnership’s annual report on Form 10-K for the year ended December 31, 2025.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
(a) Recent Sales of Unregistered Securities: None.
(b) Use of Proceeds from Registered Securities: None.
(c) Purchases of Equity Securities by the Issuer and Affiliated Purchasers: None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
None.
ITEM 5. OTHER INFORMATION
(a).None.
(b).None.
(c).During the three months ended September 30, 2026, no director or officer of the Company adopted terminated
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ITEM 6. EXHIBITS
| Exhibit Number | Description | |||||||
| 3.(i)1 | ||||||||
| 3.(i)2 | ||||||||
| 3.(i)3 | ||||||||
| 3.(ii)1 | Ninth Amended and Restated Bylaws of Kilroy Realty Corporation (previously filed by Kilroy Realty Corporation as an exhibit on Form 8-K as filed with the Securities and Exchange Commission on June 4, 2024) | |||||||
| 3.(ii)2 | ||||||||
| 10.1*† | ||||||||
| 31.1* | ||||||||
| 31.2* | ||||||||
| 31.3* | ||||||||
| 31.4* | ||||||||
| 32.1* | ||||||||
| 32.2* | ||||||||
| 32.3* | ||||||||
| 32.4* | ||||||||
| 101.1 | The following Kilroy Realty Corporation and Kilroy Realty, L.P. financial information for the quarter ended September 30, 2026, formatted in inline XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets (unaudited), (ii) Consolidated Statements of Operations (unaudited), (iii) Consolidated Statements of Equity (unaudited), (iv) Consolidated Statements of Capital (unaudited), (v) Consolidated Statements of Cash Flows (unaudited) and (vi) Notes to the Consolidated Financial Statements (unaudited).(1) | |||||||
| 104.1* | Cover Page Interactive Data File - The cover page interactive data file does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document. | |||||||
_______________
| * | Filed herewith. | ||||
| † | Management contract or compensatory plan or arrangement. | ||||
| (1) | Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Exchange Act of 1934 and otherwise are not subject to liability under these sections. | ||||
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on October 23, 2026.
| KILROY REALTY CORPORATION | ||||||||
| By: | /s/ Angela M. Aman | |||||||
| Angela M. Aman Chief Executive Officer (Principal Executive Officer) | ||||||||
| By: | /s/ Eliott L. Trencher | |||||||
| Eliott L. Trencher Executive Vice President, Chief Investment Officer and Interim Chief Financial Officer and Treasurer (Principal Financial Officer) | ||||||||
| By: | /s/ Chandni Jalan | |||||||
| Chandni Jalan Senior Vice President, Chief Accounting Officer (Principal Accounting Officer) | ||||||||
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on October 23, 2026.
| KILROY REALTY, L.P. | ||||||||
| BY: KILROY REALTY CORPORATION | ||||||||
| Its general partner | ||||||||
| By: | /s/ Angela M. Aman | |||||||
| Angela M. Aman Chief Executive Officer (Principal Executive Officer) | ||||||||
| By: | /s/ Eliott L. Trencher | |||||||
| Eliott L. Trencher Executive Vice President, Chief Investment Officer and Interim Chief Financial Officer and Treasurer (Principal Financial Officer) | ||||||||
| By: | /s/ Chandni Jalan | |||||||
| Chandni Jalan Senior Vice President, Chief Accounting Officer (Principal Accounting Officer) | ||||||||
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Exhibit 10.1
EXECUTION VERSION
CONFIDENTIAL SEPARATION AGREEMENT AND RELEASE OF CLAIMS
This Confidential Separation Agreement and Release of Claims (this “Separation Agreement”) is entered into by and between, on the one hand, Jeffrey Kuehling (“you”) and, on the other hand, Kilroy Realty Corporation, a Maryland corporation (“KRC”), and Kilroy Realty, L.P., a Delaware limited partnership (“KRLP” and, together with KRC, “Kilroy”). KRC, KRLP, and you may be referred to herein jointly as “the Parties” or individually as “the Party.”
RECITALS
WHEREAS, KRLP has employed you as Executive Vice President, Chief Financial Officer and Treasurer pursuant to that certain Employment Agreement between you and Kilroy, dated July 30, 2024 (the “Employment Agreement”);
WHEREAS, Kilroy has decided to terminate your employment with KRLP, and any other position you may hold with KRLP and KRC (or either of them), effective as of August 11, 2026 (the “Separation Date”);
WHEREAS, Kilroy and you desire to establish an amicable arrangement for ending your employment relationship with KRLP to permit you to receive a separation payment, in exchange for a general release of claims; and
WHEREAS, you understand and acknowledge that you are waiving legal rights or claims under applicable state, federal, or local law by signing this Separation Agreement, and that you are freely and voluntarily entering into this Separation Agreement with a complete understanding of its terms and with the intent to be bound thereby.
