Kilroy Realty: Strong Q3 Performance Amidst Leasing Cost Concerns and Market UncertaintiesWe view 3Q25 as a net positive for KRC; the beat and raise was largely driven by lower expenses in the quarter (a win in our book), the company continues to make progress on its capital recycling program (trading buildings with upcoming expirations in an office complex in Beverly Hills), and leasing 84k SF at KOP Phase II thus far in 2H25. Additionally, KRC has made significant headway on its 2026 expirations, managing its exposure down from 11.8% of ABR at the start of 2025 to 6.7% by quarter end. On tomorrow's call, we look for management's commentary regarding AI leasing momentum in SFO, liquidity in CRE acquisition/ disposition markets, and the abnormally high tenant improvement allowances on KRC's 112k SF of first-generation leasing in the quarter (which, at $431.21/SF, were 194% higher than first-gen leasing costs through the first six months of 2025).