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Kilroy Realty (KRC)
NYSE:KRC
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Kilroy Realty (KRC) AI Stock Analysis

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Kilroy Realty

(NYSE:KRC)

Rating:75Outperform
Price Target:
$41.00
▲(9.89%Upside)
Kilroy Realty has a solid overall stock score of 75, driven by strong technical indicators and positive sentiment from the recent earnings call. Despite some financial performance concerns, such as declining cash reserves and high P/E ratio, the company's strategic initiatives and robust dividend yield contribute to its appeal. The focus on operational flexibility and strategic capital allocation further supports its position in the market.
Positive Factors
Management and Market Positioning
KRC has a strong management team and is located in markets poised to benefit from AI adoption and a return from Big Tech tenants.
Negative Factors
Financial Performance
KRC faces headwinds from its $2.5B development pipeline with capitalized interest rolling off, which could impact financial performance.
Occupancy Rates
KRC's average office occupancy fell to 81.4%, with further declines expected, indicating potential challenges in maintaining occupancy levels.

Kilroy Realty (KRC) vs. SPDR S&P 500 ETF (SPY)

Kilroy Realty Business Overview & Revenue Model

Company DescriptionKilroy Realty Corporation (KRC) is a prominent real estate investment trust (REIT) that specializes in the ownership, development, and management of high-quality office and mixed-use properties. Headquartered in Los Angeles, California, the company primarily focuses on markets along the West Coast of the United States, including Los Angeles, San Francisco, San Diego, and Seattle. Kilroy Realty is known for its commitment to sustainability and innovation, offering state-of-the-art workspaces that cater to technology, media, and entertainment sectors, among others.
How the Company Makes MoneyKilroy Realty generates revenue primarily through its property portfolio, which includes leasing office and mixed-use spaces to a diverse range of tenants. The company's income is primarily derived from rental revenues collected under long-term lease agreements with tenants. Additionally, Kilroy Realty engages in the development and redevelopment of properties, which can contribute to revenue growth through property sales or increased rental income from enhanced or newly developed spaces. The company's strategic focus on sustainable and innovative property solutions also helps attract high-profile tenants, thus contributing to stable and potentially increasing cash flows.

Kilroy Realty Earnings Call Summary

Earnings Call Date:May 05, 2025
(Q1-2025)
|
% Change Since: 18.90%|
Next Earnings Date:Jul 28, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed outlook. On the positive side, strong leasing activity in San Francisco, driven by the burgeoning AI industry, and a significant land sale agreement were highlighted. However, challenges include declining occupancy, negative re-leasing spreads, and macroeconomic uncertainty affecting future leasing activity. The sentiment remains cautious given the regulatory challenges in the life sciences sector.
Q1-2025 Updates
Positive Updates
Strong Leasing Activity and Pipeline in San Francisco
A nearly 60,000 square foot lease with a technology company in San Francisco, representing the largest lease execution in the city since 2019. A 60% year-over-year increase in tour activity in the San Francisco portfolio was reported, indicating strong visibility on the future pipeline.
AI Industry Growth Driving Demand
The burgeoning AI industry is significantly contributing to office demand, with a 34,000 square foot expansion for a data analytics and AI tenant in Seattle.
Positive Developments in San Francisco
San Francisco's crime rate is now the lowest in 23 years, contributing to growing foot traffic and the re-amenitization of major office corridors.
Successful Sustainability Initiatives
The company published its annual sustainability report with new goals to be achieved by 2030, maintaining leadership in corporate responsibility.
Significant Land Sale Agreement
An agreement to sell a portion of the Santa Fe Summit site in San Diego for $38 million, with projected gross proceeds from future land sales expected to exceed $150 million.
Negative Updates
Occupancy Decline
Occupancy ended the quarter at 81.4%, down from 82.8% at the end of the previous year, driven by known move-outs including a significant 81,000 square foot move-out in the second quarter.
Negative Re-Leasing Spreads
GAAP re-leasing spreads were negative 15.8%, while cash re-leasing spreads were negative 23%, impacted by a single large transaction with a lower base rent.
Macroeconomic Uncertainty
The environment is defined by volatility, with macroeconomic uncertainty impacting office demand and capital allocation.
Regulatory Challenges in Life Science Sector
Market volatility has dampened enthusiasm around public market financing for life sciences, with a complex policy and regulatory outlook.
Company Guidance
During the Kilroy Realty Corporation's 1Q '25 earnings call, management provided updated guidance for 2025, highlighting several key metrics. The forward leasing pipeline saw a 40% year-over-year improvement in tour activity, driven largely by a 60% increase in San Francisco, indicative of a strengthening office demand as the city experiences its lowest crime rate in 23 years. The company also completed a 60,000 square foot lease with a technology firm in San Francisco and a 34,000 square foot expansion for an AI tenant in Seattle, underscoring the burgeoning AI industry's impact on leasing activity. While cash same-property NOI declined by 160 basis points year-over-year and occupancy decreased to 81.4%, Kilroy reaffirmed its full-year guidance, including FFO and cash same-property NOI growth, with a focus on maintaining operational flexibility and strategic capital allocation.

