KILROY REALTY CORP
For the period ended Mar 31, 2026. Filed Apr 28, 2026.
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.
Mar 31, 2026 · Filed Apr 28, 2026
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 2025-09-30; filed 2025-10-28.
0001628280-25-046780
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-04-28.
0001628280-26-028013
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 283 previous paragraphs and 220 current paragraphs.
90 unchanged; 89 reworded; 34 added; 88 removed; 16 previous and 7 current paragraphs rearranged.
Tables are not compared: 27 previous and 22 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 (34)
Current report
(1)See Note 2 “Dispositions and Real Estate Held for Sale” to our consolidated financial statements included in this report for additional information.
Current report
(1)Excludes Kilroy Sabre Springs, which was classified as held for sale as of December 31, 2025 and not included in the stabilized portfolio.
Current report
(2)Represents a recalculation of a property's rentable square footage using updated industry measurement standards.
Current report
(1)Kilroy Oyster Point Phase 2 (“KOP 2”) stabilized during the three months ended March 31, 2026. The total project was 5% occupied and 44% leased as of March 31, 2026.
Current report
(2) KOP 2 stabilized during the three months ended March 31, 2026. Excluding KOP 2, the average stabilized portfolio occupancy was 81.4% for the three months ended March 31, 2026.
Current report
Leasing
Current report
(4)Represents leases executed at projects in our development and redevelopment portfolios, as well as 1st Gen and Major Repositioning leasing.
Current report
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.
Current report
Stabilized Development Project
Current report
(3)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%.
Current report
(1)The average qualifying costs for the three months ended March 31, 2026 includes costs incurred for KOP 2 prior to stabilization.
Current report
(2)Primarily represents compensation costs capitalized to construction and development and redevelopment projects.
Current report
(3)Represents incidental property operating and carry costs capitalized to development and redevelopment projects.
Current report
Inflation
Current report
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.
Current report
◦One property, comprised of four buildings, acquired in the fourth quarter of 2025; and
Current report
•Disposition and Held for Sale Properties – includes the results of the following:
Current report
◦Two residential properties, totaling 393 residential units, classified as held for sale as of March 31, 2026.
Current report
(2)Excludes our residential property, measured in units.
Current report
•A decrease of $10.4 million, attributable to the Disposition and Held for Sale Properties; and
Current report
•A decrease of $2.7 million, attributable to the Re/Development Properties, primarily due to one development property added to the stabilized portfolio in the first quarter of 2026, which resulted in the cessation of cost capitalization.
Current report
•An increase of $6.0 million, attributable to the Acquisition Properties; and
Current report
•$0.7 million increase in transient parking income and residential income; and
Current report
•$0.3 million increase in property expenses and ground rent expense.
Current report
General and administrative expenses increased $3.8 million, or 22.5%, for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025, primarily due to an increase in compensation expense of $2.7 million resulting from increased headcount and a reduction in the amount of labor capitalized to development and redevelopment properties and capital improvement projects.
Current report
Depreciation and amortization increased $7.2 million, or 8.3%, for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025, primarily due to the following:
Current report
•An increase of $7.5 million attributable to a full quarter of expense related to the Acquisition Properties;
Current report
•An increase of $1.2 million attributable to the Same Property Portfolio, primarily due to revenue recognition commencing for one tenant in the Seattle region in the third quarter of 2025.
Current report
•A decrease of $6.1 million attributable to the Disposition and Held for Sale Properties.
Current report
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.
Current report
(3) The maturity date may be extended by a 12-month period, at the Operating Partnership’s election.
Current report
(4) In April 2026, repaid the outstanding $50.0 million of 4.300% Private Placement Senior Notes Series A due July 2026, at par. Refer to Note 16 “Subsequent Events” to our consolidated financial statements included in this report for additional information.
Current report
(4)The maturity date may be extended by a 12-month period, at the Operating Partnership’s election.
Current report
Share Repurchase Program
Removed paragraphs (88)
Previous report
(1)Represents estimated rentable square feet upon completion.
Previous report
(1)Includes four properties owned by consolidated property partnerships (see Note 1 “Organization, Ownership, and Basis of Presentation” to our consolidated financial statements included in this report for additional information).
