Kilroy Realty Boosts 2025 FFO Outlook to $4.05-$4.15/Share Amid West Coast Office Market Recovery

Kilroy Realty has raised its 2025 FFO outlook to $4.05-$4.15 per share as the West Coast office market rebounds. The company reported strong Q2 results with over 400,000 sq. ft. of new and renewal leases. CEO Angela Aman attributed the growth to solidifying office fundamentals on the West Coast.

Kilroy Realty Corp (KRC) has significantly improved its 2025 FFO outlook to a range of $4.05-$4.15 per share, reflecting robust Q2 2025 earnings that surpassed analyst expectations. The company reported an earnings per share (EPS) of $0.57, up 78.13% from the forecasted $0.32. Revenue reached $289.9 million, a 7.26% surprise over the expected $270.28 million. Following the earnings announcement, Kilroy's stock price increased by 5.38%, closing at $36.61 [1].

The company's strong performance was driven by solid leasing activity across its diverse portfolio, including life sciences, technology, and office spaces. Kilroy Realty reported a Q2 funds from operations (FFO) of $1.13 per diluted share, inclusive of $0.11 per share from one-time items. Cash same property net operating income (NOI) grew by 4.50%, despite a slight decline in occupancy from 81.4% in Q1 to 80.8% in Q2 [1].

CEO Angela Aman attributed the growth to solidifying office fundamentals on the West Coast. The company's strategic focus on high-demand sectors such as healthcare, life sciences, and AI has contributed to its success. Kilroy Realty has raised its 2025 FFO outlook to a range of $4.05-$4.15 per share, signaling confidence in its operational strategy and market positioning [1].

The company anticipates modest occupancy declines in Q3 but expects positive net absorption in Q4. Looking ahead to 2026, Kilroy is preparing for potential occupancy challenges with the entry of its KOP project. The company has also made progress on monetizing land parcels, with announced transactions aggregating total expected gross proceeds of $79,000,000. These transactions represent over half of Kilroy's stated goal of realizing $150,000,000 from the monetization of the future pipeline [1].

Kilroy Realty's strong performance and improved outlook indicate a positive outlook for the West Coast office market. The company's focus on high-demand sectors and strategic land use evaluations position it well for continued success in the quarters ahead [1].

References:
[1] https://www.investing.com/news/transcripts/earnings-call-transcript-kilroy-realtys-q2-2025-earnings-surpass-expectations-93CH-4158235