Kilroy Realty Corporation Reports First Quarter Financial Results

News Details View all news 04/27/2026 Kilroy Realty Corporation (NYSE: KRC) (“Kilroy” or the “Company”) today reported financial results for the first quarter ended March 31, 2026. “I am pleased to report on a remarkably strong quarter of execution across all facets of our business. First-quarter leasing activity, which totaled 568,000 square feet, represented the Company’s strongest first-quarter performance since 2017, as we continued to capitalize on accelerating momentum across the West Coast,” said Angela Aman, Chief Executive Officer. “In addition, we remained active on the capital allocation front, selling approximately $350 million of non-core and non-strategic properties year-to-date, while prudently allocating capital to debt repayments, opportunistic share repurchases, and a substantially pre-leased development project in one of the Company’s best-performing submarkets.” Financial Results Revenues of $270.1 million for the quarter ended March 31, 2026, as compared to $270.8 million for the quarter ended March 31, 2025Net loss available to common stockholders of $(19.3) million, or $(0.16) per diluted share, for the quarter ended March 31, 2026, as compared to Net income available to common stockholders of $39.0 million, or $0.33 per diluted share, for the quarter ended March 31, 2025Funds from operations (“FFO”) of $108.8 million, or $0.91 per diluted share, for the quarter ended March 31, 2026, as compared to $122.3 million, or $1.02 per diluted share, for the quarter ended March 31, 2025 Leasing and Occupancy Stabilized Portfolio was 77.6% occupied and 82.3% leased at March 31, 2026, representing 470 basis points of leases signed but not yet commencedExcluding Kilroy Oyster Point Phase 2 (“KOP 2”), the Stabilized Portfolio was 81.5% occupied and 84.3% leased at March 31, 2026, representing 280 basis points of leases signed but not yet commencedDuring the quarter, signed approximately 568,000 square feet of leasesLeasing activity was comprised of 406,000 square feet of new leasing on previously vacant space, 80,000 square feet of new leasing on currently occupied space, and 82,000 square feet of renewal leasingNew leasing on vacant space included an approximately 145,000-square-foot development lease with Cooley LLP, a global law firm. See “Joint Venture Formation” section below for additional detailsLeasing activity during the quarter included approximately 70,000 square feet of short-term leasingGAAP and cash rents on leases signed during the quarter decreased (10.6)% and (16.8)%, respectively, from prior levels on Second Generation leasing, excluding short-term leasingExcluding leases signed on space vacant for more than 12 months, GAAP and cash rents on leases signed during the quarter increased 19.2% and 5.2%, respectively Capital Recycling Activity In January, completed the sale of Kilroy Sabre Springs, an approximately 428,000-square-foot, three-building campus in the I-15 Corridor submarket of San Diego, for gross sales proceeds of $124.5 millionIn March, completed the sale of Del Mar Tech Center, an approximately 39,000-square-foot office property in the Del Mar submarket of San Diego, for gross sales proceeds of $21.0 millionDuring the first quarter, entered into an agreement to sell the 200-unit Columbia Square Living residential tower and the 193-unit Jardine residential tower in the Hollywood submarket of Los Angeles and classified the properties as Held for Sale. The sale closed in April for gross sales proceeds of $202.0 million Common Stock Repurchases During the quarter, repurchased approximately 2.4 million shares of common stock at a weighted average price of $30.80 per common share for an aggregate purchase price of $72.7 million Joint Venture Formation In February, acquired an interest in 1900 Broadway, a fully-entitled land site in Downtown Redwood City capable of supporting a 251,000-square-foot office building. Concurrent with closing, signed a 20-year lease with Cooley LLP for 145,000 square feet, bringing the project to 58% pre-leased. Total project costs are expected to range from $330.0 million to $350.0 million. Construction is anticipated to commence in 2027, with delivery scheduled for 2030, at which time the Company’s ownership interest is expected to be 97% Dividend The Board declared and paid a regular quarterly cash dividend on its common stock of $0.54 per share, equivalent to an annual rate of $2.16 per share. The dividend was paid on April 8, 2026 to stockholders of record on March 31, 2026 (the ex-dividend date) Recent Developments In April, repaid the outstanding $50.0 million of 4.300% Private Placement Senior Notes Series A due July 2026, at par Net Income Available to Common Stockholders / FFO Guidance The Company is updating Nareit-defined FFO per share guidance for the full year 2026 to $3.49 to $3.63 per