Previous report
(2)Occupancy percentages reported are based on properties owned and stabilized as of January 1, 2024 and still owned and stabilized as of September 30, 2025, and exclude our residential portfolio. See discussion under “Results of Operations” for additional information.
Previous report
The following table sets forth information about our 20 largest tenants based upon annualized base rental revenues, as defined below, as of September 30, 2025:
Previous report
(1)Includes subsidiaries of the tenant listed.
Previous report
(3)Significant lease expirations include those greater than 25,000 rentable square feet.
Previous report
(4)The 2026 lease expiration represents 49,255 rentable square feet that expires on September 30, 2026.
Previous report
(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 report
Sublease Space
Previous report
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 report
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 report
In connection with our capital recycling strategy, we may have one or more potential acquisitions of properties and/or undeveloped land under consideration that are in varying stages of negotiation and due diligence review, or under contract, at any point in time. However, we cannot guarantee that we will enter into any agreements to acquire properties or undeveloped land, or that the potential acquisitions contemplated by any agreements we may enter into in the future will be completed. In addition, acquisitions are subject to various risks and uncertainties, and we may be unable to complete an acquisition after making a nonrefundable deposit or incurring acquisition-related costs.
Previous report
We believe that a portion of our long-term future growth will indirectly continue to come from the completion of our in-process development and redevelopment projects and, subject to market conditions, from identifying new redevelopment opportunities and executing on our future development pipeline. Our future development pipeline may also expand in the future through targeted acquisitions of development opportunities on the West Coast and in Austin, Texas, subject to market conditions.
Previous report
We have a proactive planning process by which we continually evaluate the size, timing, costs, and scope of our development and redevelopment programs and, as necessary, scale activity to reflect the economic conditions and the real estate fundamentals that exist in our submarkets. We expect to execute on our development and redevelopment programs with prudence and will be pursuing opportunities with attractive economic returns in strategic locations with proximity to public transportation or transportation access, retail amenities, and in markets with strong fundamentals and visible demand. We generally plan to develop projects in phases, as appropriate, and we favor starting projects with significant pre-leasing activity.
Previous report
Stabilized Redevelopment Projects
Previous report
•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 report
•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 report
In-Process Development - Tenant Improvement
Previous report
As of September 30, 2025, we had one development project in the tenant improvement phase:
Previous report
The following table sets forth information about our future development pipeline:
Previous report
(4)Approximately five acres of the 22-acre future development site is under contract.
Previous report
Incentive Compensation
Previous report
Our Executive Compensation Committee determines compensation, including cash bonuses and equity incentives, for our executive officers, as defined in Rule 16 under the Exchange Act. For 2025, the annual cash bonus program was structured to allow the Executive Compensation Committee to evaluate the Company’s performance against pre-established goals under a variety of key quantitative and qualitative metrics at the end of the year and make a determination based on the Company’s and management’s overall performance. Our Executive Compensation Committee also grants equity incentive awards from time to time that include performance-based and/or market-measure-based vesting requirements and time-based vesting requirements. As a result, accrued incentive compensation and compensation expense for future awards may be affected by our operating and development performance, financial results, stock price, market conditions, liquidity measures, and other factors. Consequently, we cannot predict the amounts that will be recorded in future periods related to such incentive compensation.
Previous report
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 report
(1)Commencing 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.
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 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 report
Percentage not meaningful.
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 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 report
•A decrease in total operating revenues of $8.8 million, or 3.2%, primarily due to a(n):
Previous report
•$1.3 million increase in revenues, primarily from contractual and transient parking; and
Previous report
•$2.3 million decrease in property expenses, primarily due to a decrease in insurance premiums, repairs and maintenance, and residential expenses; and
Previous report
•A decrease in Net Operating Income of $2.4 million, or 28.2%, attributable to the Disposition Properties; and
Previous report
•A decrease in Net Operating Income of $0.2 million, or 28.0%, attributable to the Re/Development Properties.
Previous report
•An increase in Net Operating Income of $1.7 million, attributable to the Acquisition Properties.
Previous report
Unallocated Expenses and Income
Previous report
General and administrative expenses remained generally consistent for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024.
