KILROY REALTY CORP
For the period ended Sep 30, 2025. Filed Oct 28, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2025 · Filed Oct 28, 2025
KRC$35.82-1.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-06-30; filed 2025-07-29.
0001025996-25-000250
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-10-28.
0001628280-25-046780
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 279 previous paragraphs and 283 current paragraphs.
159 unchanged; 95 reworded; 26 added; 24 removed; 1 previous and 3 current paragraphs rearranged.
Tables are not compared: 27 previous and 27 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (26)
Current report
Leases Executed(1)
Current report
Stabilized Redevelopment Projects
Current report
During the nine months ended September 30, 2025, we completed and added the following redevelopment projects to our stabilized portfolio:
Current report
(1)Excludes development projects in the tenant improvement phase, our in-process development projects, and future development projects.
Current report
Percentage not meaningful.
Current report
•$4.2 million decrease in settlement and restoration fee income;
Current report
•$1.3 million increase in revenues, primarily from contractual and transient parking; and
Current report
•$2.3 million decrease in property expenses, primarily due to a decrease in insurance premiums, repairs and maintenance, and residential expenses; and
Current report
•A decrease in Net Operating Income of $0.2 million, or 28.0%, attributable to the Re/Development Properties.
Current report
•An increase in Net Operating Income of $1.7 million, attributable to the Acquisition Properties.
Current report
•A decrease of $4.6 million attributable to the Same Property Portfolio; and
Current report
•A decrease of $2.2 million attributable to the Disposition Properties; partially offset by
Current report
•An increase of $2.4 million attributable to the Acquisition Properties.
Current report
(1)Beginning January 1, 2025, the Company began excluding lease termination fees from the calculation of rental income for Net Operating Income. Net Operating Income as presented has been conformed to our new definition. The nine months ended September 30, 2025 and 2024 excludes $11.6 million and $4.6 million of lease termination fees from total Net Operating Income, respectively, related to the Same Property portfolio.
Current report
Percentage not meaningful.
Current report
(1)Beginning January 1, 2025, the Company began excluding lease termination fees from the calculation of rental income for Net Operating Income. The nine months ended September 30, 2025 and 2024 excludes $11.6 million and $4.6 million of lease termination fees from total Net Operating Income, respectively, related to the Same Property portfolio.
Current report
•$2.6 million decrease in settlement and restoration fee income; and
Current report
•$1.9 million increase in revenues primarily from transient parking and residential income.
Current report
•A decrease in Net Operating Income of $5.2 million, or 19.9%, attributable to the Disposition Properties; and
Current report
Depreciation and amortization decreased $4.8 million, or 1.8%, for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024, primarily due to the following:
Current report
(3) During the three months ended September 30, 2025, we elected to extend the maturity date by 12 months to October 3, 2026. The maturity date may be extended by an additional 12-month period, at the Operating Partnership’s election.
Current report
Unsecured Senior Notes - Registered Public Offering
Current report
In August 2025, the Operating Partnership issued $400.0 million aggregate principal amount of unsecured senior notes in a registered public offering. The outstanding balance of the unsecured senior notes is included in unsecured debt, net of an initial issuance discount of $4.0 million, on our consolidated balance sheets. The unsecured senior notes, which are scheduled to mature on October 15, 2035, require semi-annual interest payments each April and October based on a stated annual interest rate of 5.875%. The Operating Partnership may redeem the notes at any time, either in whole or in part, subject to the payment of an early redemption premium with respect to redemptions prior to July 15, 2035. On or after July 15, 2035, the Operating Partnership may redeem the notes at any time, either in whole or in part, at par. In September 2025, the Operating Partnership used the net proceeds from the issuance of the $400.0 million 5.875% unsecured senior notes to redeem the $400.0 million aggregate principal amount of our outstanding 4.375% unsecured senior notes.
Current report
(4)During the three months ended September 30, 2025, we exercised our option to extend the maturity date by 12 months to October 3, 2026. The maturity date may be extended by an additional 12-month period, at the Operating Partnership’s election.
Current report
(1)The maturity date may be extended by one 12-month period, at the Operating Partnership’s election.
Current report
(3) Includes the impact of an unused facility fee, amortization of deferred financing costs, and amortization of premiums/discounts. .
Removed paragraphs (24)
Previous report
(2)See Note 2 “Dispositions and Real Estate Held for Sale” to our consolidated financial statements included in this report for additional information.