Kilroy Realty Financial Statement Overview

Summary
Kilroy Realty demonstrates a stable financial position with steady margins and prudent debt management. The income statement shows solid gross and net profit margins, though revenue growth is slightly negative. The balance sheet is strong, with a reasonable debt-to-equity ratio and high equity ratio, but declining cash reserves are a concern. Cash flow is stable, with efficient cash conversion, but needs improvement in free cash flow generation.
Income Statement
75
Positive
Kilroy Realty's income statement shows moderate stability and growth. The TTM gross profit margin is solid at 66.8%, though we've seen a slight decline in revenue with a recent negative growth rate of -0.68%. The net profit margin stands at 17.74%, indicating healthy profitability levels. However, the EBIT and EBITDA margins are consistent, which is a positive sign for operational efficiency.
Balance Sheet
70
Positive
The company's balance sheet appears stable with a debt-to-equity ratio of 0.88, which is reasonable for a REIT. Equity ratio is strong at 49.23%, demonstrating a well-capitalized structure, though the return on equity is relatively moderate at 3.74% TTM. The overall leverage is manageable, but the declining cash reserves could pose a risk if not addressed.
Cash Flow
68
Positive
Cash flow analysis shows a decrease in free cash flow growth, with a TTM free cash flow of $34.04 million, down from the previous period. The operating cash flow to net income ratio is favorable at 2.55, reflecting efficient cash conversion, though the free cash flow to net income ratio is low. Overall, the cash flow situation is stable but shows room for improvement in free cash flow generation.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue1.14B1.13B1.10B955.04M898.40M
Gross Profit783.24M778.62M775.93M685.46M637.68M
EBITDA735.49M708.81M640.75M553.33M538.41M
Net Income210.97M212.24M232.62M628.14M187.10M
Balance Sheet
Total Assets10.90B11.40B10.80B10.58B10.00B
Cash, Cash Equivalents and Short-Term Investments193.66M510.16M347.38M441.55M759.47M
Total Debt4.73B5.05B4.39B4.19B4.02B
Total Liabilities5.29B5.74B5.12B4.89B4.72B
Stockholders Equity5.38B5.43B5.44B5.44B5.03B
Cash Flow
Free Cash Flow40.17M58.77M5.63M-1.28B-160.47M
Operating Cash Flow541.15M602.59M592.24M516.40M455.59M
Investing Cash Flow-225.04M-800.40M-553.19M-747.88M-542.13M
Financing Cash Flow-660.58M360.60M-118.75M-164.57M833.32M

Kilroy Realty Technical Analysis

Technical Analysis Sentiment
Positive
Last Price37.31
Price Trends
50DMA
33.89
Positive
100DMA
32.86
Positive
200DMA
35.23
Positive
Market Momentum
MACD
0.92
Negative
RSI
70.13
Negative
STOCH
76.84
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KRC, the sentiment is Positive. The current price of 37.31 is above the 20-day moving average (MA) of 35.50, above the 50-day MA of 33.89, and above the 200-day MA of 35.23, indicating a bullish trend. The MACD of 0.92 indicates Negative momentum. The RSI at 70.13 is Negative, neither overbought nor oversold. The STOCH value of 76.84 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 (54)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
KRKRC
75
Outperform
$8.71B21.943.69%5.79%1.11%-3.07%
HIHIW
66
Neutral
$3.27B18.977.21%6.56%-2.01%31.64%
DEDEI
65
Neutral
$3.14B48.852.49%4.90%-1.98%
CUCUZ
63
Neutral
$4.74B84.321.15%4.54%10.93%-31.07%
BXBXP
61
Neutral
$11.99B732.74-0.10%5.68%3.74%-102.51%
SLSLG
58
Neutral
$4.58B663.10-0.35%5.10%14.21%79.46%
54
Neutral
$1.19B3.640.13%6.72%-2.13%-128.06%
* Real Estate Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
KRC
Kilroy Realty
37.31
3.34
9.83%
BXP
Boston Properties
69.01
3.50
5.34%
CUZ
Cousins Properties
28.21
4.49
18.93%
DEI
Douglas Emmett
15.51
0.78
5.30%
HIW
Highwoods Properties
30.51
3.61
13.42%
SLG
SL Green Realty
59.83
-0.05
-0.08%

Kilroy Realty Corporate Events

Executive/Board ChangesShareholder Meetings
Kilroy Realty Holds 2025 Annual Stockholders Meeting
Neutral
May 20, 2025

Kilroy Realty Corporation held its 2025 annual meeting of stockholders on May 20, 2025. During the meeting, all director nominees were elected to serve until the 2026 annual meeting, the compensation of the Company’s named executive officers was approved on an advisory basis, and Deloitte & Touche LLP was ratified as the independent auditor for the fiscal year ending December 31, 2025.

The most recent analyst rating on (KRC) stock is a Buy with a $49.00 price target. To see the full list of analyst forecasts on Kilroy Realty stock, see the KRC Stock Forecast page.

Executive/Board Changes
Kilroy Realty Announces Departure of Chief Accounting Officer
Neutral
May 14, 2025

Kilroy Realty announced that Merryl Werber, the Senior Vice President, Chief Accounting Officer, and Controller, will leave the company on January 9, 2026, to pursue other opportunities. The company has started the search for her replacement, and her departure is not due to any disagreements over financial statements or accounting practices.

The most recent analyst rating on (KRC) stock is a Buy with a $49.00 price target. To see the full list of analyst forecasts on Kilroy Realty stock, see the KRC Stock Forecast page.

Business Operations and StrategyFinancial Disclosures
Kilroy Realty Reports Strong Q1 2025 Financial Results
Positive
May 5, 2025

On May 5, 2025, Kilroy Realty Corporation reported its financial results for the first quarter ended March 31, 2025, highlighting a strong start to the year despite market volatility. The company achieved revenues of $270.8 million and a net income of $39.0 million, with significant leasing activity and progress in its development projects. Kilroy also announced an agreement to sell a portion of its Santa Fe Summit site, which is expected to close in 2026, indicating strategic moves to monetize its land assets.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Jul 11, 2025