Previous report
Depreciation and amortization decreased $4.4 million, or 4.8%, for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024, primarily due to the following:
Previous report
•A decrease of $2.2 million attributable to the Disposition Properties; partially offset by
Previous report
•An increase of $2.4 million attributable to the Acquisition Properties.
Previous report
Net Income Attributable to Noncontrolling Interests in Consolidated Property Partnerships
Showing the first 40 of 88 passages. Open the source sections for the rest.
Reworded paragraphs (89)
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 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, whic…
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 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.
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, 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 in as of March 31, 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 March 31, 2026, 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 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.
Current wording
As of March 31, 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.
Previous wording
As of September 30, 2025, the following properties were excluded from our stabilized portfolio:
Current wording
As of March 31, 2026, the following assets were excluded from our stabilized portfolio:
Previous wording
Our stabilized portfolio also excludes our future development pipeline, which, as of September 30, 2025, was comprised of eight potential development sites, representing approximately 64 gross acres of undeveloped land, on which we believe we could develop more than 6.0 million rentable square feet of office space and approximately 1,750 residential units.
Current wording
Our stabilized portfolio also excludes our future development pipeline, which, as of March 31, 2026, was comprised of nine potential development sites.
Previous wording
The following table reconciles the changes in the rentable square feet in our stabilized office portfolio of operating properties from September 30, 2024 to September 30, 2025:
Current wording
The following table reconciles the changes in the rentable square feet in our stabilized portfolio of operating properties from December 31, 2025 to March 31, 2026, inclusive of four properties owned by the Consolidated Property Partnerships and excluding our residential portfolio:
Previous wording
The following table sets forth certain information regarding our stabilized portfolio as of the end of the period presented:
Current wording
The following table sets forth certain information regarding our stabilized portfolio, excluding our residential portfolio, as of the end of the period presented:
Previous wording
(3)Our residential portfolio consists of our 200-unit residential tower and 193-unit Jardine property in Hollywood, California and 608 residential units at our One Paseo mixed-use property in Del Mar, California.
Current wording
(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.
Previous wording
Refer to our 2024 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, 2025.
Current wording
Refer to our 2025 Annual Report on Form 10-K for information about our 20 largest tenants. There have been no significant changes to these 20 largest tenants outside of the ordinary course of business during the three months ended March 31, 2026.
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 nine months ended September 30, 2025:
Current wording
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 months ended March 31, 2026:
Previous wording
(1)Includes 100% of consolidated property partnerships. Excludes leases with a lease term of less than one year (i.e. short-term leases).
Current wording
(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 March 31, 2026, the Company signed 70,154 square feet of short-term leases, comprised of 32,537 square feet of new leasing on vacant space and 37,617 square feet of renewal leasing.
Previous 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.
Current wording
(3)Represents leases executed at properties in the stabilized portfolio during the period, excluding short-term leases. Excludes leases executed at space that was vacant when the property was acquired and space not previously leased at recently completed development projects that have been added to the stabilized portfolio (“1st Gen”) and 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 (“Major Repositioning”). Tenant improvement and leasing commission capital expenditures for projects classified as Major Repositioning are captured in 2nd Gen Capital Expenditures.
Previous 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.
Current wording
(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.
Previous 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.
Current wording
(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.
Previous 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.
Current wording
(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.
Previous 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.
Current wording
(8)Represents the retention rate, inclusive of leases with subtenants where the Company does not expect to experience downtime in occupancy between leases.
Previous wording
The following tables set forth certain information regarding our scheduled lease expirations for our stabilized portfolio, excluding our residential properties, for the remainder of 2025 and the next five years and by region for the remainder of 2025 and in 2026:
Current wording
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:
Previous wording
(2)Includes 100% of annualized base rent of consolidated property partnerships.
Current wording
(2)Includes 100% of annualized base rent of the Consolidated Property Partnerships.
Previous wording
(2)Annualized base rental revenue is calculated as the annualized monthly contractual rents from existing tenants, 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. Includes 100% of the annualized base rental revenues of consolidated property partnerships.
Current wording
(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.
Previous 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.
Current wording
Adjusting for leases that have been backfilled or released to a subtenant as of March 31, 2026 but not yet commenced, the remaining 2026, 2027, and 2028 expirations would be 727,003, 988,946, and 1,241,431 square feet, respectively.