Previous report
(4)The 2025 lease expiration represents 26,043 rentable square feet that expired on June 30, 2025.
Previous report
Leases Executed(1)(2)
Previous report
(2)During the three months ended June 30, 2025, 13 new leases totaling 123,963 rentable square feet were signed and commenced. During the six months ended June 30, 2025, 40 new leases totaling 241,827 rentable square feet were signed and commenced.
Previous report
In addition to the 3.2 million rentable square feet, or 19.2%, of unoccupied space in our stabilized portfolio as of June 30, 2025, leases representing approximately 12.4% of the occupied square footage of our stabilized portfolio are scheduled to expire during the remainder of 2025 and in 2026. The leases scheduled to expire during the remainder of 2025 and in 2026 represent approximately 1.6 million rentable square feet, or 10.3% of our total annualized base rental revenue. Adjusting for leases that have been backfilled or renewed by a subtenant as of June 30, 2025 but not yet commenced, the remaining 2025, 2026, and 2027 expirations would be 230,608, 1,301,948, and 998,251 square feet, respectively.
Previous report
In-Process Redevelopment - Tenant Improvement
Previous report
As of June 30, 2025, we had two redevelopment projects in the tenant improvement phase:
Previous report
•$2.2 million increase in restoration fee income in 2025;
Previous report
•An increase in Net Operating Income of $1.2 million, or 100.0%, attributable to the Acquisition Properties.
Previous report
•A decrease in Net Operating Income of $1.0 million, or 505.3%, attributable to the Development Properties.
Previous report
Depreciation and amortization increased $0.5 million, or 0.5%, for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024, primarily due to the following:
Previous report
•An increase of $1.0 million attributable to the Acquisition Properties; and
Previous report
•An increase of $0.5 million attributable to the Development Properties; partially offset by
Previous report
•A decrease of $0.7 million attributable to the Disposition & Held for Sale Properties.
Previous report
(1)Beginning January 1, 2025, the Company began excluding lease termination fees from the calculation of rental income for Net Operating Income. Net Operating Income as presented has been conformed to our new definition. The six months ended June 30, 2025 and 2024 excludes $11.3 million and $3.1 million of lease termination fees from total Net Operating Income, respectively, related to the Same Property portfolio.
Previous report
(1)Beginning January 1, 2025, the Company began excluding lease termination fees from the calculation of rental income for Net Operating Income. The six months ended June 30, 2025 and 2024 excludes $11.3 million and $3.1 million of lease termination fees from total Net Operating Income, respectively, related to the Same Property portfolio.
Previous report
•$2.9 million decrease in revenues from recoverable operating expenses, primarily related to a $1.5 million non-recurring reimbursement in 2024; and
Previous report
•$1.6 million increase due to increase in restoration fee income in 2025, partially offset by higher settlement fee income in 2024; and
Previous report
•A decrease in Net Operating Income of $2.7 million, or 15.8%, attributable to the Disposition & Held for Sale Properties.
Previous report
•An increase in Net Operating Income of $1.2 million, or 377.5%, attributable to the Development Properties.
Previous report
(3) The maturity date may be extended by two 12-month periods, at the Operating Partnership’s election.
Previous report
(4)The maturity date may be extended by two 12-month periods, at the Operating Partnership’s election.
Previous report
(1)The maturity date may be extended by two 12-month periods, at the Operating Partnership’s election.
Previous report
(3) Includes the amortization of deferred financing costs for the unsecured term loan facility, unsecured senior notes, and secured debt, as well as the unused facility fee on the unsecured revolving credit facility, and the amortization of discounts for the unsecured senior notes.
Reworded paragraphs (95)
Previous wording
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 Resource 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 wi…
Excerpt shortened here; the source contains the full paragraph.
Current wording
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 Resource 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 wi…
Excerpt shortened here; the source contains the full paragraph.
Previous wording
We are a self-administered REIT active in premier office, life science, and mixed-use property types in the United States. We own, develop, acquire, and manage real estate assets, consisting primarily of premier properties in Los Angeles, San Diego, the San Francisco Bay Area, Seattle, and Austin, which are markets we believe have strategic advantages and strong barriers to entry. We own our interests in all of our real estate assets through the Operating Partnership and conduct substantially all of our operations through the Operating Partnership. We owned an approximate 99.0% common general partnership interest in the Operating Partnership as of June 30, 2025 and December 31, 2024. As of June 30, 2025, all of our properties are held in fee except for the fourteen office buildings that are held subject to long-term ground leases.
