Kilroy Realty Logs 568,000 Sq Ft Q1 Leasing, Sells $350M Non-Core Assets
Kilroy Realty reported Q1 revenues of $270.1 million with a $(19.3) million net loss while FFO declined to $108.8 million, or $0.91 per share. Leasing hit 568,000 square feet and the company sold about $350 million of non-core assets while repurchasing 2.4 million shares.
1. First-Quarter Financial Performance
Kilroy Realty posted Q1 revenues of $270.1 million and a net loss of $19.3 million, or $0.16 per share, compared with Q1 2025 net income of $39.0 million. Funds from operations fell to $108.8 million, or $0.91 per diluted share, while leasing activity reached 568,000 square feet, the strongest first quarter since 2017.
2. Capital Recycling and Share Repurchases
During the quarter, the company sold approximately $350 million of non-core properties, including Kilroy Sabre Springs for $124.5 million and Del Mar Tech Center for $21.0 million, and closed a $202.0 million sale of two Hollywood residential towers in April. It also repurchased 2.4 million shares at an average price of $30.80, spending $72.7 million.
3. New Joint Venture and Development Project
In February, Kilroy acquired an interest in 1900 Broadway, a fully entitled site in Downtown Redwood City set for a 251,000-square-foot office building. The project is 58% pre-leased to Cooley LLP on a 20-year deal, with total costs projected at $330–350 million and construction slated to start in 2027 for 2030 delivery.
4. Updated Full-Year Guidance
Kilroy raised its full-year 2026 FFO per share guidance to $3.49–3.63 from $3.25–3.45, reflecting stronger occupancy assumptions and reduced interest expense. It also increased expected property dispositions to $347.5–500 million while maintaining development spending at $150–200 million.