Previous wording
Our rental rates and occupancy are impacted by general economic conditions, including the pace of regional economic growth and access to capital. Therefore, we cannot guarantee that leases will be renewed or that available space will be re-leased at rental rates equal to or above the current market rates.
Current wording
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.
Previous wording
During the nine months ended September 30, 2025, we completed and added the following redevelopment projects to our stabilized portfolio:
Current wording
During the three months ended March 31, 2026, we completed and added the following development project to our stabilized portfolio:
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 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.
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 $1.2 billion. We added the property to the stabilized portfolio upon reaching one year since substantial completion. The project is 5% occupied and 44% leased.
Previous wording
As of September 30, 2025, our future development pipeline included eight future projects located in Los Angeles, San Diego, the San Francisco Bay Area, Seattle, and Austin with an aggregate cost basis of approximately $1.5 billion, at which we believe we could develop more than 6.0 million rentable square feet of office space and approximately 1,750 residential units.
Current wording
As of March 31, 2026, our future development pipeline included the following projects:
Previous wording
(2)Represents costs incurred, net of municipal bonds proceeds received related to public infrastructure improvements, including accrued liabilities in accordance with GAAP, as of September 30, 2025.
Current wording
(2)Represents costs incurred, including accrued liabilities in accordance with GAAP.
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 expected to occur in 2026.
Current wording
(4)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 2026.
Previous wording
Fluctuations in our development activities could cause fluctuations in the average development asset balances qualifying for interest and other carrying cost and internal cost capitalization in future periods. A slowdown in development activities could result in fewer projects qualifying for interest capitalization under GAAP, resulting in higher interest expense. The following table sets forth our capitalized interest and internal overhead cost capitalization in our stabilized portfolio:
Current wording
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:
Previous wording
Management internally evaluates the operating performance and financial results of our stabilized portfolio based on Net Operating Income. We define “Net Operating Income” as consolidated operating revenues (rental income and other property income) less consolidated operating expenses (property expenses, real estate taxes, and ground leases). Commencing January 1, 2025, the Company also began excluding lease termination fees from the calculation of rental income for Net Operating Income as they are non-recurring in nature and its exclusion will provide a measure that we believe is more indicative of our core operating performance. Historical amounts for Net Operating Income have been revised to conform with current period presentation.
Current wording
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 leases).
Previous wording
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 to understand the core operations of our properties excluding corporate and financing-related costs and non-cash depreciation and amortization. Net Operating Income is an unlevered operating performance metric of our properties and allows for a useful comparison of the operating performance of individual assets or groups of assets. This measure thereby provides an operating perspective 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.
Current wording
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 to understand the core operations of our properties. Net Operating Income is an unlevered operating performance metric of our properties and 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.
Previous wording
•Same Property Portfolio – includes the consolidated results of all of the 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, 2024 and still owned and included in the stabilized portfolio as of September 30, 2025, including our three residential properties in Hollywood and Del Mar, California;
Current wording
•Same Property Portfolio – includes the consolidated results of all of the 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 March 31, 2026, including our residential property in San Diego, California;
Previous 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;
Current wording
•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 property added to the stabilized portfolio in the first quarter of 2026;
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 and the one property acquired in the third quarter of 2025; and
Current wording
•Acquisition Properties – includes the results, from the date of acquisition through the periods presented, of the following:
Previous 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.
Current wording
◦One property disposed of in the second quarter of 2025;
Previous wording
The following table sets forth certain information regarding the property groups within our stabilized office portfolio as of September 30, 2025:
Current wording
The following table sets forth certain information regarding the property groups within our stabilized portfolio as of March 31, 2026:
Previous wording
The following table summarizes our Net Operating Income for our total portfolio for the three months ended September 30, 2025 and 2024:
Current wording
The following table summarizes our Net Operating Income for our total portfolio:
Previous 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:
Current wording
Net Operating Income decreased $1.8 million, or 1.0%, for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025, primarily resulting from:
Previous 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:
Current wording
•An increase of $5.3 million, or 3.2%, attributable to the Same Property Portfolio, which was driven by the following activity:
Previous wording
•A decrease in total operating revenues of $15.5 million, or 1.9%, primarily due to a(n):
Current wording
•An increase in total operating revenues of $4.6 million, or 1.9%, primarily due to a(n):
Previous 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.