NOW, THEREFORE, in consideration of the covenants, representations, warranties, terms, conditions, and releases set forth below, and for your receipt of the separation benefits described below, Kilroy and you agree as follows:
1SEPARATION FROM EMPLOYMENT
1.1The parties acknowledge and agree that, (a) on the Separation Date, Kilroy paid to you all salary, wages, and any and all other benefits and compensation that you earned through the Separation Date (to the extent not previously paid); and (b) following the Separation Date, except for the Separation Benefit (as defined below), you are not entitled to receive any further payments, benefits, or any other form of compensation from Kilroy. Without limiting the generality of the preceding sentence, you are not entitled to any bonus for the year in which the Separation Date occurred (except for the pro-rated bonus provided in Section 2.1.2) and you are not entitled to any additional equity award or other incentive from Kilroy. Except for any common stock of KRC that you may own outright, you acknowledge and agree that as of the Separation Date, you do not own and you have no right to receive, acquire, or possess any security, derivative security, or equity in KRC, KRLP, or either of their respective affiliated entities.
1.2Your employment with KRLP, and all other positions (as an officer, director, employee, member, manager and in any other capacity) you held with KRLP, KRC, or any of their respective affiliates, terminated as of the Separation Date. You agree that the Separation Date shall constitute the date of your “separation from service” from Kilroy (within the meaning of Internal Revenue Code Section 409A and the guidance promulgated thereunder).
1.3You and Kilroy hereby acknowledge and confirm that you have agreed to waive any notice of termination of your employment that would otherwise be required pursuant to Section
5.1 of the Employment Agreement and that the payments described in Section 2.1.4 hereof are provided to you in consideration for such waiver and in lieu of such notice.
1.4Except as expressly authorized by Kilroy in writing, on and after the Separation Date, you shall not represent or act, directly or indirectly, for or on behalf of, or otherwise as an agent of, or hold yourself out as an employee of, Kilroy or any one of the Kilroy Released Parties (as defined below in Section 4).
1.5By no later than ten (10) days after the Separation Date, you shall submit your final expense report detailing any outstanding business expenses incurred by you through the Separation Date, which will be reimbursed by Kilroy subject to and in accordance with its policy for reimbursing business expenses. No expenses shall be incurred by you on or after the Separation Date for or on behalf of Kilroy without express written authorization in advance.
1.6You shall direct any prospective employers to the Kilroy Human Resources Department, which will respond to any request for a reference by providing your dates of employment and last held position, unless written authorization is provided by you to disclose your most recent regular base salary, in which case such information may also be disclosed.
1.7You understand that your coverage under Kilroy’s group healthcare insurance plan shall cease on the last day of the month in which the Separation Date occurs, at which time you and your previously enrolled eligible dependents shall become eligible for continued healthcare coverage in accordance with the Consolidated Omnibus Budget Reconciliation Act (“COBRA”) commencing with the month following the month in which the Separation Date occurs, provided that you make a timely election for COBRA coverage and you pay directly the monthly COBRA premiums necessary to continue such coverage, all in accordance with the applicable enrollment and payment procedures in effect from time to time (currently, COBRA enrollment and payments are made through Igoe Administration Services). Accordingly and except as provided in Section 2.1.3, Kilroy shall have no further obligation to pay for or to reimburse you for the cost of medical insurance benefits for you or any other previously enrolled dependents.
1.8You have a fully vested benefit under the Kilroy Realty Corporation 401(k) Plan (the “401(k) Plan”). Your benefit under the 401(k) Plan will be paid in accordance with the terms of that plan.
1.9You were previously awarded restricted stock units (“RSUs”) by Kilroy pursuant to certain Restricted Stock Unit Agreements (each, an “RSU Agreement”). As of the Separation Date, you had a total of approximately (i) 11,456 unvested, time-based and non-deferred RSUs
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(the “Unvested Time-Based RSUs”) and (ii) 40,255 unvested, performance-based and non-deferred RSUs (the “Unvested Performance-Based RSUs” and together with the Unvested Time-Based RSUs, the “Unvested RSUs. Pursuant to the terms in the underlying RSU Agreements, the Unvested RSUs terminated as of the Separation Date and you have no further right with respect thereto or in respect thereof. The numbers of RSUs set forth above are approximate and include the crediting of dividend equivalents in accordance with the applicable award terms through August 11, 2026. In the event of any inconsistency or ambiguity between this Separation Agreement and the applicable RSU Agreement as to the payment of any RSU, the applicable RSU Agreement controls.
1.10You acknowledge and agree that (a) Kilroy has established an account Kilroy established at Shareworks by Morgan Stanley in your name (the “Shareworks Account”), (b) you will transfer all shares of your Kilroy common stock and cash amounts in the Shareworks Account to your personal brokerage and/or bank account as soon as possible, but by no later than November 30, 2026, and (c) Kilroy will remove your access to the Shareworks Account immediately following such date. Furthermore, in accordance with Kilroy’s Insider Trading Policy, you hereby acknowledge and agree not to buy, sell, or otherwise trade in any Kilroy securities while in possession of any material non-public information about Kilroy.
