KRC

Interested in Kilroy Realty Corporation? Here are five stocks we like better. Leasing momentum improved: Kilroy executed 376,000 square feet of leases in Q2, with first-half volume up more than 40% year over year. Comparable lease rates rose 21% on a GAAP basis and 6.1% in cash rents, while positive re-leasing spreads returned for the first time in nearly two years. Future NOI growth is supported by demand: The company had more than 1 million square feet of signed but not yet commenced leases representing over $78 million in annualized base rent. San Francisco recorded its fourth consecutive quarter of positive net absorption, while life-science touring activity at Oyster Point increased significantly. Guidance and balance-sheet actions remain intact: Kilroy affirmed 2026 FFO guidance of $3.49–$3.63 per diluted share and same-property NOI growth of 25–125 basis points. It also expanded and extended its credit facilities, repaid $200 million of notes, and continued asset sales and land-sale efforts to recycle capital. Are Dividend-Paying Office REITs Finally Staging A Comeback? Kilroy Realty (NYSE:KRC) reported second-quarter funds from operations of $0.92 per diluted share and said leasing conditions continued to improve across its West Coast office and life science markets, supported by stronger tenant demand, reduced high-quality space availability and expanding renewal discussions. CEO Angela Aman said the company executed about 376,000 square feet of new and renewal leases during the quarter, bringing first-half leasing volume to roughly 944,000 square feet, more than 40% above the comparable period in 2025. For comparable leases signed in the quarter, GAAP rental rates increased 21% and cash rents increased 6.1%. → Volatility Is Back and These 3 Market Tollbooths Are Best Positioned to Profit Excluding space that had been vacant for more than 12 months, GAAP and cash re-leasing spreads were 27.3% and 15.6%, respectively. CFO Jeffrey Kuehling said it was the first quarter in nearly two years in which both GAAP and cash re-leasing spreads were positive. At June 30, Kilroy had more than 1 million square feet of signed but not yet commenced leases, representing more than $78 million of annualized base rent. The annualized base rent per square foot in that pool exceeded $75, about 30% above the company’s current portfolio-wide level, according to Aman. → This Tiny AI Supplier Could Be More Important Than the Chipmakers Further, 86% of signed-but-not-commenced leases use triple-net structures, compared with 53% of the existing portfolio. Aman said the lease mix should provide a disproportionately positive contribution to net operating income as tenants commence occupancy. Portfolio occupancy, including Kilroy Oyster Point Phase 2, was 77% at quarter-end, down 60 basis points sequentially. Kuehling said occupancy was affected by two previously disclosed large move-outs, which reduced occupancy by about 140 basis points. New lease commencements partly offset that impact. → 2 Stocks Built to Thrive If Inflation Refuses to Fade The company also completed about 75,000 square feet of renewals during the quarter on space it had expected to vacate. Retention was 27.9% for the quarter and 30% year to date, including subtenants. Kuehling said the remaining 2026 expiration schedule is more granular, with no expirations above 50,000 square feet. Aman said San Francisco, Kilroy’s largest market, recorded its fourth consecutive quarter of positive net absorption. The market’s flight-to-quality trend has reduced competitive sublease space and direct vacancy in trophy and Class A properties, while average effective rents have risen about 15% year over year. Active tenant demand in San Francisco has surpassed 10 million square feet, a level not seen since 2019, according to Aman. Artificial intelligence-related companies account for about one-third of that demand pipeline, though the company said interest is broad-based across industries. Chief Leasing Officer Rob Paratte said 7.5 million square feet had been leased year to date in San Francisco, while availability had declined by 4.5 million square feet. He said the decline in large, available blocks is prompting tenants to make decisions more quickly, including tenants with lease expirations still several years away. Kilroy said it has also seen improved activity in Seattle’s South Lake Union and Denny Regrade areas, suburban San Diego, Beverly Hills, Culver City and the South Bay in Los Angeles, as well as Austin. In Los Angeles, the company signed a 51,000-square-foot lease with Universal Music Group at Santa Monica Media Center, bringing that project to 100% leased. In life sciences, Aman cited improving sector conditions, including a more than 70% year-over-year increase in the XBI, open biotech IPO and follow-on equity markets, and active merger, acquisition and licensing activity. At Kilroy Oyster Point Phase 2, the company executed a previously announced 38,000-square-foot lease with Olema Pharmaceuticals. Paratte said touring activity in South San Francisco and the Peninsula rose from 317,000 square feet in the first quarter to more than 800,000 square feet in the second quarter. He said Kilroy has active interest in all unleased space in its multitenant Oyster Point building. The company’s final available spec suite has multiple interested parties, while two new floors of spec labs are expected to become available in December and January. Paratte also pointed to growing demand from robotics companies, including some requirements above 100,000 square feet. EVP and CIO Eliott Trencher said Kilroy sold $348 million of assets year to date, including the previously discussed $202 million Los Angeles residential sale. The company has $165 million of land sales under contract, with roughly half expected to close late in 2026 or early in 2027. Kilroy is evaluating