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Sep 30
Kilroy Realty Q3 2025 Earnings Report
Kilroy Realty posted stronger net income in Q3 2025 despite a decline in total revenue compared to the prior year.
Key Takeaways
Kilroy Realty reported $279.7 million in revenue and $156.2 million in net income for Q3 2025. EPS grew significantly compared to Q3 2024, supported by gains on property sales and early rent commencements. Occupancy and leasing rates improved in some regions, while total revenue declined year over year.
Revenue was $279,744,000 for the quarter, down from $289,938,000 in Q3 2024
Net income rose to $156,220,000, significantly up from $52,378,000 in the prior year
Diluted EPS increased to $1.31, compared to $0.44 in Q3 2024
84,000 square feet of leases signed at Kilroy Oyster Point Phase 2 to date
Kilroy Realty
Kilroy Realty
Forward Guidance
Kilroy raised full-year 2025 earnings guidance, driven by higher net income expectations and improved leasing activity, despite continued pressure on same-property NOI and some geographic challenges.
Positive Outlook
- Raised full-year 2025 net income guidance to $2.46–$2.52 per diluted share
- Strong leasing momentum with 552,000 sq. ft. signed in Q3
- Executed 84,000 sq. ft. of leases at Kilroy Oyster Point Phase 2
- Added 2 redeveloped assets to the stabilized portfolio
- Completed $365M asset sale in Silicon Valley, enhancing liquidity
Challenges Ahead
- Revenues declined YoY to $279.7M from $289.9M
- Same-property cash NOI growth forecast lowered to (0.75%) to (1.25%)
- Ongoing lease expirations and rent roll-downs in San Diego and SF Bay Area
- KOP 2 still short of 100,000 sq. ft. lease goal
- High exposure to coastal office markets with weaker fundamentals