1.11Within five (5) days following the Separation Date, you agree to return to Kilroy, through coordination with its Human Resources Department, all Kilroy documents (and all copies thereof) and other Kilroy property which you have in your possession or control, including, but not limited to, Kilroy files, notes, drawings, records, plans, forecasts, reports, studies, analyses, proposals, agreements, financial information, research and development information, sales and marketing information, customer lists, prospect information, pipeline reports, sales reports, operational and personnel information, specifications, code, software, databases, computer-recorded information, tangible property and equipment (including, but not limited to, computers, facsimile machines, mobile telephones, servers), credit cards, entry cards, identification badges and keys, and any materials of any kind which contain or embody any proprietary or confidential information of KRC, KRLP, or any of their respective affiliates (and all reproductions thereof in whole or in part). You agree that you will make a diligent search to locate any such documents, property and information by the close of business on the Separation Date. If you have used any personally owned computer, server, cloud storage account, or e-mail system to receive, store, review, prepare, or transmit any Kilroy confidential or proprietary data, materials or information, within five (5) days after the Separation Date, you shall provide Kilroy with a computer-useable copy of such information and then permanently delete and expunge such Kilroy confidential or proprietary information from those systems. You also agree that you will provide Kilroy with a complete list of all computer, device, and website log-in passwords that you used for Kilroy work purposes. Your timely compliance with this paragraph is a condition precedent to your receipt of the Separation Benefit (as defined below in Section 2.1.1) provided under this Separation Agreement. You further acknowledge and agree that you must abide by the terms of your Non-Competition, Non-Solicitation and Non-Disclosure Agreement, dated July 30, 2024 (the “Confidentiality Agreement”), specifically including (but not limited to) the provisions therein regarding return of Kilroy property and documents, and the non-use and nondisclosure of Kilroy’s trade secrets and confidential information. The Confidentiality Agreement is incorporated into this Separation Agreement as if fully set forth herein.
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1.12For a period of two months following the Separation Date, in consideration for the payment described in Section 2.1.4, you agree to reasonably cooperate with Kilroy (without any consideration or compensation beyond that provided for in this Separation Agreement) regarding (a) the transition of your duties and responsibilities (or former duties and responsibilities, as the case may be), and (b) such other matters as Kilroy may from time to time reasonably request and as are within your skill, experience, or knowledge given your past service to Kilroy.
1.13As a limited and narrow exception to your obligation to return Kilroy property pursuant to Section 1.11, you may retain (a) any personnel or payroll records to which you are legally entitled; and (b) the mobile phone device and iPad Kilroy supplied to you, provided that (a) you promptly provide such device and iPad to Kilroy Information Technology (IT) so that all Kilroy-related information and material (or, as Kilroy Information Technology (IT) may determine, all information and material other than personal data and contact information) may be removed from such device, and (b) you cooperate with and as requested by Kilroy Information Technology (IT) in connection with the removal of such information and material (including, without limitation, by providing any applicable passwords and identifying any personal data or contact information on such device for retention).
2CONSIDERATION FOR YOUR RELEASES AND COVENANTS
2.1In consideration for the releases, covenants, promises, and obligations set forth in this Separation Agreement, Kilroy shall make the following payments and provide the following benefits to you under the terms and conditions set forth in this Section 2.1 below (the “Separation Benefit”), which payments or benefits Kilroy would not otherwise be obligated to make or provide to you and which constitute sufficient consideration for the releases, promises, and other terms and conditions of this Separation Agreement, provided that you shall have signed and dated this Separation Agreement, and comply with all of its terms and conditions:
2.1.1Kilroy shall pay you separation pay in the amount of One Million and Thirty-Eight Dollars and 40/100 ($1,000,038.40), subject to applicable payroll and tax withholdings. Such amount represents the sum of (i) your annual rate of base salary in effect as of your Separation Date and (ii) your target level of annual incentive bonus for 2026 (which is equivalent to 100% of your annual rate of base salary) and shall be paid to you in equal monthly installments (each representing the applicable fraction of such total benefit amount, rounded down to the nearest whole cent) over a period of twelve (12) consecutive months commencing with September 2026, with the first installment payable on (or within ten (10) days following) the sixtieth (60th) day following your Separation Date and to include each such installment that was otherwise (but for such 60-day delay) scheduled to be paid following your Separation Date and prior to the date of such payment.
2.1.2In addition, Kilroy shall pay you an amount equal to Three Hundred Eighty-Seven Thousand Six Hundred Eighty-Six Dollars and 11/100 ($387,686.11), subject to applicable payroll and tax withholdings, and subject to your complying with your obligations to provide transition services under Section 1.12, on (or within ten (10) days following) the sixtieth (60th) day following your Separation Date. Such amount represents
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your pro-rated annual incentive bonus for 2026 determined by multiplying (i) your target annual incentive bonus for 2026 by (y) a fraction, the numerator of which is the sum of the total number of days in 2026 you were employed by the Company plus sixty (60) days, and the denominator of which is the total number of days in such year.