additional land sales and acquisition opportunities, focusing on office and life science assets in its five existing markets. Trencher said the company would remain selective, generally seeking opportunities where leasing, capital investment or future lease-roll expertise can create value. Regarding the Flower Mart site in San Francisco, Kilroy is working with the city on a revised plan that is expected to allow more flexibility in phasing and a broader mix of uses, including residential. Aman said the company expects to complete that process later in the fourth quarter. Trencher said current rents do not yet support either office or residential development economics, and Kilroy expects to stop expense capitalization at year-end 2026. During the quarter, Kilroy increased its revolving credit facility to $1.25 billion and extended its maturity to July 2030. It also upsized its term loan to $250 million and extended its maturity to July 2031. In July, the company repaid $200 million of private placement notes with cash on hand ahead of their October maturity. Kilroy affirmed its full-year guidance for FFO of $3.49 to $3.63 per diluted share and same-property NOI growth of 25 to 125 basis points. Kuehling said the third quarter will face a difficult comparison with the prior year, when the company recognized $4 million in restoration fees and net real estate tax refund benefits. Kilroy Realty Corporation (NYSE: KRC) is a publicly traded real estate investment trust focused on the development, acquisition and management of high‐quality office and mixed‐use properties along the U.S. West Coast. The company's portfolio encompasses major urban markets including Los Angeles, San Diego, the San Francisco Bay Area and Seattle. Kilroy Realty targets properties in transit‐oriented submarkets, blending workplace space with retail, residential and hospitality amenities to create vibrant, walkable neighborhoods. Founded in the mid‐20th century by members of the Kilroy family, the company evolved from a regional landlord into one of the leading West Coast office landlords. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Kilroy Realty Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management attributes the strong quarter to a broadening recovery across innovation-driven markets, particularly in San Francisco, which saw its fourth consecutive quarter of positive net absorption. Performance was driven by a 40% year-over-year increase in leasing volume, supported by both new business formation in the AI sector and traditional tenant expansions. A significant flight to quality is compressing availability for Trophy and Class A assets, allowing the company to capture positive re-leasing spreads of 21% on a GAAP basis. Operational focus has shifted toward converting a 1 million square foot signed-but-not-yet-commenced pool, which carries an ABR 30% higher than the current portfolio average. Strategic positioning in the life sciences sector is improving as biotech capital markets reopen, leading to a material pickup in tour activity at KOP Phase 2. Management noted a shift in tenant behavior, with existing occupiers showing a greater sense of urgency for early renewals to secure long-term space before large contiguous blocks disappear. Guidance assumes a transition toward occupancy stabilization and growth, supported by a granular expiration schedule with no remaining 2026 expirations above 50,000 square feet. The forward leasing pipeline grew 34% sequentially, with LOI and late-stage deals up 77%, providing visibility into future bottom-line growth. Management expects average commencements from the signed-but-not-yet-commenced pool to have a disproportionately positive impact on NOI due to its 86% triple-net structure. Development strategy for the Flower Mart site is being revised to include a broader range of uses, including residential, to maximize optionality as market conditions improve. Capital allocation plans include evaluating $165 million in contracted land sales and exploring opportunistic acquisitions that meet stringent risk-adjusted return criteria. FFO included a $5.9 million bankruptcy settlement from 2023, representing a $0.05 per share non-recurring benefit. The company amended and extended its unsecured credit facilities, increasing liquidity to $1.6 billion and improving pricing by 20 basis points. Management flagged a difficult year-over-year comparison for Q3 2026 due to $4 million in non-recurring tax refunds and restoration fees recognized in the prior year. Expense capitalization for the Flower Mart project is expected to cease at year-end 2026, consistent with prior strategic expectations. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management clarified that while spreads fluctuate based on transaction mix, the current quarter's strength was broad-based across multiple markets and not driven by single large deals. The portfolio remains slightly above market in San Francisco and Los Angeles, though the gap is compressing as market rents firm up. Tour activity at KOP Phase 2 increased from 317,000 square feet in Q1 to over 800,000 square feet in Q2. Management is seeing a re-emergence of larger format users (100,000+ sq. ft.) and robotics companies, which is expected to reduce overall market vacancy for R&D space. The company is working with the city to gain flexibility for a mix of uses and phasing relief, which management believes will enhance the site's economic value. A final decision on the development path or potential joint venture will be made after the city process concludes in late Q4. Management is prioritizing value-add opportunities where they can leverage local scale or operational expertise rather than buying core, stabilized assets. They remain patient and disciplined, looking for 'mispricings' where market fundamentals are recovering faster than asset valuations.