Current wording
We are a self-administered REIT active in premier office, life science, and mixed-use property types in the United States. We own, develop, acquire, and manage real estate assets, consisting primarily of 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 strategic advantages and strong barriers to entry. We own our interests in all of our real estate assets through the Operating Partnership and conduct substantially all of our operations through the Operating Partnership. We owned an approximate 99.0% common general partnership interest in the Operating Partnership as of September 30, 2025 and December 31, 2024. As of September 30, 2025, all of our properties are held in fee except for the fourteen office buildings that are held subject to long-term ground leases.
Previous wording
As of June 30, 2025, our stabilized portfolio was comprised of 118 office, life science, and mixed-use buildings encompassing an aggregate of approximately 16.4 million rentable square feet and 1,001 residential units. Our stabilized portfolio includes all of our properties with the exception of development and redevelopment properties currently committed for construction, under construction, or in the tenant improvement phase, undeveloped land, and real estate assets held for sale, if any. We define redevelopment properties as those properties for which we expect to spend significant development and construction costs pursuant to a formal plan to change its use, the intended result of which is a higher economic return on the property. We define a property in the tenant improvement phase as a development or redevelopment property where the project has reached “cold shell condition” and is ready for tenant improvements, which may require additional major base building modifications before being placed in service. 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. Costs capitalized to construction in progress for development and redevelopment properties are transferred to land and improvements, buildings and improvements, and deferred leasing costs on our consolidated balance sheets as the projects or phases of projects are placed in service.
Current wording
As of September 30, 2025, our stabilized portfolio was comprised of 121 office, life science, and mixed-use buildings encompassing an aggregate of approximately 16.8 million rentable square feet and 1,001 residential units. Our stabilized portfolio includes all of our properties with the exception of development and redevelopment properties currently committed for construction, under construction, or in the tenant improvement phase, undeveloped land, and real estate assets held for sale, if any. We define redevelopment properties as those properties for which we expect to spend significant development and construction costs pursuant to a formal plan to change its use, the intended result of which is a higher economic return on the property. We define a property in the tenant improvement phase as a development or redevelopment property where the project has reached “cold shell condition” and is ready for tenant improvements, which may require additional major base building modifications before being placed in service. 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. Costs capitalized to construction in progress for development and redevelopment properties are transferred to land and improvements, buildings and improvements, and deferred leasing costs on our consolidated balance sheets as the projects or phases of projects are placed in service. We did not have any properties or undeveloped land held for sale at September 30, 2025.
Previous wording
(1)For the property classified as held for sale, represents actual rentable square feet and consists of four buildings. For the in-process development and redevelopment projects in the tenant improvement phase, represents estimated rentable square feet upon completion.
Current wording
(1)Represents estimated rentable square feet upon completion.
Previous wording
(1)Includes subsidiaries of the tenant listed. Excludes tenants at properties classified as held for sale.
Current wording
(1)Includes subsidiaries of the tenant listed.
Previous wording
(5)The 2026 lease expiration represents 49,255 rentable square feet that expires on September 30, 2026.
Current wording
(4)The 2026 lease expiration represents 49,255 rentable square feet that expires on September 30, 2026.
Previous wording
(6)The 2026 lease expiration represents 110,834 rentable square feet that expires on November 30, 2026.
Current wording
(5)The 2026 lease expiration represents 110,834 rentable square feet that expires on November 30, 2026. Subsequent to quarter end, the Company signed a 78,900 square foot renewal .
Previous wording
The amount of net rental income generated by our properties depends principally on our ability to maintain the occupancy rates of currently leased space and to lease currently available space, newly developed or redeveloped properties, newly acquired properties with vacant space, and space available from unscheduled lease terminations. 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 six months ended June 30, 2025:
Current wording
The amount of net rental income generated by our properties depends principally on our ability to maintain the occupancy rates of currently leased space and to lease currently available space, newly developed or redeveloped properties, newly acquired properties with vacant space, and space available from unscheduled lease terminations. 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, 2025:
Previous wording
(1)Includes 100% of consolidated property partnerships. Excludes leases with a lease term of less than one year.