2.1.3Should you duly elect continued healthcare coverage under COBRA, Kilroy shall pay the premiums for continued healthcare coverage under COBRA (for you and your eligible dependents) for eighteen (18) months covering September 2026, through and including February 2028 (the “COBRA Reimbursement”). Accordingly, after March 2028, Kilroy shall have no further obligation whatsoever to pay COBRA premium payments as a result of your election to be covered under COBRA or to provide notice to you regarding COBRA benefits. Commencing on February 1, 2028, should you wish to continue such COBRA coverage, you shall be solely responsible for making premium payments when due in a timely manner and for complying with any other obligations under COBRA. Notwithstanding the foregoing, should you obtain other medical insurance through new employment or otherwise prior to February 1, 2028, Kilroy’s obligation to provide the COBRA Reimbursement shall cease. You agree to promptly notify the Kilroy Human Resources Department should you obtain other medical insurance through new employment or otherwise. As to any COBRA Reimbursement payments provided for above, Kilroy’s current practice is to pay any required COBRA Reimbursement payments directly to the applicable plan/insurer, but it reserves the right to require you to make the applicable premium payments and then reimburse you for the same.
2.1.4In consideration for your waiver of notice referred to in Section 1.3 and in addition to the payments described above, Kilroy shall pay you an amount equal to Eighty-Three Thousand Three Hundred Thirty-Six Dollars and 54/100 ($83,336.54) (which represents one-sixth (1/6) of your annual rate of base salary in effect as of your Separation Date), such amount to be paid, subject to applicable payroll and tax withholdings, in accordance with Kilroy’s regular bimonthly payroll schedule for the sixty (60) day period following your Separation Date.
2.2Other than the Separation Benefit as set forth expressly in this Agreement, you acknowledge and agree that no other payments of any kind or in any amount shall be due and owing, or are due and owing, to you from Kilroy, or from any of the Kilroy Released Parties, as consideration for the releases set forth herein.
3NO REPRESENTATIONS AS TO TAXABILITY OF ANY PAYMENTS
Kilroy will withhold required federal, state, and local taxes from any and all payments contemplated by this Separation Agreement. Other than Kilroy’s obligation and right to make such withholdings, you will be responsible to pay any and all taxes, interest, and penalties that may be imposed with respect to the payments contemplated by this Separation Agreement (including but not limited to those imposed by Internal Revenue Code Section 409A).
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4GENERAL RELEASE OF CLAIMS
4.1You, on your own behalf and on behalf of your descendants, dependents, heirs, executors, administrators, assigns and successors, and each of them, hereby acknowledge full and complete satisfaction of and releases and discharges and covenants not to sue KRC, KRLP, each of their respective divisions, subsidiaries, parents, or affiliated corporations, past and present, and each of them, as well as its and their assignees, successors, directors, officers, stockholders, partners, representatives, attorneys, agents or employees, past or present, or any of them (individually and collectively, the “Kilroy Released Parties”), from and with respect to any and all claims, agreements, obligations, demands and causes of action, known or unknown, suspected or unsuspected, arising out of or in any way connected with your employment or any other relationship with or interest in KRC, KRLP, or either of them, or the termination thereof, including without limiting the generality of the foregoing, any claim for severance pay, profit sharing, bonus or similar benefit, pension, retirement, life insurance, health or medical insurance or any other fringe benefit, or disability, or any other claims, agreements, obligations, demands and causes of action, known or unknown, suspected or unsuspected resulting from any act or omission by or on the part of Releasees committed or omitted prior to the date of this Agreement set forth below, including, without limiting the generality of the foregoing, any claim under Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act, the Family and Medical Leave Act, the California Fair Employment and Housing Act, California Labor Code Section 132a, the California Family Rights Act, or any other federal, state or local law, regulation, ordinance, constitution or common law (collectively, the “Claims”); provided, however, that the foregoing release does not apply to any obligation of Kilroy to you pursuant to any of the following: (1) Section 2.1 of this Agreement; (2) any equity-based awards previously granted by Kilroy to you, to the extent that such awards continue after the termination of your employment with Kilroy in accordance with the applicable terms of such awards; (3) any right to indemnification that you may have pursuant to Kilroy’s bylaws, its corporate charter or under any written indemnification agreement with Kilroy (or any corresponding provision of any subsidiary or affiliate of Kilroy) with respect to any loss, damages or expenses (including but not limited to attorneys’ fees to the extent otherwise provided) that you may in the future incur with respect to your service as an employee, officer or director of Kilroy or any of its subsidiaries or affiliates; (4) with respect to any rights that you may have to insurance coverage for such losses, damages or expenses under any Kilroy (or subsidiary or affiliate) directors and officers liability insurance policy; (5) any rights to continued medical and dental coverage that you may have under COBRA; (6) any rights to payment of benefits that you may have under a retirement plan sponsored or maintained by Kilroy that is intended to qualify under Section 401(a) of the Internal Revenue Code of 1986, as amended; or (7) any deferred compensation that you may be entitled to under a nonqualified deferred compensation plan of Kilroy.
4.2In addition, this release does not cover any Claim that cannot be so released as a matter of applicable law. Notwithstanding anything to the contrary herein, nothing in this Agreement prohibits you from filing a charge with or participating in an investigation conducted by any state or federal government agencies. However, you do waive, to the maximum extent permitted by law, the right to receive any monetary or other recovery, should any agency or any other person pursue any claims on your behalf arising out of any claim released pursuant to this Agreement. For clarity, and as required by law, such waiver does not prevent you from accepting
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a whistleblower award from the Securities and Exchange Commission pursuant to Section 21F of the Securities Exchange Act of 1934, as amended. You acknowledge and agree that you have received any and all leave and other benefits that you have been and are entitled to pursuant to the Family and Medical Leave Act of 1993.