LOS ANGELES, July 01, 2026--(BUSINESS WIRE)--Kilroy Realty Corporation (NYSE: KRC) ("Kilroy" or the "Company") announced today it will release second quarter 2026 financial results after the market closes on Monday, July 27, 2026. Kilroy will hold a conference call to discuss the results at 10:00 a.m. PT / 1:00 p.m. ET on Tuesday, July 28, 2026. To participate and obtain conference call dial-in details, register by using the following link: https://events.q4inc.com/analyst/213776497?pwd=miK0Lhqd. This call will be broadcast live over the Internet and can be accessed on the Investor Relations section of Kilroy’s website at https://investors.kilroyrealty.com/shareholders/investor-events/default.aspx. A replay will also be available on the Company’s Investor Relations website beginning July 28, 2026 through July 27, 2027. About Kilroy Realty Corporation Kilroy is a leading U.S. landlord and developer, with operations in the San Francisco Bay Area, Los Angeles, Seattle, San Diego, and Austin. The Company has earned global recognition for sustainability, building operations, innovation, and design. As a pioneer and innovator in the creation of a more sustainable real estate industry, the Company’s approach to modern business environments helps drive creativity and productivity for some of the world’s leading technology, media, life science, and professional services companies. The Company is a publicly traded real estate investment trust ("REIT") and member of the S&P MidCap 400 Index with more than seven decades of experience managing, developing, and acquiring office, life science, and mixed-use projects. As of March 31, 2026, Kilroy’s stabilized portfolio totaled approximately 17.1 million square feet of primarily office and life science space that was 77.6% occupied and 82.3% leased. The Company also has 608 residential units in San Diego, with a quarterly average occupancy of 95.0%. A Leader in Sustainability and Commitment to Corporate Social Responsibility Kilroy has a longstanding commitment to sustainability and continues to be a recognized leader in our sector. For over a decade, the Company and its sustainability initiatives have been recognized with numerous honors, including earning the GRESB five star rating and being named a sector and regional leader in the Americas. Other honors have included the Nareit Leader in the Light Award, being listed on the Dow Jones Sustainability World Index, being named ENERGY STAR Partner of the Year, and receiving the ENERGY STAR highest honor of Sustained Excellence. Kilroy is proud to have achieved carbon neutral operations across our portfolio since 2020. The Company also has a longstanding commitment to maintain high levels of LEED, Fitwell, and ENERGY STAR certifications across the portfolio. Kilroy is committed to cultivating a company culture that makes a positive difference in our employees’ lives by focusing on development, celebrating our unique backgrounds, promoting employee health and wellness, and dedicating ourselves to being a responsible corporate citizen through our community service and philanthropic efforts. More information is available at http://www.kilroyrealty.com. Forward-Looking Statements This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are based on our current expectations, beliefs, and assumptions, and are not guarantees of future performance. Forward-looking statements are inherently subject to uncertainties, risks, changes in circumstances, trends, and factors that are difficult to predict, many of which are outside of our control. Accordingly, actual performance, results, and events may vary materially from those indicated or implied in the forward-looking statements, and you should not rely on the forward-looking statements as predictions of future performance, results, or events. Numerous factors could cause actual future performance, results, and events to differ materially from those indicated in the forward-looking statements, including, among others: global market and general economic conditions, including actual and potential tariffs and periods of heightened inflation, and their effect on our liquidity and financial conditions and those of our tenants; adverse economic or real estate conditions generally, and specifically, in the States of California, Texas, and Washington; risks associated with our investment in real estate assets, which are illiquid, and with trends in the real estate industry; defaults on or non-renewal of leases by tenants; any significant downturn in tenants’ businesses, including bankruptcy, lack of liquidity or lack of funding, and the impact labor disruptions or strikes, such as episodic strikes in the media industry, may have on our tenants’ businesses; our ability to re-lease property at or above current market rates; reduced demand for office space, including as a result of remote working and flexible working arrangements that allow work from remote locations other than an employer's office premises; costs to comply with government regulations, including environmental remediation; the availability of cash for distribution and debt service, and exposure to risk of default under debt obligations; increases in interest rates and our ability to manage interest rate exposure; changes in interest rates and the availability of financing on attractive terms or at all, which may adversely impact our future interest expense and our ability to pursue development, redevelopment, and acquisition opportunities and refinance existing debt; a decline in real estate asset valuations, which may limit our ability to dispose of assets at attractive prices, or obtain or maintain debt financing, and which may result in write-offs or impairment charges; significant competition, which may decrease the occupancy and rental rates of properties; potential losses that may not be covered by insurance; the ability to successfully complete acquisitions and dispositions on announced terms; the ability to successfully operate acquired, developed, and redeveloped properties; the ability to successfully complete development and redevelopment projects on schedule and within budgeted amounts; delays or refusals in obtaining all necessary zoning, land