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Kilroy Realty (KRC)
NYSE:KRC
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Kilroy Realty
(NYSE:KRC)63Neutral
Positive Factors
Leasing Activity
KRC signed nearly 1.4M SF of leases for FY 2025, which is 14.2% higher than 2023 results.
Strategic Acquisitions
Kilroy's acquisition of Junction at Del Mar, with a high occupancy rate of 96.3%, suggests management's confidence in the outlook for its business.
Negative Factors
Occupancy Challenges
Occupancy continued to erode, active developments remain unleased, and 2025 guidance suggests tenant retention could fall short of the 30% level achieved in 2024.
Kilroy Realty (KRC) vs. S&P 500 (SPY)
Market Cap
$4.06B
Dividend Yield6.54%
Average Volume (3M)1.64M
Price to Earnings (P/E)19.2
Beta (1Y)1.65
Revenue Growth0.53%
EPS Growth-1.38%
CountryUS
Employees229
SectorReal Estate
Sector Strength72
IndustryREITs
Share Statistics
EPS (TTM)1.77
Shares Outstanding118,136,670
10 Day Avg. Volume1,482,529
30 Day Avg. Volume1,638,149
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)3.54
Price to Cash Flow (P/CF)9.30
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$42.91Price Target Upside28.78% Upside
Rating ConsensusHold
Number of Analyst Covering12
Kilroy Realty Business Overview & Revenue Model
Company DescriptionKilroy Realty Corporation (KRC) is a prominent real estate investment trust (REIT) specializing in the development, acquisition, and management of office and mixed-use properties. The company primarily operates in key urban markets along the West Coast, including Los Angeles, San Diego, the San Francisco Bay Area, and Greater Seattle. Kilroy Realty is committed to sustainability and innovation, with a focus on creating vibrant and environmentally responsible workspaces. Their portfolio features a diverse range of properties that cater to a variety of tenants, including technology, media, and entertainment companies.
How the Company Makes MoneyKilroy Realty generates revenue primarily through leasing office and mixed-use space to tenants. The company's income is derived from long-term lease agreements, providing a stable and predictable cash flow. As a REIT, Kilroy Realty benefits from favorable tax treatment, as it is required to distribute at least 90% of its taxable income to shareholders in the form of dividends. Additionally, the company actively engages in property development and acquisition, which can lead to increased rental income and capital appreciation over time. Kilroy Realty also focuses on maintaining high occupancy rates and managing operational costs effectively to maximize profitability. Strategic partnerships and relationships with key tenants in technology and creative industries further contribute to Kilroy's financial performance.
Kilroy Realty Financial Statement Overview
Summary
Kilroy Realty maintains stable financial health with moderate revenue growth and efficient cost management, though profitability has declined slightly. The balance sheet is strong with no debt, and cash flow is adequate but with limited conversion to free cash flow.Income Statement
Kilroy Realty's income statement shows moderate revenue growth of 0.5% from the previous year, indicating stability in its operations. The gross profit margin stands at 52.2%, reflecting efficient cost management. However, the net profit margin has decreased to 12.9% from 18.8% last year, highlighting a decline in profitability. The EBIT margin is 21.7%, which is relatively stable, but the EBITDA margin has decreased to 53.2%, suggesting increased operating expenses.65
Positive
Balance Sheet
Kilroy Realty's balance sheet demonstrates strong equity with a debt-to-equity ratio of 0, indicating no reliance on debt financing for the current period. The company's equity ratio is 42.5%, reflecting a solid equity base. Return on equity has decreased to 2.7% from last year’s 3.9%, pointing to reduced profitability on equity. Overall, the balance sheet remains robust with low financial risk.75
Positive
Cash Flow
The cash flow statement reveals a decline in free cash flow growth, with a significant increase to $151 million from last year's $59 million, representing a growth rate of 155.8%. The operating cash flow to net income ratio is 3.7, indicating strong cash generation relative to net income. However, free cash flow to net income ratio is only 1.03, suggesting limited conversion of profits to free cash flow.70
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.14B | 1.13B | 1.10B | 955.04M | 898.40M | Gross Profit |
| 783.24M | 778.62M | 775.93M | 685.46M | 637.68M | EBIT |
| -2.06M | 329.91M | 326.44M | 286.58M | 242.53M | EBITDA |
| 354.12M | 686.21M | 684.05M | 596.63M | 538.41M | Net Income Common Stockholders |
| -19.92M | 212.24M | 175.22M | 628.14M | 116.33M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 193.66M | 794.83M | 370.93M | 441.55M | 759.47M | Total Assets |
| 12.66B | 11.40B | 10.80B | 10.58B | 10.00B | Total Debt |
| 4.73B | 5.05B | 4.39B | 4.19B | 4.02B | Net Debt |
| 4.56B | 4.54B | 4.04B | 3.78B | 3.29B | Total Liabilities |
| 5.29B | 5.74B | 5.12B | 4.89B | 4.72B | Stockholders Equity |
| 5.38B | 5.43B | 5.44B | 5.44B | 5.03B |
| Cash Flow | Free Cash Flow | |||
| 40.17M | 58.77M | 5.63M | -1.28B | -160.47M | Operating Cash Flow |
| 541.15M | 602.59M | 592.24M | 516.40M | 455.59M | Investing Cash Flow |
| -225.04M | -800.40M | -553.19M | -747.88M | -542.13M | Financing Cash Flow |
| -660.58M | 360.60M | -118.75M | -164.57M | 833.32M |
Kilroy Realty Technical Analysis
Negative
33.32
Price Trends
37.04
Negative
38.59
Negative
36.12
Negative
Market Momentum
-0.97
Negative
37.80
Neutral
26.28
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KRC, the sentiment is Negative. The current price of 33.32 is below the 20-day moving average (MA) of 34.62, below the 50-day MA of 37.04, and below the 200-day MA of 36.12, indicating a bearish trend. The MACD of -0.97 indicates Negative momentum. The RSI at 37.80 is Neutral, neither overbought nor oversold. The STOCH value of 26.28 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for KRC.