5WAIVER OF UNKNOWN CLAIMS
5.1This Agreement is intended to be effective as a general release of and bar to each and every Claim hereinabove specified. Accordingly, you hereby expressly waive any rights and benefits conferred by Section 1542 of the California Civil Code and any similar provision of any other applicable state law as to the Claims. Section 1542 of the California Civil Code provides:
“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.”
5.2You acknowledge that you later may discover claims, demands, causes of action or facts in addition to or different from those which you now know or believe to exist with respect to the subject matter of this Agreement and which, if known or suspected at the time of executing this Agreement, may have materially affected its terms. Nevertheless, you hereby waive, as to the Claims, any claims, demands, and causes of action that might arise as a result of such different or additional claims, demands, causes of action or facts.
6SPECIAL ADEA WAIVER
You expressly acknowledge and agree that by entering into this Agreement, you are waiving any and all rights or claims that you may have arising under the Age Discrimination in Employment Act of 1967, as amended (the “ADEA”), and that this waiver and release is knowing and voluntary. You and Kilroy agree that this waiver and release does not apply to any rights or claims that may arise under the ADEA after the date you sign this Agreement. You further expressly acknowledges and agrees that:
(a)In return for this Agreement, you will receive consideration beyond that which you were already entitled to receive before executing this Agreement;
(b)You are hereby advised in writing by this Agreement to consult with an attorney before signing this Agreement;
(c)You were given a copy of this Agreement on August 4, 2026, and informed that you have twenty-one (21) days within which to consider this Agreement and that if you wish to execute this Agreement prior to the expiration of such 21-day period you will have done so voluntarily and with full knowledge that you are waiving
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your right to have twenty-one (21) days to consider this Agreement; and that such twenty-one (21) day period to consider this Agreement would not and will not be re-started or extended based on any changes, whether material or immaterial, that are or were made to this Agreement in such twenty-one (21) day period after you received it;
(d)You were informed that you had seven (7) days following the date of execution of this Agreement in which to revoke this Agreement, and this Agreement will become null and void if you elect revocation during that time. Any revocation must be in writing and must be received by Kilroy during the seven-day revocation period. In the event that you exercise this revocation right, neither Kilroy nor you will have any obligation under this Agreement. Any notice of revocation should be sent by you in writing to Kilroy (attention Lauren Stadler, Executive Vice President, General Counsel and Secretary, at lstadler@kilroyrealty.com), so that it is received within the seven-day period following execution of this Agreement by you.
(e)Nothing in this Agreement prevents or precludes you from challenging or seeking a determination in good faith of the validity of this waiver under the ADEA, nor does it impose any condition precedent, penalties or costs for doing so, unless specifically authorized by federal law.
7NO TRANSFERRED CLAIMS
You represent and warrant to Kilroy that you have not heretofore assigned or transferred to any person not a party to this Agreement any released matter or any part or portion thereof.
8NO ADMISSION OF LIABILITY; NON-DISPARAGEMENT
Each of KRC, KRLP and you expressly acknowledge and agree that by entering into this Separation Agreement, no Party admits or acknowledges the existence of any liability or wrongdoing to any other Party, all such liability being specifically and expressly denied. You agree that you shall not take any action yourself or through any third party, to disparage, criticize, or damage the reputation of KRC, KRLP, any of the Kilroy Released Parties, or any of their respective officers, directors, employees, businesses, business projects or properties, and that you shall not disparage KRC, KRLP, any of the Kilroy Released Parties, or any of their respective officers, directors, employees, businesses, business projects or properties, in the community-at-large or in the media, including the Internet, blogs, social media (such as Facebook, LinkedIn, Glassdoor, and X f/k/a Twitter), or other Internet access forum. Furthermore, Kilroy shall instruct the named executive officers of Kilroy not to make any such disparaging statements about you. Notwithstanding anything to the contrary herein, nothing in this Separation Agreement shall prohibit you or any of Kilroy’s named executive officers from providing truthful testimony in response to any court or arbitral order, subpoena, or government investigation or from providing truthful information to any governmental, regulatory, or administrative agency.
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9REMEDY FOR BREACH OF SEPARATION AGREEMENT
9.1Without waiver of any rights or remedies set forth herein, which remedies may be pursued in arbitration by or for the benefit of each of the Parties and/or the Kilroy Released Parties, as a remedy for any proven breach, Kilroy shall be entitled as the prevailing Party to recover the entire Separation Benefit, with the exception of (i) cash paid pursuant to Section 2.1.1 in the total amount (before applicable withholdings) of Forty-One Thousand Six Hundred Sixty-Eight Dollars and 27/100 ($41,668.27), which sum the Parties agree shall be retained by you as good and valuable consideration for your releases and other covenants and agreements provided herein, and
(ii) cash paid pursuant to Section 2.1.4.