diluted share, from the previous range of $3.25 to $3.45. The table below reflects key assumptions for 2026 guidance. Key Assumptions February 2026 Assumptions April 2026 Assumptions Average full year occupancy 76.0% to 78.0% 76.5% to 78.0% Average full year occupancy excluding KOP 2 80.0% to 81.5% 80.5% to 81.5% Same Property Cash Net Operating Income (“NOI”) growth (1) (2) (1.50%) to 0.00% 0.25% to 1.25% NOI from Development Properties (3) $(23.5) to $(25.0) million $(22.5) to $(24.0) million Non-Cash GAAP NOI adjustments (1) (4) $12.0 to $14.0 million $13.0 to $15.0 million GAAP lease termination fee income $3.0 to $4.5 million No change General and administrative and Leasing costs $(89.0) to $(91.0) million $(87.5) to $(89.5) million Interest income $2.0 to $3.0 million No change Gross interest expense $(212.0) to $(214.0) million $(208.0) to $(209.5) million Capitalized interest(5) $32.0 to $34.0 million $48.5 to $49.5 million Total development spending (6) $150.0 to $200.0 million No change Operating property dispositions +/- $300.0 million $347.5 to $500.0 million Full Year 2026 Range as of February 2026 Full Year 2026 Range as of April 2026 Low End High End Low End High End $ and shares/units in thousands, except per share/unit amounts Net income available to common stockholders per share - diluted $ 0.59 $ 0.79 $ 0.08 $ 0.22 Weighted average common shares outstanding - diluted(7) 120,100 120,100 118,100 118,100 Net income available to common stockholders $ 70,800 $ 95,040 $ 9,055 $ 25,743 Adjustments: Net income attributable to noncontrolling common units of the Operating Partnership 300 300 300 300 Net income attributable to noncontrolling interests in consolidated property partnerships 17,000 17,000 17,000 17,000 Depreciation and amortization of real estate assets 342,000 342,000 379,400 379,400 Gain on sale of depreciable operating property (8,200 ) (8,200 ) (23,525 ) (23,525 ) Impairment of real estate assets — — 61,778 61,778 Funds From Operations attributable to noncontrolling interests in consolidated property partnerships (28,000 ) (28,000 ) (28,000 ) (28,000 ) Funds From Operations(1) $ 393,900 $ 418,140 $ 416,008 $ 432,696 Weighted average common shares/units outstanding – diluted(8) 121,200 121,200 119,200 119,200 Nareit Funds From Operations per common share/unit – diluted(1) $ 3.25 $ 3.45 $ 3.49 $ 3.63 (1) For additional information, please refer to pages 36-38 “Non-GAAP Supplemental Measures” of the Company’s Supplemental Financial Report furnished on Form 8-K for management statements on the Company’s non-GAAP measures. (2) Increase in guidance range includes $5.9 million in settlement income received in Q2 2026. (3) NOI from Development Properties is primarily comprised of carry costs associated with Company’s KOP 2 and Flower Mart projects. Guidance now assumes the continued capitalization of the Company’s Flower Mart project through December 2026, previously assumed to be June 2026. (4) Non-Cash GAAP NOI adjustments include the following items: Amortization of deferred revenue related to tenant-funded tenant improvements, Straight-line rents, net, Amortization of net below market rents, and Lease related adjustments and other. (5) Capitalized interest guidance now assumes the continued capitalization of the Company’s Flower Mart project through December 2026, previously assumed to be June 2026. (6) Total development spending includes recently stabilized, in-process, and future development projects. (7) Calculated based on estimated weighted average shares outstanding, including non-participating share-based awards and the dilutive impact of contingently issuable shares. (8) Calculated based on the weighted average shares outstanding, including participating and non-participating share-based awards, and the dilutive impact of contingently issuable shares, and assuming the exchange of all common limited partnership units outstanding. Reported amounts are attributable to common stockholders, common unitholders, and restricted stock unitholders. The Company’s guidance estimates for the full year 2026, and the reconciliation of Net income available to common stockholders per share - diluted and FFO per share and unit - diluted included within this press release, reflect management’s views on current and future market conditions, including assumptions with respect to rental rates, occupancy levels, and the earnings impact of the events referenced in this press release. These guidance estimates do not include the impact on the Company’s operating results from any events outside of the Company’s control, as the timing and magnitude of any such events are not known at the time the Company provides guidance. There can be no assurance that the Company’s actual results will not differ materially from these estimates. Conference Call and Audio Webcast The Company’s management will discuss first quarter results