use, and other required entitlements, governmental permits and authorizations for our development and redevelopment properties; increases in anticipated capital expenditures, tenant improvement, and/or leasing costs; defaults on leases for land on which some of our properties are located; adverse changes to, or enactment or implementations of, tax laws or other applicable laws, regulations, or legislation, as well as business and consumer reactions to such changes; risks associated with joint venture investments, including our lack of sole decision-making authority, our reliance on co-venturers’ financial condition, and disputes between us and our co-venturers; environmental uncertainties and risks related to natural disasters; risks associated with climate change and our sustainability strategies, and our ability to achieve our sustainability goals; and our ability to maintain our status as a REIT. These factors are not exhaustive and additional factors could adversely affect our business and financial performance. For a discussion of additional factors that could materially adversely affect our business and financial performance, see the factors included under the caption "Risk Factors" in our annual report on Form 10-K for the year ended December 31, 2025, and our other filings with the Securities and Exchange Commission. All forward-looking statements are based on currently available information and speak only as of the dates on which they are made. We assume no obligation to update any forward-looking statement made in this press release that becomes untrue because of subsequent events, new information, or otherwise, except to the extent we are required to do so in connection with our ongoing requirements under federal securities laws. View source version on businesswire.com: https://www.businesswire.com/news/home/20260701516058/en/ Contacts Jeffrey KuehlingExecutive Vice President, Chief Financial OfficerAnd Treasurer(310) 481-8440

LOS ANGELES, May 19, 2026--(BUSINESS WIRE)--Kilroy Realty Corporation (NYSE: KRC) ("Kilroy" or the "Company") announced today that its Board of Directors declared a regular quarterly cash dividend of $0.54 per common share payable on July 8, 2026 to stockholders of record on June 30, 2026. The dividend is equivalent to an annual rate of $2.16 per share. About Kilroy Realty Corporation Kilroy is a leading U.S. landlord and developer, with operations in the San Francisco Bay Area, Los Angeles, Seattle, San Diego, and Austin. The Company has earned global recognition for sustainability, building operations, innovation, and design. As a pioneer and innovator in the creation of a more sustainable real estate industry, the Company’s approach to modern business environments helps drive creativity and productivity for some of the world’s leading technology, media, life science, and professional services companies. The Company is a publicly traded real estate investment trust ("REIT") and member of the S&P MidCap 400 Index with more than seven decades of experience managing, developing, and acquiring office, life science, and mixed-use projects. As of March 31, 2026, Kilroy’s stabilized portfolio totaled approximately 17.1 million square feet of primarily office and life science space that was 77.6% occupied and 82.3% leased. The Company also has 608 residential units in San Diego, with a quarterly average occupancy of 95.0%. A Leader in Sustainability and Commitment to Corporate Social Responsibility Kilroy has a longstanding commitment to sustainability and continues to be a recognized leader in our sector. For over a decade, the Company and its sustainability initiatives have been recognized with numerous honors, including earning the GRESB five star rating and being named a sector and regional leader in the Americas. Other honors have included the Nareit Leader in the Light Award, being listed on the Dow Jones Sustainability World Index, being named ENERGY STAR Partner of the Year, and receiving the ENERGY STAR highest honor of Sustained Excellence. Kilroy is proud to have achieved carbon neutral operations across our portfolio since 2020. The Company also has a longstanding commitment to maintain high levels of LEED, Fitwell, and ENERGY STAR certifications across the portfolio. Kilroy is committed to cultivating a company culture that makes a positive difference in our employees’ lives by focusing on development, celebrating our unique backgrounds, promoting employee health and wellness, and dedicating ourselves to being a responsible corporate citizen through our community service and philanthropic efforts. More information is available at http://www.kilroyrealty.com. Forward-Looking Statements This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are based on our current expectations, beliefs, and assumptions, and are not guarantees of future performance. Forward-looking statements are inherently subject to uncertainties, risks, changes in circumstances, trends, and factors that are difficult to predict, many of which are outside of our control. Accordingly, actual performance, results, and events may vary materially from those indicated or implied in the forward-looking statements, and you should not rely on the forward-looking statements as predictions of future performance, results, or events. Numerous factors could cause actual future performance, results, and events to differ materially from those indicated in the forward-looking statements, including, among others: global market and general economic conditions, including actual and potential tariffs and periods of heightened inflation, and their effect on our liquidity and financial conditions and those of our tenants; adverse economic or real estate conditions generally, and specifically, in the States of California, Texas, and Washington; risks associated with our investment in real estate assets, which are illiquid, and with trends in the real estate industry; defaults on or non-renewal of leases by tenants; any significant downturn in tenants’ businesses, including bankruptcy, lack of liquidity or lack of funding, and the impact labor disruptions or strikes, such as episodic strikes in the media industry, may have on our tenants’ businesses; our ability to re-lease property at or above current market rates; reduced demand for office space, including as a result of remote working and flexible working arrangements that allow work from remote locations other than an employer's office premises; costs to comply with government regulations, including environmental remediation; the availability of cash for distribution and debt service, and exposure to risk of default under debt obligations; increases in interest rates and our ability to manage interest rate exposure; changes in interest rates and the availability of financing on attractive terms or at all, which may adversely impact our future interest expense and our ability to pursue development, redevelopment, and acquisition opportunities and refinance existing debt; a decline in real estate asset valuations, which may limit our ability to dispose of assets at attractive prices, or obtain or maintain debt financing, and which may result in write-offs or impairment charges; significant competition, which may decrease the occupancy and rental rates of properties; potential losses that may not be covered by insurance; the ability to successfully complete acquisitions and dispositions on announced terms; the ability to successfully operate acquired, developed, and redeveloped properties; the ability to successfully complete development and redevelopment projects on schedule and within budgeted amounts; delays or refusals in obtaining all necessary zoning, land use, and other required entitlements, governmental permits and authorizations for our development and redevelopment properties; increases in anticipated capital expenditures, tenant improvement, and/or leasing costs; defaults on leases for land on which some of our properties are located; adverse changes to, or enactment or implementations of, tax laws or other applicable laws, regulations, or legislation, as well as business and consumer reactions to such changes; risks associated with joint venture investments, including our lack of sole decision-making authority, our reliance on co-venturers’ financial condition, and disputes between us and our co-venturers; environmental uncertainties and risks related to natural disasters; risks associated with climate change and our sustainability strategies, and our ability to achieve our sustainability goals; and our ability to maintain our status as a REIT. These factors are not exhaustive and additional factors could adversely affect our business and financial performance. For a discussion of additional factors that could materially adversely affect our business and financial performance, see the factors included under the caption "Risk Factors" in our annual report on Form 10-K for the year ended December 31, 2025, and our other filings with the Securities and Exchange Commission. All forward-looking statements are based on currently available information and speak only as of the dates on which they are made. We assume no obligation to update any forward-looking statement made in this press release that becomes untrue because of subsequent events, new information, or otherwise, except to the extent we are required to do so in connection with our ongoing requirements under federal securities laws. View source version on businesswire.com: https://www.businesswire.com/news/home/20260514944907/en/ Contacts Doug BettisworthVice President, Corporate Finance(310) 481-8585

Make better investment decisions with Simply Wall St's easy, visual tools that give you a competitive edge. Kilroy Realty (KRC) is drawing attention after first quarter results showed a net loss, sizeable real estate impairment charges and a sharp reduction in full year 2026 earnings guidance compared with prior expectations. See our latest analysis for Kilroy Realty. The earnings miss, sizeable US$61.8m impairment charges, and sharply lower 2026 guidance have arrived alongside a 30 day share price return of 18.24% and a year to date share price decline of 11.52%. The 1 year total shareholder return of 12.26% contrasts with a 5 year total shareholder return decline of 34.62%, suggesting recent momentum is building after a weaker longer term record as investors reassess risk and income prospects. If you are weighing how this kind of reset might compare with other opportunities, it can help to look beyond a single stock and review 17 top founder-led companies With a net loss, US$61.8m of impairments, lower 2026 earnings guidance and an ongoing buyback, Kilroy’s story is mixed. Is the current share price a genuine reset opportunity, or is the market already pricing in future growth? With Kilroy Realty last closing at $33.64 against a narrative fair value of $35.86, the current pricing sits slightly below what the most followed narrative suggests and that gap hinges on how West Coast office leasing and development cash flows evolve from here. Read the complete narrative. Want to see what is sitting behind that tight valuation gap? The narrative leans heavily on modest revenue growth, thinner margins, and a higher future earnings multiple anchored to an 8.16% discount rate. The mix of shrinking earnings and a richer multiple is what really drives the fair value story. Result: Fair Value of $35.86 (UNDERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, there is still a chance that faster leasing in key West Coast markets or stronger demand for Kilroy’s ESG focused properties could help tighten that valuation gap. Find out about the key risks to this Kilroy Realty narrative. With both risks and rewards in play, the real question is how you weigh them for your own portfolio and time frame. To explore this further, review the 3 key rewards and 4 important warning signs If Kilroy has sharpened your focus, do not stop here. Some of the most interesting opportunities often sit just outside the stocks you already follow. Target income potential by scanning for reliable high yielders using the 13 dividend fortresses. Hunt for quality at a reasonable price through the 49 high quality undervalued stocks before other investors catch on. Prioritise resilience by sorting companies with stronger finances via the solid balance sheet and fundamentals stocks screener (44 results). This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include KRC. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