9.2Without limiting any and all available remedies at law or in equity, all of which shall be available and are not waived, the Parties agree that any breach of the terms of this Separation Agreement would result in irreparable injury and damage to either one of them, for which there is no adequate remedy at law. The Parties agree that the aggrieved Party (including any of the Kilroy Released Parties) shall be entitled to obtain a temporary restraining order and/or a preliminary injunction or permanent injunction, without the need to post a bond, for the purpose of restraining the other Party from engaging in prohibited activities or providing for such other relief as may be required to specifically enforce the terms of this Separation Agreement. The availability of injunctive relief shall be in addition to any other remedies to which the aggrieved Party may be entitled at law or in equity.
9.3All remedies expressly provided for in this Separation Agreement are in addition to any and all other remedies existing at contract, law or in equity. Resort to any remedy provided for in this Separation Agreement or provided for by contract, law or in equity will not prevent concurrent or subsequent award of other appropriate remedies or preclude a recovery of monetary damages and other compensation or restitution.
9.4The Parties agree that any action, cause of action, dispute, controversy or claim (collectively, “Dispute”) arising out of or in any way relating to this Separation Agreement, including without limitation the pursuit of relief under this Section 9, or the interpretation or application of this Separation Agreement or to the breach or threatened breach thereof, or your employment with Kilroy and its termination, or to any and all other matters between the Parties (and/or the Kilroy Released Parties), shall be resolved to the fullest extent provided by law by final and binding arbitration administered by JAMS before a single neutral arbitrator. The arbitration will be conducted pursuant to the Employment Arbitration Rules & Procedures and subject to the JAMS Policy on Employment Arbitration Minimum Standards of Procedural Fairness. The rules may be accessed at: https://www.jamsadr.com/rules-employment-arbitration/english. Under these rules, the Parties acknowledge and agree that: (a) a Party may file any claim in arbitration that could have been brought or filed in any court of law or in equity; (b) the prevailing Party shall recover any and all damages and all other relief that would otherwise be available at law or in equity, and should Kilroy be the prevailing party, then including without limitation the relief provided for in Section 9.1; (c) each Party is entitled to discovery sufficient to adequately arbitrate the Dispute, including access to essential documents and witnesses; (d) Kilroy shall pay the entire cost of the arbitrator and the arbitration forum costs; (e) the arbitrator shall issue a written decision stating the essential findings and conclusions on which the arbitration award is based, and
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sufficient to allow for judicial review to the fullest extent permitted by law including for legal error; and (f) except as required for judicial review or in response to court order, any and all proceedings shall be maintained in the strictest confidence by the Parties and their representatives, the arbitrator and any other participants in the arbitration proceedings. Each of the Parties hereby consents to the jurisdiction of the arbitrator, the authority of the arbitrator to award the relief provided for herein, and to JAMS to administer the arbitration, and to submit to said jurisdiction. Accordingly, each Party voluntarily, knowingly and intentionally waives the Party’s right to a jury trial and agrees to submit any Dispute to arbitration under the terms and conditions provided for herein. The venue of the arbitration shall be in the County of Los Angeles, specifically, at the JAMS offices located at 1925 Century Park E, 14th Floor, Los Angeles, CA 90067, unless the Parties mutually agree in a writing executed by both Parties to a different venue. The Parties agree that this Arbitration Agreement shall be governed by California Civil Procedure Code section 1280 et seq. and the Federal Arbitration Act (“FAA”), 9 U.S.C. section 1, et. seq., except when there is a conflict between the two the FAA will control. Nothing stated herein shall waive your right to elect to bring any claim of sexual assault or sexual harassment arising after the date of execution of this Separation Agreement in a civil court of law.
10INTEGRATED AGREEMENT
This Separation Agreement constitutes a fully integrated written contract expressing the entire agreement between Kilroy and you as to its subject matter. All prior and contemporaneous discussions, negotiations and writings have been and are merged with and integrated into, and are superseded by, this Separation Agreement. No representations, promises, agreements, or understandings, written or oral, not contained herein shall be of any force or effect. This Separation Agreement cannot be modified except by a writing executed by the Parties, including two authorized officers of Kilroy, hereto.
11SEVERABILITY
If any provision (or portion thereof) of this Separation Agreement is declared by an arbitrator or court of competent jurisdiction to be invalid or unenforceable, the remaining provisions (including other portions of a provision having an invalid portion) shall remain in full force and effect and, to the extent possible, the disputed provision shall be construed so that it may be valid and enforceable.
12NON-WAIVER
No waiver of any breach of any term or provision of this Separation Agreement shall be construed to be, nor shall be, a waiver of any other breach of this Separation Agreement. No waiver shall be binding unless in writing and signed by the Party waiving the breach.
13GOVERNING LAW
Construction and interpretation of this Separation Agreement shall at all times and in all respects be governed by the laws of the State of California, without regard to the rules or principles of conflicts or choice of law that might look to any jurisdiction outside of the State of California.
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14MISCELLANEOUS TERMS
Kilroy and you each represent, warrant and agree as follows:
14.1Each of the Parties has received, or has been given the opportunity to receive, prior independent legal advice from legal counsel and tax advisors of their choice with respect to the advisability of entering into this Separation Agreement, and the taxability of any payments and benefits set forth herein, and therefore no ambiguity shall be resolved against any Party by virtue of having participated in the drafting of this Separation Agreement.
14.2Each of the Parties represents that each has read this Separation Agreement carefully, knows and understands its contents, and has investigated the facts pertaining to this Separation Agreement to the extent that each deems necessary or desirable.