and the current business environment during the Company’s April 28, 2026 earnings conference call. The call will begin at 10:00 a.m. Pacific Time and last approximately one hour. To participate and obtain conference call dial-in details, register by using the following link, https://events.q4inc.com/analyst/264481752?pwd=Vl5fneFS. Those interested in listening via the Internet can access the conference call at https://events.q4inc.com/attendee/264481752. It may be necessary to download audio software to hear the conference call. About Kilroy Realty Corporation Kilroy is a leading U.S. landlord and developer, with operations in the San Francisco Bay Area, Los Angeles, Seattle, San Diego, and Austin. The Company has earned global recognition for sustainability, building operations, innovation, and design. As a pioneer and innovator in the creation of a more sustainable real estate industry, the Company’s approach to modern business environments helps drive creativity and productivity for some of the world’s leading technology, media, life science, and professional services companies. The Company is a publicly traded real estate investment trust (“REIT”) and member of the S&P MidCap 400 Index with more than seven decades of experience managing, developing, and acquiring office, life science, and mixed-use projects. As of March 31, 2026, Kilroy’s stabilized portfolio totaled approximately 17.1 million square feet of primarily office and life science space that was 77.6% occupied and 82.3% leased. The Company also has 608 residential units in San Diego, with a quarterly average occupancy of 95.0%. A Leader in Sustainability and Commitment to Corporate Social Responsibility Kilroy has a longstanding commitment to sustainability and continues to be a recognized leader in our sector. For over a decade, the Company and its sustainability initiatives have been recognized with numerous honors, including earning the GRESB five star rating and being named a sector and regional leader in the Americas. Other honors have included the Nareit Leader in the Light Award, being listed on the Dow Jones Sustainability World Index, being named ENERGY STAR Partner of the Year, and receiving the ENERGY STAR highest honor of Sustained Excellence. Kilroy is proud to have achieved carbon neutral operations across our portfolio since 2020. The Company also has a longstanding commitment to maintain high levels of LEED, Fitwell, and ENERGY STAR certifications across the portfolio. Kilroy is committed to cultivating a company culture that makes a positive difference in our employees’ lives by focusing on development, celebrating our unique backgrounds, promoting employee health and wellness, and dedicating ourselves to being a responsible corporate citizen through our community service and philanthropic efforts. More information is available at http://www.kilroyrealty.com. Forward-Looking Statements This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. 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 us and 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. These factors 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 our business and financial performance, see the factors included under the caption “Risk Factors” in our annual report on Form 10-K for the year ended December 31, 2025, and our other filings with the Securities and Exchange Commission. 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 made in this press release 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. KILROY REALTY CORPORATION SUMMARY OF QUARTERLY RESULTS (unaudited; in thousands, except per share data) Three Months Ended March 31, 2026 2025 Revenues $ 270,053 $ 270,844 Net (loss) income available to common stockholders $ (19,267 ) $ 39,008 Weighted average common shares outstanding – basic 117,637 118,195 Weighted average common shares outstanding – diluted 117,637 118,664 Net (loss) income available to common stockholders per share – basic $ (0.16 ) $ 0.33 Net (loss) income available to common stockholders per share – diluted $ (0.16 ) $ 0.33 Funds From Operations(1)(2) $ 108,846 $ 122,310 Weighted average common shares/units outstanding – basic (3) 119,251 119,750 Weighted average common shares/units outstanding – diluted (4) 119,957 120,220 Funds From Operations per common share/unit – basic(2) $ 0.91 $ 1.02 Funds From Operations per common share/unit – diluted(2) $ 0.91 $ 1.02 Common shares outstanding at end of period 116,279 118,269 Common partnership units outstanding at end of period 1,134 1,151 Total common shares and units outstanding at end of period 117,413 119,420 March 31, 2026 March 31, 2025 Stabilized office portfolio occupancy rates:(5) San Francisco Bay Area 75.2 % 86.8 % Los Angeles 74.8 % 72.7 % Seattle 79.3 % 78.6 % San Diego 84.6 % 87.5 % Austin 83.2 % 76.4 % Weighted average total 77.6 % 81.4 % Total square feet of stabilized office