Kilroy Realty Risk Analysis
Kilroy Realty disclosed 51 risk factors in its most recent earnings report. Kilroy Realty reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Kilroy Realty Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $17.69B | 56.80 | 1.70% | 5.20% | 7.99% | 232.16% | |
64 Neutral | $15.38B | 957.25 | 1.32% | 1.84% | -1.30% | -80.81% | |
63 Neutral | $4.06B | 19.22 | 3.87% | 6.54% | 0.53% | -1.38% | |
61 Neutral | $4.91B | 18.99 | -3.12% | 7.77% | 6.71% | -19.69% | |
60 Neutral | $11.77B | 748.67 | 0.23% | 5.88% | 4.10% | -92.47% | |
54 Neutral | $4.67B | 786.64 | 0.71% | 5.03% | 5.12% | ― | |
52 Neutral | $464.48M | ― | -11.53% | 3.31% | -11.47% | -89.12% |
* Real Estate Sector Average
Performance Comparison
KRC
Kilroy Realty
33.32
-0.13
-0.39%
ARE
Alexandria Equities
102.49
-18.69
-15.42%
BXP
Boston Properties
69.00
8.76
14.54%
HPP
Hudson Pacific Properties
3.15
-3.41
-51.98%
SLG
SL Green Realty
61.96
13.98
29.14%
VNO
Vornado Realty
39.75
14.48
57.30%
Kilroy Realty Earnings Call Summary
Earnings Call Date: Feb 10, 2025 | % Change Since: -9.43% | Next Earnings Date: Apr 23, 2025
Earnings Call Sentiment Neutral
The earnings call reflected a mix of strong leasing activity and strategic accomplishments, such as significant deals and investments, alongside challenges related to occupancy declines and development uncertainties. While there are positive signs of recovery and growth opportunities, there remain notable concerns about future occupancy and financial performance.Highlights
Strong Leasing Activity
Signed approximately 708,000 square feet of leases in Q4 2024, marking the highest level of leasing activity since Q4 2019.
Significant Deals Completed
Executed a multi-floor lease with Walmart at Skyline Tower in Bellevue, Washington, and a 274,000 square foot new lease in the San Francisco Bay Area with a global technology company.
Promising Future Growth
Vacant space at high-quality assets represented 410 basis points of leased occupancy upside at year-end, offering substantial growth potential.
Positive Transaction Market Outlook
Deal volume and financing levels were higher year-over-year, with core capital returning to the sector.
Investment in PropTech
Made a modest investment in Fifth Wall to better integrate technology into operations and drive efficiencies.
Lowlights
Decreased Occupancy Rates
Occupancy ended the year at 82.8%, with further declines expected in 2025 due to significant move-outs.
Challenges with Future Development Projects
Potential earnings implications in the second half of 2025 if planning for Flower Mart project concludes with development still unwarranted.
FFO Guidance Decline
The 2025 FFO guidance range is $3.85 to $4.05 per diluted share, reflecting a decrease in occupancy and same-property NOI growth projected to decline between negative 1.5% to negative 3%.
Interest Income Reduction
Interest income expected to drop significantly in 2025 from $38 million in 2024 to about $6 million.
Company Guidance
During the Kilroy Realty Corporation Fourth Quarter 2024 Earnings Conference Call, management provided guidance for 2025, outlining several key financial metrics. The company projects FFO to range between $3.85 and $4.05 per diluted share, with an expected midpoint of $3.95. Average occupancy is anticipated to be between 80% and 82%, reflecting a decrease of roughly 300 basis points from 2024 due to anticipated move-outs. Cash same-property NOI is forecasted to decline between 1.5% and 3%, impacted by a 50 basis point decrease from base rent and a 75 basis point decrease from net recoveries. Furthermore, non-cash GAAP NOI adjustments are expected to significantly reduce to between $2 million and $5 million, down from more than $20 million in 2024, due to leasing activity patterns. Overhead costs are projected to rise slightly, with a total of $83 million to $85 million, aligning with a more sustainable future run rate. The company's approach to capital allocation remains disciplined, with plans to monetize non-core assets and maintain a flexible balance sheet.Kilroy Realty Corporate Events
Business Operations and StrategyFinancial Disclosures
Kilroy Realty Reports Strong Q4 2024 Financial Results
Positive
Feb 10, 2025
Kilroy Realty Corporation announced its financial results for the fourth quarter and full year ending December 31, 2024, reporting strong leasing performance with over 700,000 square feet signed in Q4, the highest since 2019. The company achieved an increase in revenues and net income compared to the previous year, indicating a robust recovery in its markets, and completed key developments such as Kilroy Oyster Point Phase 2 and a strategic PropTech investment.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.