14.3The Section headings and titles contained in this Separation Agreement are inserted for convenience only, and they neither form a part of this Separation Agreement nor are they to be used in the construction or interpretation of this Separation Agreement. Where the context requires, the singular shall include the plural, the plural shall include the singular, and any gender shall include all other genders and the neutral. Where specific language is used to clarify by example a general statement contained herein, such specific language shall not be deemed to modify, limit or restrict in any manner the construction of the general statement to which it relates.
14.4This Separation Agreement is personal to you and shall not be assignable by you except by operation of law. This Separation Agreement shall inure to the benefit of and be binding upon Kilroy and its respective successors and assigns and any such successor or assignee shall be deemed substituted for Kilroy under the terms of this Separation Agreement for all purposes. As used herein, “successor” and “assignee” shall include any person, firm, corporation or other business entity which at any time, whether by purchase, merger or otherwise, directly or indirectly acquires ownership of Kilroy or to which Kilroy assigns this Separation Agreement by operation of law or otherwise.
14.5Kilroy and you shall each bear their own attorneys’ fees, costs, and expenses incurred with respect to the drafting, negotiation or execution of this Separation Agreement.
14.6The Parties consent and agree that this Separation Agreement may be signed using electronic signature technology (e.g., via DocuSign or similar electronic signature technology), and that such signed electronic record shall be valid and as effective to bind the Party so signing as a paper copy bearing such Party’s hand-written signature. The Parties further consent and agree that (1) to the extent a Party signs this Separation Agreement using electronic signature technology, by clicking “sign,” such Party is signing their Separation Agreement electronically, and (2) the electronic signatures appearing on this Separation Agreement shall be treated, for purposes of validity, enforceability, and admissibility, the same as hand-written signatures. You represent that your signature on this Separation Agreement is knowing and voluntary and not induced by fraud, misrepresentation or coercion. The Parties agree that you may deliver and/or transmit the signed and dated Separation Agreement by e-email of a .pdf document to Lauren Stadler, Executive Vice President, General Counsel and Secretary, at lstadler@kilroyrealty.com, or by using such electronic signature technology.
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15EFFECTIVE DATE OF SEPARATION AGREEMENT
The Effective Date of this Separation Agreement shall be the eighth (8th) day following the date on which you shall have signed this Separation Agreement (the “Effective Date”); provided that you shall not have revoked this Separation Agreement (or any portion of this Separation Agreement) pursuant to Section 6 above.
[Signatures Follow Next Page]
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IN WITNESS WHEREOF, this Separation Agreement has been duly executed by Kilroy and you.
| Dated: | 8/11/2026 | /s/ Jeffrey Kuehling | ||||||||||||||||||
| JEFFREY KUEHLING | ||||||||||||||||||||
| KILROY REALTY CORPORATION, | ||||||||||||||||||||
| a Maryland Corporation | ||||||||||||||||||||
| Dated: | 8/10/2026 | By: | /s/ Lauren Stadler | |||||||||||||||||
| Name: | Lauren Stadler | |||||||||||||||||||
| Title: | EVP, General Counsel and Secretary | |||||||||||||||||||
| Dated: | 8/10/2026 | By: | /s/ Sherrie Sage Schwartz | |||||||||||||||||
| Name: | Sherrie Sage Schwartz | |||||||||||||||||||
| Title: | CHRO | |||||||||||||||||||
| KILROY REALTY, L.P., | ||||||||||||||||||||
| a Delaware Limited Partnership | ||||||||||||||||||||
| By: | KILROY REALTY CORPORATION, | |||||||||||||||||||
| a Maryland Corporation | ||||||||||||||||||||
| Its: | General Partner | |||||||||||||||||||
| Dated: | 8/10/2026 | By: | /s/ Lauren Stadler | |||||||||||||||||
| Name: | Lauren Stadler | |||||||||||||||||||
| Title: | EVP, General Counsel and Secretary | |||||||||||||||||||
| Dated: | 8/10/2026 | By: | /s/ Sherrie Sage Schwartz | |||||||||||||||||
| Name: | Sherrie Sage Schwartz | |||||||||||||||||||
| Title: | CHRO | |||||||||||||||||||
[Signature Page to the Confidential Separation Agreement and Release of Claims for Jeffrey Kuehling]
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Exhibit 31.1
Certification of Chief Executive Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Angela M. Aman, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of Kilroy Realty Corporation;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors (or persons performing the equivalent functions):
a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| /s/ Angela M. Aman | ||
| Angela M. Aman | ||
| Chief Executive Officer | ||
Date: October 23, 2026
Exhibit 31.2
Certification of Chief Financial Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Eliott L. Trencher, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of Kilroy Realty Corporation;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors (or persons performing the equivalent functions):
a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| /s/ Eliott L. Trencher | ||
| Eliott L. Trencher | ||
| Executive Vice President, Chief Investment Officer and Interim Chief Financial Officer and Treasurer | ||
Date: October 23, 2026
Exhibit 31.3
Certification of Chief Executive Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Angela M. Aman, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of Kilroy Realty, L.P.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors (or persons performing the equivalent functions):
a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| /s/ Angela M. Aman | ||
| Angela M. Aman | ||
| Chief Executive Officer | ||