This article first appeared on GuruFocus. Leasing Activity: 568,000 square feet leased in Q1 2026, more than double the previous year's first quarter. Annualized Base Rent: $78 million from leases signed but not yet commenced. Property Dispositions: $350 million year-to-date, exceeding the original full-year goal. Stock Repurchase: $73 million repurchased at an average price of $30.80 per share. FFO: $0.91 per diluted share for Q1 2026. Portfolio Occupancy: 77.6% at the end of Q1 2026; 81.5% excluding KOP 2. Cash Same-Property NOI Growth: 1.8% increase in Q1 2026. Leasing Spreads: GAAP spreads of -10.6% and cash spreads of -16.8% for the quarter. 2026 FFO Guidance: Increased by $0.21 at the midpoint to a range of $3.49 to $3.63 per diluted share. Cash Same-Property NOI Growth Guidance: Increased to a range of 25 to 125 basis points. Warning! GuruFocus has detected 7 Warning Signs with KRC. Is KRC fairly valued? Test your thesis with our free DCF calculator. Release Date: April 28, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Kilroy Realty Corp (NYSE:KRC) reported its strongest first quarter leasing results since 2017, with total productivity of approximately 568,000 square feet, more than double the previous year's performance. The company increased its full-year average occupancy guidance by 25 basis points at the midpoint, driven by strong leasing activity. Leases signed but not yet commenced represent nearly $78 million of contractually obligated annualized base rent, providing significant visibility on future growth. In San Francisco, market conditions have tightened with first-quarter leasing exceeding 3 million square feet, positioning KRC well to capitalize on demand across its Bay Area portfolio. KRC successfully executed a joint venture to develop a premier, substantially pre-leased Class A office asset in downtown Redwood City, with a 20-year lease signed at the highest rates ever realized in the Kilroy portfolio. Leasing spreads during the quarter showed negative GAAP spreads of 10.6% and cash spreads of 16.8%, primarily driven by two leases in San Francisco. Portfolio occupancy ended the quarter at 77.6%, which is relatively low, although it would have been 81.5% excluding KOP 2. The company anticipates a drop in occupancy in the second quarter due to the pace of move-outs, with Q2 being the largest move-out quarter of 2026. The Flower Mart project in San Francisco is undergoing a redesign and reimagining process, which is expected to delay capitalization until late in the fourth quarter. Despite improvements, the Los Angeles market is experiencing only gradual recovery, with the broader market still facing challenges. Q: Can you elaborate on the leasing demand in Los Angeles and San Diego and how far along the recovery is in these markets? A: Rob Paratte, EVP, Chief Leasing Officer, noted that across the entire company portfolio, including Los Angeles, there is an increase in activity such as tours and proposals. In Q1, 24 deals were signed in L.A., with significant activity at Long Beach and Maple Plaza. The pipeline continues to grow, reflecting a flight to quality, with high-quality assets in L.A. and San Diego benefiting from this trend. Q: What are the expected yields for the 1900 Broadway project, and where do rents need to be for the unleased space? A: Eliott Trencher, EVP, CIO, stated that they expect stabilized yields in the low to mid-9% range. With 60% of the building leased, they have a good rent comp for market rents. Angela Aman, CEO, added that the project is highly walkable and amenitized, which should drive premium rents. Q: What is driving the signed but not commenced leases, and is there any conservatism in the yield numbers? A: Angela Aman explained that the skew towards net leases is a mix issue related to the properties and markets involved. The stabilized yield for the 1900 Broadway project is expected to be in the low to mid-9% range, which is considered compelling. Q: What are your thoughts on the Flower Mart project and its potential as a development going forward? A: Angela Aman mentioned that they are closely monitoring the San Francisco market and the design and entitlement process for the Flower Mart project. They aim to maximize shareholder value and are exploring a broader mix of uses, including residential, to adapt to market conditions. Q: How do you view the revised disposition guidance, and are there any submarkets you would consider exiting? A: Eliott Trencher stated that the revised disposition range reflects the potential for additional sales beyond what has been done. The approach remains opportunistic, focusing on maximizing proceeds and good execution rather than targeting specific markets for exit. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Kilroy delivered its strongest first-quarter leasing since 2017 with roughly 568,000 sq ft leased (more than double year-ago), highlighted by strong San Francisco activity (Q1 leasing >3M sq ft and 201 Third occupancy rising to >80%), a nearly $78M backlog of signed-but-not-yet-commenced annualized base rent, and a 25-basis-point increase to full-year average occupancy guidance at the midpoint. Management is actively recycling capital—selling office and residential assets for about $348M gross proceeds announced this period, with ~$165M of land sales under contract and $73M of stock repurchased—and launched a joint venture to develop 1900 Broadway in Redwood City (Cooley as anchor), where Kilroy’s share will be ~97% and stabilized yields are expected in the low‑to‑mid 9% range. Financials: Q1 FFO was $0.91 per diluted share and management raised 2026 FFO guidance by $0.21 at the midpoint to a range of $3.49–$3.63, while portfolio occupancy ended at 77.6% (81.5% ex‑KOPT) and cash same‑property NOI growth guidance was increased to 25–125 bps, noting Flower Mart expense capitalization is now expected to cease late in Q4. Interested in Kilroy Realty Corporation? Here are five stocks we like better. Are Dividend-Paying Office REITs Finally Staging A Comeback? Kilroy Realty (NYSE:KRC) executives