Current wording
(1)Includes 100% of consolidated property partnerships. Excludes leases with a lease term of less than one year (i.e. short-term leases).
Previous wording
(3)Includes tenant improvements and third-party leasing commissions. Amounts exclude tenant-funded tenant improvements and indirect leasing costs.
Current wording
(2)Includes tenant improvements and third-party leasing commissions and excludes tenant-funded tenant improvements and indirect leasing costs.
Previous wording
(4)Calculated as the change between the expiring GAAP rent and the new GAAP rent for the same space. Space that was vacant when the property was acquired is excluded from our change in rents calculations to provide a more meaningful market comparison.
Current wording
(3)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 NNN) for comparability. Space that was vacant when the property was acquired is excluded from these calculations.
Previous wording
(5)Calculated as the change between the expiring cash rent and the new cash rent for the same space. Space that was vacant when the property was acquired is excluded from our change in rents calculations to provide a more meaningful market comparison.
Current wording
(4)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 NNN) for comparability. Space that was vacant when the property was acquired is excluded from these calculations.
Previous wording
(6)Represents leases executed at properties in the stabilized portfolio during the period, excluding leases with a lease term of less than one year. Excludes leases executed at space not previously leased at recently completed development projects that have been added to the stabilized portfolio and at space in the stabilized portfolio for which we are incurring significant non-recurring capital expenditures to reposition and is expected to result in additional revenue generated when re-leased. Tenant improvement and leasing commission capital expenditures for projects classified as Major Repositioning are captured in 2nd Gen Capital Expenditures.
Current wording
(5)Represents leases executed at properties in the stabilized portfolio during the period, excluding leases with a lease term of less than one year. Excludes leases executed at space not previously leased at recently completed development projects that have been added to the stabilized portfolio and at space in the stabilized portfolio for which we are incurring significant non-recurring capital expenditures to reposition and is expected to result in additional revenue generated when re-leased. Tenant improvement and leasing commission capital expenditures for projects classified as Major Repositioning are captured in 2nd Gen Capital Expenditures.
Previous wording
(7)Represents leases executed at space not previously leased, recently completed development projects that have been added to the stabilized portfolio, at space in the stabilized portfolio for which we are incurring significant non-recurring capital expenditures to reposition and is expected to result in additional revenue generated when re-leased, and at projects in our development and redevelopment portfolios.
Current wording
(6)Represents leases executed at space not previously leased, recently completed development projects that have been added to the stabilized portfolio, at space in the stabilized portfolio for which we are incurring significant non-recurring capital expenditures to reposition and is expected to result in additional revenue generated when re-leased, and at projects in our development and redevelopment portfolios.
Previous wording
(8)Calculated as the percentage of square footage renewed by existing tenants at lease expiration or termination divided by the square footage of space renewed by existing tenants and lease expirations during the period.
Current wording
(7)Calculated as the percentage of square footage renewed by existing tenants at lease expiration or termination divided by the square footage of space renewed by existing tenants and lease expirations during the period. Excludes square footage of short-term leases.
Previous wording
(9)Represents the retention rate, inclusive of leases with subtenants where the Company does not expect to experience significant downtime in occupancy between leases.
Current wording
(8)Represents the retention rate, inclusive of leases with subtenants where the Company does not expect to experience significant downtime in occupancy between leases.
Previous wording
(1)Represents all in-place leases as of June 30, 2025, except intercompany leases.
Current wording
(1)Represents all in-place leases as of September 30, 2025, excluding intercompany leases.
Previous wording
(4)Adjusting for leases that have been backfilled or renewed by a subtenant as of June 30, 2025 but not yet commenced, the 2025, 2026, and 2027 expirations would be reduced by 90,492, 1,272, and 5,875 square feet, respectively.
Current wording
Adjusting for leases that have been backfilled or renewed by a subtenant as of September 30, 2025 but not yet commenced, the remaining 2025, 2026, and 2027 expirations would be 124,324, 1,116,398, and 1,136,992 square feet, respectively.
Previous wording
Of our occupied space as of June 30, 2025, approximately 2.0 million rentable square feet, or 12.1% of the square footage in our stabilized portfolio, was available for sublease, primarily in the San Francisco Bay Area, in addition to the rentable square feet currently subleased. Of the approximately 2.0 million rentable square feet available for sublease as of June 30, 2025, approximately 18,663 rentable square feet representing one lease is scheduled to expire in 2025 and approximately 117,369 rentable square feet representing two leases are scheduled to expire in 2026.