Kilroy Realty Corporation, sole general partner of Kilroy Realty, L.P. | ||
Date: October 23, 2026
Exhibit 31.4
Certification of Chief Financial Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Eliott L. Trencher, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of Kilroy Realty, L.P.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's Board of Directors (or persons performing the equivalent functions):
a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
| /s/ Eliott L. Trencher | ||
| Eliott L. Trencher | ||
| Executive Vice President, Chief Investment Officer and Interim Chief Financial Officer and Treasurer | ||
Kilroy Realty Corporation, sole general partner of Kilroy Realty, L.P. | ||
Date: October 23, 2026
Exhibit 32.1
Certification of Chief Executive Officer
Pursuant to 18 U.S.C. § 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of Kilroy Realty Corporation (the “Company”) hereby certifies, to her knowledge, that:
(i)the accompanying Quarterly Report on Form 10-Q of the Company for the quarter ended September 30, 2026 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and
(ii)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
| /s/ Angela M. Aman | |||||
| Angela M. Aman | |||||
| Chief Executive Officer | |||||
| Date: | October 23, 2026 | ||||
The foregoing certification is being furnished solely pursuant to 18 U.S.C. § 1350, is not being filed as part of the Report or as a separate disclosure document, and is not being incorporated by reference into any filing of the Company or Kilroy Realty, L.P. under the Securities Act of 1933, as amended, or the Securities Act of 1934, as amended, (whether made before or after the date of the Report) irrespective of any general incorporation language contained in such filing. The signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
Exhibit 32.2
Certification of Chief Financial Officer
Pursuant to 18 U.S.C. § 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of Kilroy Realty Corporation (the “Company”) hereby certifies, to his knowledge, that:
(i)the accompanying Quarterly Report on Form 10-Q of the Company for the quarter ended September 30, 2026 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and
(ii)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
| /s/ Eliott L. Trencher | |||||
| Eliott L. Trencher | |||||
| Executive Vice President, Chief Investment Officer and Interim Chief Financial Officer and Treasurer | |||||
| Date: | October 23, 2026 | ||||
The foregoing certification is being furnished solely pursuant to 18 U.S.C. § 1350, is not being filed as part of the Report or as a separate disclosure document, and is not being incorporated by reference into any filing of the Company or Kilroy Realty, L.P. under the Securities Act of 1933, as amended, or the Securities Act of 1934, as amended, (whether made before or after the date of the Report) irrespective of any general incorporation language contained in such filing. The signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
Exhibit 32.3
Certification of Chief Executive Officer
Pursuant to 18 U.S.C. § 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of Kilroy Realty Corporation, the sole general partner of Kilroy Realty, L.P. (the “Operating Partnership”), hereby certifies, to her knowledge, that:
(i)the accompanying Quarterly Report on Form 10-Q of the Operating Partnership for the quarter ended September 30, 2026 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and
(ii)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Operating Partnership.
| /s/ Angela M. Aman | |||||
| Angela M. Aman | |||||
| Chief Executive Officer | |||||
Kilroy Realty Corporation, sole general partner of Kilroy Realty, L.P. | |||||
| Date: | October 23, 2026 | ||||
The foregoing certification is being furnished solely pursuant to 18 U.S.C. § 1350, is not being filed as part of the Report or as a separate disclosure document, and is not being incorporated by reference into any filing of Kilroy Realty Corporation or the Operating Partnership under the Securities Act of 1933, as amended, or the Securities Act of 1934, as amended, (whether made before or after the date of the Report) irrespective of any general incorporation language contained in such filing. The signed original of this written statement required by Section 906 has been provided to the Operating Partnership and will be retained by the Operating Partnership and furnished to the Securities and Exchange Commission or its staff upon request.
Exhibit 32.4
Certification of Chief Financial Officer
Pursuant to 18 U.S.C. § 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of Kilroy Realty Corporation, the sole general partner of Kilroy Realty, L.P. (the “Operating Partnership”), hereby certifies, to his knowledge, that:
(i)the accompanying Quarterly Report on Form 10-Q of the Operating Partnership for the quarter ended September 30, 2026 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and
(ii)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Operating Partnership.
| /s/ Eliott L. Trencher | |||||
| Eliott L. Trencher | |||||
| Executive Vice President, Chief Investment Officer and Interim Chief Financial Officer and Treasurer | |||||
Kilroy Realty Corporation, sole general partner of Kilroy Realty, L.P. | |||||
| Date: | October 23, 2026 | ||||
The foregoing certification is being furnished solely pursuant to 18 U.S.C. § 1350, is not being filed as part of the Report or as a separate disclosure document, and is not being incorporated by reference into any filing of Kilroy Realty Corporation or the Operating Partnership under the Securities Act of 1933, as amended, or the Securities Act of 1934, as amended, (whether made before or after the date of the Report) irrespective of any general incorporation language contained in such filing. The signed original of this written statement required by Section 906 has been provided to the Operating Partnership and will be retained by the Operating Partnership and furnished to the Securities and Exchange Commission or its staff upon request.