Institutional holdings rise
The purchases increased Asset Management One's Kilroy holdings by 9.2%. Other institutional investors also expanded their positions during the quarter, while hedge funds and other institutions collectively owned 94.22% of the stock.
Signaturefd LLC bought 2,668 shares, increasing its stake by 38.9% to 9,533 shares valued at $317,000. Evergreen Capital Management LLC added 1,542 shares, a 17.3% increase, leaving it with 10,465 shares worth $354,000.
Sterling Capital Management LLC's position rose 6.1% after it purchased 596 shares, bringing its holdings to 10,411 shares valued at $346,000. Inspire Investing LLC bought 388 shares to reach 22,724 shares worth $756,000, an increase of 1.7%. Sumitomo Mitsui DS Asset Management Company Ltd added 3,892 shares, raising its stake by 15.2% to 29,574 shares valued at $984,000.
Leasing volume and occupancy
Kilroy owns, acquires, develops and manages office, life science and mixed-use real estate, primarily serving technology, life science, entertainment, media and other knowledge-based businesses. Founded in 1947, the company has properties concentrated in the San Francisco Bay Area, Los Angeles, San Diego and Seattle. Its mixed-use developments combine offices with retail, housing and public amenities.
In its third-quarter 2026 results, Kilroy reported approximately 815,000 square feet of new and renewal leases. CEO Angela Aman said the volume was among the company's highest for a quarter since 2019. Leasing for the first nine months exceeded 1.75 million square feet, nearly 44% above the same period in 2025.
A renewal with content management company Box, Inc. accounted for approximately 243,000 square feet at Crossing 900 in Redwood City. The agreement runs for 12 years.
For second-generation leases signed during the quarter, rents increased 30.6% on a GAAP basis and 9.7% on a cash basis compared with prior levels, excluding short-term leasing. With space vacant for more than 12 months also excluded, the increases were 37.9% and 13.9%, respectively.
As of September 30, Kilroy's stabilized portfolio had occupancy of 76.9% and was 83.0% leased. The 610-basis-point gap reflected signed leases that had not yet commenced. Without Kilroy Oyster Point Phase 2, occupancy was 80.7% and the leased rate was 84.8%.
Signed leases awaiting commencement covered more than 1.4 million square feet and represented nearly $101 million in annualized base rent, according to management. At roughly $72 per square foot, that rent was about 22% above the portfolio-wide average. Management expected leases representing $48 million of annualized base rent to commence between the end of the third quarter of 2026 and year-end 2027: $14 million in the fourth quarter of 2026 and $34 million in 2027.
Quarterly earnings and full-year outlook
Kilroy released its quarterly earnings on October 22. Earnings per share of $0.13 matched the consensus estimate, while revenue of $271.60 million exceeded the $268.02 million estimate. Revenue declined 2.9% from a year earlier, when the company reported EPS of $1.08. Net margin was 2.63%, and return on equity was 0.52%. Sell-side analysts expected earnings of $3.58 per share for the current fiscal year.
The company's third-quarter funds from operations, or FFO, totaled $104.6 million, equivalent to $0.88 per diluted share. In the third quarter of 2025, FFO was $130.6 million, or $1.08 per diluted share.
Kilroy narrowed and raised its full-year 2026 Nareit FFO guidance to a range of $3.55 to $3.59 per diluted share, with a midpoint of $3.57. Its previous range was $3.49 to $3.63.
Analysts maintain an average Hold rating
MarketBeat data showed four Buy ratings, nine Hold ratings and two Sell ratings for Kilroy. The stock's average rating was "Hold," with an average price target of $38.69.
Three firms revised their targets on July 21. JPMorgan Chase & Co. cut its target from $40 to $39 and assigned a "neutral" rating. Barclays moved its target up from $31 to $38 with an "equal weight" rating, while Mizuho raised its target from $29 to $34 and rated the shares "underperform."
Citigroup increased its target from $34 to $40 on July 30, assigning a "neutral" rating. Wells Fargo & Company followed on September 1 with an increase from $33 to $38 and an "equal weight" rating.
Stock performance and dividend
Kilroy opened at $36.03 on Monday, November 2. Its 50-day moving average was $35.13, compared with a 200-day average of $34.55. Over the preceding 52 weeks, shares traded between $27.36 and $43.58.
The company had a market value of $4.19 billion, a price-to-earnings ratio of 150.12 and a beta of 1.16. Both its quick ratio and current ratio were 1.72, while its debt-to-equity ratio was 0.81.
Shareholders received a quarterly dividend of $0.54 per share on October 14. September 30 was both the record date and the ex-dividend date. The payment represented an annualized dividend of $2.16 and a yield of 6.0%; the reported payout ratio was 900.00%.
Debt repayment and pending land sales
In July 2026, Kilroy repaid at par the full $200.0 million outstanding on its 4.350% Private Placement Senior Notes Series B, which were due in October 2026.
The company agreed in August to sell its Kilroy East Village land site in San Diego for gross proceeds of $19.5 million. The agreement was subject to a non-refundable deposit, with closing anticipated in the fourth quarter of 2026. Management said Kilroy had a total of $185 million in land under contract.