Current wording
Of our occupied space as of September 30, 2025, approximately 1.8 million rentable square feet, or 10.5% of the square footage in our stabilized portfolio, was available for sublease, primarily in the San Francisco Bay Area, in addition to the rentable square feet currently subleased. Of the approximately 1.8 million rentable square feet available for sublease as of September 30, 2025, no leases are scheduled to expire in 2025 and approximately 117,369 rentable square feet representing two leases are scheduled to expire in 2026.
Previous wording
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, to finance development and redevelopment expenditures, to repay long-term debt, and for other general corporate purposes. We continue to evaluate strategic opportunities and remain a disciplined buyer of core, value-add, and strategic operating properties. We historically have focused on markets populated by knowledge and creative-based tenants in a variety of industries, including technology, entertainment, healthcare, life sciences, and business services. As part of our capital recycling strategy, we may attempt to enter into transactions intended to qualify as like-kind exchanges pursuant to Section 1031 of the Code (“Section 1031 Exchanges”), and other tax deferred transaction structures, when possible, to defer some or all of the taxable gains on the sales, if any, for federal and state income tax purposes. See the “Liquidity and Capital Resources of the Operating Partnership – Liquidity Sources” section for further discussion of our capital recycling activities.
Current wording
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, to finance development and redevelopment expenditures, to repay long-term debt, and for other general corporate purposes. We continue to evaluate strategic opportunities and remain a disciplined buyer of core, value-add, and strategic operating properties. We historically have focused on markets populated by knowledge and creative-based tenants in a variety of industries, including technology, media, healthcare, life sciences, and business services. As part of our capital recycling strategy, we may attempt to enter into transactions intended to qualify as like-kind exchanges pursuant to Section 1031 of the Code (“Section 1031 Exchanges”), and other tax deferred transaction structures, when possible, to defer some or all of the taxable gains on the sales, if any, for federal and state income tax purposes. See the “Liquidity and Capital Resources of the Operating Partnership – Liquidity Sources” section for further discussion of our capital recycling activities.
Previous wording
As of June 30, 2025, we had one operating property, comprised of four buildings, classified as held for sale, with an expected sales price of $365.0 million. The sale of this property is expected to close late in the third quarter of 2025. 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. We cannot assure that we will dispose of any additional properties, enter into any additional strategic ventures, or that we will be able to effect a Section 1031 Exchange or be able to use other tax deferred structures in connection with our strategy. See the “Liquidity and Capital Resources of the Operating Partnership – Liquidity Sources” section for further information.
Current wording
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. We cannot assure that we will dispose of any additional properties, enter into any additional strategic ventures, or that we will be able to effect a Section 1031 Exchange or be able to use other tax deferred structures in connection with our strategy. See the “Liquidity and Capital Resources of the Operating Partnership – Liquidity Sources” section for further information.
Previous wording
•4690 Executive Drive, University Towne Center, San Diego, California. In March 2022, we began the phased redevelopment of this property and completed base building components and moved the building to the tenant improvement phase during the third quarter of 2024. This project is comprised of approximately 52,000 square feet of life science space with a total estimated investment of $30.0 million, inclusive of the depreciated basis of the building. We expect this property to be added to the stabilized portfolio upon the completion of the 12-month lease up period which is expected to end in the third quarter of 2025. We executed one lease this quarter for one floor of the building, bringing the project to 47% leased.
Current wording
•4690 Executive Drive, University Towne Center, San Diego, California. In March 2022, we began the phased redevelopment of this property and completed base building components during the third quarter of 2024. This project is comprised of 52,074 square feet of life science space with a total estimated investment of $30.0 million, inclusive of the depreciated basis of the building. We added the building to the stabilized portfolio in the third quarter of 2025 upon reaching one year since substantial completion. The project is 47% leased.
Previous wording
•4400 Bohannon Drive, Menlo Park, California. In December 2022, we began the redevelopment of this property in the Other Peninsula submarket and completed base building components and moved the building to the tenant improvement phase during the third quarter of 2024. This project is comprised of approximately 48,000 square feet of life science space with a total estimated investment of $55.0 million, inclusive of the depreciated basis of the building. We expect this property to be added to the stabilized portfolio upon the completion of the 12-month lease up period which is expected to end in the third quarter of 2025.