properties owned at end of period:(5) San Francisco Bay Area 6,437 6,171 Los Angeles 4,242 4,340 Seattle 2,997 2,996 San Diego 2,689 2,870 Austin 759 759 Total 17,124 17,136 (1) Reconciliation of Net (loss) income available to common stockholders to Funds From Operations available to common stockholders and unitholders and management statement on Funds From Operations are included after the Consolidated Statements of Operations. (2) Reported amounts are attributable to common stockholders, common unitholders and restricted stock unitholders. (3) Calculated based on weighted average shares outstanding, including participating share-based awards (i.e., certain time-based restricted stock units) and assuming the exchange of all common limited partnership units outstanding. (4) Calculated based on weighted average shares outstanding, including participating and non-participating share-based awards, dilutive impact of contingently issuable shares, and assuming the exchange of all common limited partnership units outstanding. (5) Occupancy percentages and total square feet reported are based on the Company’s stabilized office portfolio for the periods presented. KILROY REALTY CORPORATION CONSOLIDATED BALANCE SHEETS (unaudited; in thousands) March 31, 2026 December 31, 2025 ASSETS Real Estate Assets Land $ 1,730,514 $ 1,641,913 Buildings and improvements 9,011,023 8,505,486 Undeveloped land and construction in progress 1,585,042 2,387,742 Total real estate assets held for investment 12,326,579 12,535,141 Accumulated depreciation and amortization (2,857,265 ) (2,843,811 ) Total real estate assets held for investment, net 9,469,314 9,691,330 Real estate and other assets held for sale, net 188,771 115,155 Cash and cash equivalents 192,904 179,316 Marketable securities 31,417 30,807 Current receivables, net 15,712 12,765 Deferred rent receivables, net 425,420 424,794 Deferred leasing costs and acquisition-related intangible assets, net 271,213 278,232 Right of use ground lease assets, net 127,834 128,116 Prepaid expenses and other assets, net 52,273 54,561 TOTAL ASSETS $ 10,774,858 $ 10,915,076 LIABILITIES AND EQUITY Liabilities: Secured debt, net $ 591,398 $ 592,685 Unsecured debt, net 3,997,993 3,996,774 Accounts payable, accrued expenses, and other liabilities 303,808 288,963 Ground lease liabilities 127,414 127,628 Accrued dividends and distributions 63,421 65,009 Deferred revenue and acquisition-related intangible liabilities, net 122,272 125,628 Rents received in advance and tenant security deposits 79,638 75,701 Liabilities related to real estate assets held for sale — 4,945 Total liabilities 5,285,944 5,277,333 Equity: Stockholders’ Equity Common stock 1,163 1,184 Additional paid-in capital 5,161,140 5,230,747 Retained earnings 102,859 188,876 Total stockholders’ equity 5,265,162 5,420,807 Noncontrolling Interests Common units of the Operating Partnership 51,328 51,911 Consolidated property partnerships 172,424 165,025 Total noncontrolling interests 223,752 216,936 Total equity 5,488,914 5,637,743 TOTAL LIABILITIES AND EQUITY $ 10,774,858 $ 10,915,076 KILROY REALTY CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited; in thousands, except per share data) Three Months Ended March 31, 2026 2025 Revenues Rental income $ 265,330 $ 266,244 Other property income 4,723 4,600 Total revenues 270,053 270,844 Expenses Property expenses 59,283 58,714 Real estate taxes 28,782 28,365 Ground leases 3,187 3,020 General and administrative expenses 20,699 16,901 Leasing costs 3,010 2,873 Depreciation and amortization 94,344 87,119 Total expenses 209,305 196,992 Other Income (Expenses) Interest income 954 1,134 Interest expense (38,511 ) (31,148 ) Other income (expense) 389 (157 ) Gains on sales of depreciable operating properties 23,525 — Impairment of real estate assets (61,778 ) — Total other expenses (75,421 ) (30,171 ) Net (loss) income (14,673 ) 43,681 Net loss (income) attributable to noncontrolling common units of the Operating Partnership 185 (375 ) Net income attributable to noncontrolling interests in consolidated property partnerships (4,779 ) (4,298 ) Total net income attributable to noncontrolling interests (4,594 ) (4,673 ) Net (loss) income available to common stockholders $ (19,267 ) $ 39,008 Weighted average shares of common stock outstanding – basic 117,637 118,195 Weighted average shares of common stock outstanding – diluted 117,637 118,664 Net (loss) income available to common stockholders per share – basic $ (0.16 ) $ 0.33 Net (loss) income available to common stockholders per share – diluted $ (0.16 ) $ 0.33 KILROY REALTY CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited; in thousands, except per share data) Three Months Ended March 31, 2026 2025 Cash flows from operating activities: Net (loss) income $ (14,673 ) $ 43,681 Adjustments to reconcile net (loss) income to net cash provided by operating activities: Depreciation and amortization of real estate assets and leasing costs 92,885 85,735 Depreciation of non-real estate furniture, fixtures, and equipment 1,459 1,384 Revenues deemed uncollectible 358 621 Non-cash amortization of deferred revenue related to tenant-funded tenant improvements (3,218 ) (3,688 ) Straight-line rents, net (701 ) 4,613 Non-cash amortization of net below-market rents (641 ) (846 ) Non-cash amortization of deferred financing costs and debt discounts 1,662 1,219 Non-cash amortization of share-based compensation awards 4,869 3,927 Amortization of right of use ground lease assets 282 273 Gains on sales of depreciable operating properties (23,525 ) — Impairment of real estate assets 61,778 — Net change in other operating assets 131 (21,886 ) Net change in other operating liabilities 30,029 21,888 Net cash provided by operating activities 150,695 136,921 Cash flows from investing activities: Expenditures for development and redevelopment properties and undeveloped land (102,647 ) (55,347 ) Expenditures for operating properties and other capital assets (29,945 ) (21,313 ) Net proceeds received from dispositions of real estate assets 141,440 — Non-refundable deposits received for future dispositions 6,200 — Net cash provided by (used in) investing activities 15,048 (76,660 ) Cash flows from financing activities: Distributions to noncontrolling interests in consolidated property partnerships (6,380 ) (7,226 ) Dividends and distributions paid to common stockholders and common unitholders (64,534 ) (64,366 ) Taxes paid upon net share settlement of restricted share units (6,970 ) (6,009 ) Principal payments and repayments of secured debt (1,600 ) (1,539 ) Repurchase of common stock (72,671 ) — Financing costs — (100 ) Net cash used in financing activities (152,155 ) (79,240 ) Net increase (decrease) in cash and cash equivalents 13,588 (18,979 ) Cash and cash equivalents, beginning of period 179,316 165,690 Cash and cash equivalents, end of period $ 192,904 $ 146,711 KILROY REALTY CORPORATION FUNDS FROM OPERATIONS (unaudited; in thousands, except per share data) Three Months Ended March 31, 2026 2025 Net (loss) income available to common stockholders $ (19,267 ) $ 39,008 Adjustments: Net loss (income) attributable to noncontrolling common units of the Operating Partnership (185 ) 375 Net income attributable to noncontrolling interests in consolidated property partnerships 4,779 4,298 Depreciation and amortization of real estate assets 92,885 85,735 Gains on sales of depreciable operating properties (23,525 ) — Impairment of real estate assets 61,778 — Funds From Operations attributable to noncontrolling interests in consolidated property partnerships (7,619 ) (7,106 ) Funds From Operations(1)(2)(3) $ 108,846 $ 122,310 Weighted average common shares/units outstanding – basic(4) 119,251 119,750 Weighted average common shares/units outstanding – diluted(5) 119,957 120,220 Funds From Operations per common share/unit – basic(2) $ 0.91 $ 1.02 Funds From Operations per common share/unit – diluted(2) $ 0.91 $ 1.02 (1) The Company calculates Funds From Operations available to common stockholders and common unitholders (“FFO”) 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. Management believes that FFO is a useful supplemental measure of the Company’s 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 the Company’s 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, the Company’s 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, management believes that FFO along with the required GAAP presentations provides a more complete measurement of the Company’s performance relative to its 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 the Company’s 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 the Company’s properties, which are significant economic costs and could materially impact the Company’s results from operations. (2) Reported amounts are attributable to common stockholders, common unitholders, and restricted stock unitholders. (3) FFO available to common stockholders and unitholders includes amortization of deferred revenue related to tenant-funded tenant improvements of $3.2 million and $3.7 million for the three months ended March 31, 2026 and 2025, respectively. (4) Calculated based on weighted average shares outstanding, including participating share-based awards (i.e., certain time-based restricted stock units) and assuming the exchange of all common limited partnership units outstanding. (5) Calculated based on weighted average shares outstanding, including participating and non-participating share-based awards, dilutive impact of contingently issuable shares, and assuming the exchange of all common limited partnership units outstanding. Doug Bettisworth Vice President, Corporate Finance (310) 481-8585 Source: Kilroy Realty Corporation Multimedia Files: Categories: Press Releases View all news