Current wording
•$3.1 million increase in straight-line rent, primarily due to a $6.0 million increase from newly commenced leases with rent abatements, partially offset by aging leases where cash rent now exceeds GAAP rent on a straight-line basis;
Previous wording
•$6.2 million increase in revenue associated with tenant creditworthiness considerations that resulted in higher non-recurring charges in 2024; and
Current wording
•$1.9 million increase in revenue associated with tenant creditworthiness considerations that resulted in higher non-recurring charges in 2025;
Showing the first 40 of 89 pairs. Open the source sections for the rest.
Rearranged current paragraphs (7)
Current report — wording carried from elsewhere
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 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.
Current report — wording carried from elsewhere
(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 March 31, 2026.
Current report — wording carried from elsewhere
◦One property acquired in the third quarter of 2025; and
Current report — wording carried from elsewhere
◦One property, comprised of four buildings, disposed of in the third quarter of 2025;
Current report — wording carried from elsewhere
◦One property disposed of in the fourth quarter of 2025;
Current report — wording carried from elsewhere
◦Two properties, comprised of four buildings, disposed of in the first quarter of 2026; and
Current report — wording carried from elsewhere
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 three months ended March 31, 2026, with the exception of the additional development commitments for 1900 Broadway. As of March 31, 2026, we have committed to contribute $225.0 million to $245.0 million toward this project through 2030, of which, $20.0 million to $30.0 million is expected to be spent in 2026.
Rearranged previous paragraphs (16)
Previous report — wording carried elsewhere
(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 report — wording carried elsewhere
(3)Represents annualized monthly contractual rents from existing tenants, 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. Additionally, the underlying leases contain various expense structures including full service gross, modified gross, and triple net. Amounts represent percentage of total portfolio annualized contractual base rental revenue. For additional information on tenant improvement and leasing commission costs incurred by the Company for the current reporting period, please see further discussion under the caption “Leases Executed.”
Previous report — wording carried elsewhere
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 report — wording carried elsewhere
•$1.2 million decrease in revenue associated with tenant creditworthiness considerations that resulted in higher non-recurring charges in 2025; and
Previous report — wording carried elsewhere
The following table summarizes our Net Operating Income for our total portfolio for the nine months ended September 30, 2025 and 2024:
Previous report — wording carried elsewhere
The following tables summarize our Net Operating Income for our total portfolio for the nine months ended September 30, 2025 and 2024:
Previous report — wording carried elsewhere
•A decrease in Net Operating Income of $8.5 million, or 1.6%, attributable to the Same Property portfolio, which was driven by the following activity:
Previous report — wording carried elsewhere
•$13.0 million decrease in straight-line rent, primarily due to the burn-off of $4.9 million in abated rent, mainly in the San Francisco Bay Area, Los Angeles, and San Diego regions, and aging leases where cash rent now exceeds GAAP rent on a straight-line basis;
Previous report — wording carried elsewhere
•$3.5 million decrease in amortization of deferred revenue and tenant funded improvements, mainly resulting from tenant move outs;
Previous report — wording carried elsewhere
•$2.6 million decrease in revenues from recoverable operating expenses;
Previous report — wording carried elsewhere
•$2.6 million decrease in settlement and restoration fee income; and
Previous report — wording carried elsewhere
•A decrease in property and related expenses of $7.0 million, or 2.6%, primarily due to a(n):
Previous report — wording carried elsewhere
•$5.0 million decrease in real estate taxes, primarily due to a net increase in refunds of $2.6 million received in 2025 and a $2.4 million decrease resulting from lower assessed property values; and
Previous report — wording carried elsewhere
The following table sets forth our gross interest expense and capitalized interest for the nine months ended September 30, 2025 and 2024:
Previous report — wording carried elsewhere
Capitalized interest increased $3.3 million, or 5.4%, for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024, primarily due to an increase in the average aggregate cost basis on in-process development and redevelopment projects and future development pipeline projects during the nine months ended September 30, 2025. 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 IA. Risk Factors” in our annual report on Form 10-K for the year ended December 31, 2024.
Previous report — wording carried elsewhere
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.