Current wording
•4400 Bohannon Drive, Menlo Park, California. In December 2022, we began the redevelopment of this property in the Other Peninsula submarket and completed base building components during the third quarter of 2024. This project is comprised of 48,414 square feet of life science space with a total estimated investment of $55.0 million, inclusive of the depreciated basis of the building. We added the building to the stabilized portfolio in the third quarter of 2025 upon reaching one year since substantial completion.
Previous wording
•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 encompasses approximately 875,000 square feet of office and life science space across three buildings with a total estimated investment of $1.0 billion. We expect this property to be added to the stabilized portfolio upon the completion of the 12-month lease up period which is expected to end in the first quarter of 2026.
Current wording
•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 encompasses 871,738 square feet of office and life science space across three buildings with a total estimated investment of $1.0 billion. We expect this property to be added to the stabilized portfolio upon the completion of the 12-month lease up period which is expected to end in the first quarter of 2026. The project is 8% leased.
Previous wording
(3)Subject to a signed agreement and non-refundable deposit as of the date of this filing. Both development sites are anticipated to close upon receipt of entitlements, which is likely to occur in 2026.
Current wording
(3)Subject to a signed agreement and non-refundable deposit as of the date of this filing. Both development sites are anticipated to close upon receipt of entitlements, which is expected to occur in 2026.
Previous wording
As of June 30, 2025, there was approximately $33.4 million of total unrecognized compensation costs related to outstanding nonvested RSUs granted under share-based compensation arrangements. Such amount is based in part upon the estimated future outcome of the performance metrics as of June 30, 2025, and the actual compensation cost ultimately recognized could increase or decrease from this estimate based upon actual performance results. These costs are expected to be recognized over a weighted-average period of 2.0 years. The $33.4 million of unrecognized compensation cost does not reflect the future compensation costs for any share-based awards that may be granted subsequent to June 30, 2025. Share-based compensation expense for potential future awards could be affected by our operating and development performance, financial results, stock price, market conditions, and other factors. For additional information regarding our equity incentive awards, see Note 7 “Share-Based Compensation” to our consolidated financial statements included in this report.
Current wording
As of September 30, 2025, there was approximately $32.8 million of total unrecognized compensation costs related to outstanding nonvested RSUs granted under share-based compensation arrangements. Such amount is based in part upon the estimated future outcome of the performance metrics as of September 30, 2025, and the actual compensation cost ultimately recognized could increase or decrease from this estimate based upon actual performance results. These costs are expected to be recognized over a weighted-average period of 1.9 years. The $32.8 million of unrecognized compensation cost does not reflect the future compensation costs for any share-based awards that may be granted subsequent to September 30, 2025. Share-based compensation expense for potential future awards could be affected by our operating and development performance, financial results, stock price, market conditions, and other factors. For additional information regarding our equity incentive awards, see Note 8 “Share-Based Compensation” to our consolidated financial statements included in this report.
Previous wording
•Development Properties – includes the results generated by certain of our in-process development and redevelopment projects, and expenses for certain of our future development projects; and
Current wording
•Re/Development Properties – includes the results generated by certain of our in-process development and redevelopment projects, and 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;
Previous wording
•Acquisition Properties – includes the results, from the date of acquisition through the periods presented, for the one property acquired in the third quarter of 2024;
Current wording
•Acquisition Properties – includes the results, from the date of acquisition through the periods presented, for the one property acquired in the third quarter of 2024 and the one property acquired in the third quarter of 2025; and
Previous wording
•Disposition & Held for Sale Properties – includes the results of one property disposed of in the second quarter of 2025 and one property, comprised of four buildings, classified as held for sale as of June 30, 2025.
Current wording
•Disposition Properties – includes the results of the one property disposed of in the second quarter of 2025, and the one property, comprised of four buildings, disposed of in the third quarter of 2025.
Previous wording
(1)Beginning January 1, 2025, the Company began excluding lease termination fees from the calculation of rental income for Net Operating Income. Net Operating Income as presented has been conformed to our new definition. The three months ended June 30, 2025 and 2024 excludes $10.8 million and $1.5 million of lease termination fees from total Net Operating Income, respectively, related to the Same Property portfolio.
