Kilroy Realty Q2 revenue falls on lower portfolio occupancy rates

Overview

• U.S. office landlord's Q2 revenue declined yr/yr but beat analyst expectations

• Net income and FFO fell from prior-year quarter

• Company completed $202 mln in residential asset sales and expanded credit facilities

Outlook

• Kilroy affirms full-year 2026 Nareit FFO guidance of $3.49 to $3.63 per diluted share

• Company revises 2026 total development spending guidance to approximately $150 mln

• Kilroy expects average full-year occupancy of 76.5% to 78.0% in 2026

Result Drivers

• LEASING SPREADS - Co said re-leasing spreads on second-generation space increased 27% on a GAAP basis and 16% on a cash basis, excluding leases signed on space vacant for more than a year

• ASSET SALES - Co completed $202 mln in residential asset sales, enhancing financial flexibility

Company press release: ID:nBw2NGWXta

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 3 "strong buy" or "buy", 11 "hold" and 2 "sell" or "strong sell"

• The average consensus recommendation for the commercial reits peer group is "buy."

• Wall Street's median 12-month price target for Kilroy Realty Corp is $38.00, about 3.6% below its July 24 closing price of $39.42

• The stock recently traded at 39 times the next 12-month earnings vs. a P/E of 64 three months ago

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)