said improving West Coast office fundamentals—particularly in San Francisco—helped drive the company’s strongest first-quarter leasing performance since 2017, while asset sales and a new Redwood City development joint venture reshaped capital allocation plans. CEO Angela Aman said market conditions have “meaningfully improved” over recent quarters as return-to-office momentum has strengthened, large-user space rationalizations have slowed, and demand tied to the artificial intelligence ecosystem has increased. She characterized recent tenant behavior as “a constructive dynamic” in which companies are using AI to “enhance their growth” rather than simply automate to cut costs. → Homebuilder Earnings: D.R. Horton Sticks Out as Pulte & NVR Sales Tank Aman said the company delivered roughly 568,000 square feet of first-quarter leasing productivity—more than double the year-ago quarter—and said that result supported an increase in full-year average occupancy guidance by 25 basis points at the midpoint. She also highlighted a growing backlog of future revenue: leases signed but not yet commenced represent nearly $78 million of contractually obligated annualized base rent, scheduled to be realized over coming years. In San Francisco, Aman pointed to a tightening market supported by strong leasing and positive net absorption. She said first-quarter leasing in the city exceeded 3 million square feet, “resulting in the third consecutive positive quarter of net absorption.” Within the South of Market submarket, she noted a sharp improvement at 201 Third, where the lease rate rose from 26% at year-end 2024 to more than 80% in the quarter. The company cited leasing to tenants including Tubi and Harvey AI. → Meta Platforms Earnings Preview: What to Watch in Q1 2026 Report Aman highlighted Harvey AI’s recent expansion at 201 Third, noting the tenant leased 93,000 square feet in the second quarter of 2025 and signed a 62,000-square-foot expansion in the first quarter of 2026 with occupancy slated for April 2026. She also said the company’s spec suite program at the asset has been successful, with all five newly constructed spec suites leased by completion. Elsewhere in the Bay Area, Aman said Kilroy executed a 27,000-square-foot direct lease at Crossing 900 in downtown Redwood City with a current subtenant, generating a cash base rent increase of more than 40%. → Palantir Is Down 30%: Noise? Or a Signal to Accumulate? In Seattle, Aman said Bellevue has remained strong and that demand in the Denny Regrade submarket “further accelerated,” benefiting the recently repositioned West Eighth project. She said the company has signed 76,000 square feet of new leases at West Eighth year to date, including a 43,000-square-foot lease with General Motors in the first quarter and a 33,000-square-foot lease with SoFi signed in the first days of the second quarter. During the Q&A, Chief Leasing Officer Rob Paratte said both SoFi and GM were “new to market” and attributed traction at West Eighth to renovations, amenities, and the location’s appeal to talent. He added that tenants generally choose between Bellevue and Seattle rather than shifting directly based on Bellevue’s higher rents, though he said the company expects potential tenant flow over time. In Los Angeles, Aman said leasing improved over the past year, with trailing 12-month productivity up about 66%, reflecting both gradual market improvement and “significant portfolio repositioning work” over the past two years. She pointed to increased tour activity at Arrow in Long Beach as defense and aerospace requirements rebound, and said Blackwelder in Culver City is seeing increased activity from a range of users, including technology and AI companies. She also said Maple Plaza, a recent Beverly Hills acquisition, has seen stronger-than-expected demand across financial services and media and entertainment. Paratte told analysts the company signed 24 deals in Los Angeles in the first quarter and said activity is rising across multiple assets. He emphasized an ongoing “flight to quality,” saying the recovery is not uniform across owners and properties. On life sciences, Aman said KOPT has outperformed the broader South San Francisco market and that decision-makers are showing a higher propensity to execute than in recent years. She said that after quarter-end the company executed a 38,000-square-foot lease with Olema Pharmaceuticals, bringing KOPT to 49% leased. She also said the pipeline remains robust, with the company evaluating ways to complete the lease-up of the multi-tenant building while engaging with large-format users for the remaining full-building opportunity in Phase II. Asked about yields, Aman said the mid-5% yield expectations previously shared remain “fully intact.” Management emphasized capital recycling and balance sheet flexibility. Aman said Kilroy sold two San Diego office assets—Kilroy Sabre Springs and Del Mar Tech Center—for total gross proceeds of $146 million in the first quarter. Elliot Trencher, EVP and chief investment officer, said the company also closed after quarter-end on the sale of two Hollywood residential towers, Columbia Square Living and Jardine, for aggregate gross proceeds of $202 million. Trencher said the cap rate on all sales announced year to date averages in the mid-single digits, and later told analysts the residential sales were “around in the 4% range.” Trencher also noted $165 million of land sales under contract, with roughly half expected to close late this year or early next year. He said that over the past 2.5 years, Kilroy has completed or put under contract about $980 million of land and operating property sales, and has redeployed part of the proceeds into “four high caliber infill, amenitized, multi-tenant investments totaling roughly $765 million,” including the full cost of building out 1900 Broadway. Aman said the company repurchased about $73 million of stock at an average price of $30.80 per share and in April fully redeemed a $50 million tranche of private placement notes scheduled to mature in July. She said future repurchase decisions will be evaluated alongside other alternatives, with “balance sheet strength and flexibility” as