Current wording
(1)Beginning January 1, 2025, the Company began excluding lease termination fees from the calculation of rental income for Net Operating Income. Net Operating Income as presented has been conformed to our new definition. The three months ended September 30, 2025 and 2024 excludes $0.3 million and $1.5 million of lease termination fees from total Net Operating Income, respectively, related to the Same Property portfolio.
Previous wording
(1)Beginning January 1, 2025, the Company began excluding lease termination fees from the calculation of rental income for Net Operating Income. The three months ended June 30, 2025 and 2024 excludes $10.8 million and $1.5 million of lease termination fees from total Net Operating Income, respectively, related to the Same Property portfolio.
Current wording
(1)Beginning January 1, 2025, the Company began excluding lease termination fees from the calculation of rental income for Net Operating Income. The three months ended September 30, 2025 and 2024 excludes $0.3 million and $1.5 million of lease termination fees from total Net Operating Income, respectively, related to the Same Property portfolio.
Previous wording
Net Operating Income increased $2.8 million, or 1.5%, for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024, primarily resulting from:
Current wording
Net Operating Income decreased $6.5 million, or 3.3%, for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024, primarily resulting from:
Previous wording
•A decrease in Net Operating Income of $3.0 million, or 0.8%, attributable to the Same Property portfolio, which was driven by the following activity:
Current wording
•A decrease in Net Operating Income of $5.5 million, or 2.9%, attributable to the Same Property portfolio, which was driven by the following activity:
Previous wording
•A decrease in total operating revenues of $6.7 million, or 1.3%, primarily due to a(n):
Current wording
•A decrease in total operating revenues of $8.8 million, or 3.2%, primarily due to a(n):
Previous wording
•$1.2 million increase in net base rent, primarily due to a $6.2 million increase from higher rates and the above-mentioned $6.1 million increase in cash rent due to the burn-off of abated rent, partially offset by a net $11.1 million decrease due to lease expirations.
Current wording
•$2.7 million decrease in net base rent, primarily due to a $5.1 million decrease due to lease expirations and a $1.2 million decrease in cash rent due to newly commenced leases with rent abatements mainly in the San Diego, San Francisco Bay Area, and Los Angeles regions, partially offset by a $3.6 million increase from higher rates;
Previous wording
•$7.4 million increase in revenue associated with tenant creditworthiness considerations that resulted in higher non-recurring charges in 2024;
Current wording
•$1.2 million decrease in revenue associated with tenant creditworthiness considerations that resulted in higher non-recurring charges in 2025; and
Previous wording
•$12.1 million decrease in straight-line rent, primarily due to the burn-off of $6.1 million in abated rent, mainly in the San Francisco Bay Area and San Diego regions, and aging leases where cash rent now exceeds GAAP rent on a straight-line basis;
Current wording
•$0.8 million decrease in straight-line rent, primarily due to aging leases where cash rent now exceeds GAAP rent on a straight-line basis, partially offset by the above-mentioned $1.2 million increase due to newly commenced leases with rent abatements.
Previous wording
•A decrease in property and related expenses of $3.5 million, or 4.0%, primarily due to a(n):
Current wording
•A decrease in property and related expenses of $3.3 million, or 3.6%, primarily due to a(n):
Previous wording
•$3.9 million decrease in real estate taxes, primarily due to a net increase in refunds of $1.3 million received in 2025 and a $2.8 million decrease resulting from lower assessed property values.
Current wording
•$1.0 million decrease in real estate taxes, primarily due to a net increase in refunds of $1.3 million received in 2025, partially offset by a $0.3 million increase resulting from higher assessed property values.
Previous wording
•An increase in Net Operating Income of $2.4 million, or 100.0%, attributable to the Acquisition Properties.
Current wording
•A decrease in Net Operating Income of $2.4 million, or 28.2%, attributable to the Disposition Properties; and
Showing the first 40 of 95 pairs. Open the source sections for the rest.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
•$1.6 million decrease in amortization of deferred income and tenant funded improvements, mainly resulting from tenant move outs;
Current report — wording carried from elsewhere
•$0.4 million increase in revenues from recoverable operating expenses.
Current report — wording carried from elsewhere
•An increase in Net Operating Income of $4.0 million, attributable to the Acquisition Properties.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
•A decrease of $2.0 million attributable to the Same Property Portfolio, primarily due to early lease terminations and fully depreciated assets; and