KRC changes
Pick any two versions below to diff them.
- Price
- $34.83 → $34.43(−1.1%)
- Discount
- 18% to 40% → 19% to 40%(+1.0 pts)
- Next earnings
- 2026-10-27 → 2026-10-22
- Next earnings is estimate
- Yes → No
- Thesis
- The market prices Kilroy for weak office and life science demand on the West Coast. Its stabilized portfolio was only 77.0% occupied at June 30, 2026, and the large Kilroy Oyster Point Phase 2 campus has low occupancy. Funds from operations per share fell to $0.92 in Q2 2026 from $1.13 a year earlier, and net debt was 7.0 times the company's share of EBITDAre. Investors fear that vacancy stays high, that rents do not recover, and that the company must sell more buildings at low prices to keep its debt in control. In addition, the Chief Financial Officer left on August 11, 2026. For the gap to close, three things must be true. Leases signed but not yet started must turn into occupancy, so that occupancy rises from the 76.5% to 78.0% average expected for 2026. Kilroy must lease more space at Kilroy Oyster Point Phase 2, which costs money while it is empty. Kilroy must sell non-core assets at fair prices and keep its debt stable. The Q3 2026 report, expected in late on October 22, 2026, and the 2027 guidance in early 2027 give the next evidence. If these checks pass, the gap can close slowly over two to three years. The main reason it may not close is that office demand in San Francisco and Seattle recovers more slowly than leasing activity now suggests.
- Checkpoints
- Oct 2722, 2026 (estimate): Q3 2026 earnings: occupancy. Pending. Watch: Occupancy in line with the 76.5% to 78.0% average for 2026 and unchanged guidance pass; lower occupancy or a cut to guidance fails. Feb 2027 (estimate): 2027 guidance. Pending. Watch: Guidance for higher occupancy in 2027 and new leases at Kilroy Oyster Point Phase 2 pass; lower funds from operations per share without a path to recovery fail.