priorities and an emphasis on being prepared for periods of market volatility and “significant or extreme dislocation.” Kilroy also announced a joint venture to develop 1900 Broadway in downtown Redwood City, which is fully entitled for 250,000 square feet of office space. Aman said the company executed a 20-year lease with a “top-tier global law firm” for 145,000 square feet, representing about 60% of the building, at the highest rates ever realized in Kilroy’s portfolio. Trencher identified the anchor tenant as Cooley and said the company intends to break ground next year, with Cooley expected to take occupancy in early 2030. He said total anticipated cost is $330 million to $350 million and that Kilroy’s share will be 97% upon completion, with stabilized yields expected in the low-to-mid 9% range. CFO Jeffrey Kuehling reported first-quarter FFO of $0.91 per diluted share. Portfolio occupancy ended the quarter at 77.6%, reflecting KOPT’s entry into the stabilized pool; excluding KOPT, occupancy would have been 81.5%, down 10 basis points despite previously communicated move-outs. Cash same-property NOI increased 1.0% in the quarter, helped by lower bad debt and other income items, partially offset by lower base rent due to free rent on some new leases. Leasing spreads in the quarter were negative overall—GAAP spreads of -10.6% and cash spreads of -16.8%—which Kuehling attributed primarily to two San Francisco leases involving space vacant longer than 12 months. He said leasing on space vacant for less than 12 months generated positive GAAP spreads of 19.2% and cash spreads of 5.2%. Kuehling said Kilroy increased 2026 FFO guidance by $0.21 at the midpoint to a range of $3.49 to $3.63 per diluted share. He attributed the change to improving core portfolio performance and updated assumptions for Flower Mart expense capitalization. Management said it now expects expense capitalization at Flower Mart to cease late in the fourth quarter; at that point, Kuehling said “a little less than $1 million of quarterly operating expenses and real estate taxes,” plus $7 million of quarterly capitalized interest, would begin impacting earnings. Cash same-property NOI growth guidance was raised to 25 to 125 basis points, representing a 150 basis point midpoint increase. Kuehling said the increase includes a $5.9 million settlement received in April related to the 23andMe bankruptcy, which “fully resolves” the company’s economic interest and contributes about 90 basis points to NOI growth, as well as about 60 basis points from improving net expenses and higher average occupancy. On Flower Mart’s future, Aman said the company is working with the City of San Francisco to redesign and “reimagine” the project, including pursuing flexibility for a broader mix of uses and seeking amendments such as a Special Use District. She said the alternative city approval process will take additional time, and the company now expects the process to be completed late in the fourth quarter, when it assumes expense capitalization would cease. She described a continuation of capitalization beyond that point as a “low probability,” though “not a 0% probability,” depending on market demand. Kilroy Realty Corporation (NYSE: KRC) is a publicly traded real estate investment trust focused on the development, acquisition and management of high‐quality office and mixed‐use properties along the U.S. West Coast. The company's portfolio encompasses major urban markets including Los Angeles, San Diego, the San Francisco Bay Area and Seattle. Kilroy Realty targets properties in transit‐oriented submarkets, blending workplace space with retail, residential and hospitality amenities to create vibrant, walkable neighborhoods. Founded in the mid‐20th century by members of the Kilroy family, the company evolved from a regional landlord into one of the leading West Coast office landlords. The article "Kilroy Realty Q1 Earnings Call Highlights" was originally published by MarketBeat.

Image source: The Motley Fool. Tuesday, April 28, 2026 at 1 p.m. ET President and Chief Executive Officer — Angela Aman Chief Investment Officer — Eliott Trencher Executive Vice President, Leasing and Business Development — Robert Paratte Senior Vice President, Finance and Accounting — Jeffrey Kuehling Angela Aman: Thanks, Doug. And thank you all for joining us today. Over the last several quarters, fundamentals across our West Coast markets have meaningfully improved. As return-to-office momentum has intensified, space rationalizations by large users have abated, and the artificial intelligence ecosystem has created considerable new business formation and growth, all contributing to a resurgence in space requirements from rapidly scaling new companies and well-established players alike. Recent tenant behavior, both within our portfolio and across the markets in which we operate, points to a constructive dynamic around technological change with companies seeking to utilize AI to enhance their growth and augment their talented team, rather than automating simply to manage costs. Against this backdrop, our team's disciplined execution drove our strongest first quarter leasing results since 2017, with total productivity of approximately 568 thousand square feet, more than double our first quarter performance last year, positioning us to increase our full-year average occupancy guidance by 25 basis points at the midpoint. Importantly, leases signed but not yet commenced now represent nearly $78 million of contractually obligated annualized base rent to be realized over the coming years, providing significant visibility on future growth. To hit on a few highlights across our regions, in San Francisco, the epicenter of the AI innovation ecosystem, market conditions continue to tighten, as first quarter leasing exceeded 3 million square feet, more than 10% above pre-pandemic quarterly averages, resulting in the third consecutive positive quarter of net absorption and positioning us well to capitalize on broad-based demand across our Bay Area portfolio. In the San Francisco CBD, we have seen significant momentum at our assets in the South of Market, or SoMa, submarket. At 201 Third, our lease rate improved from 26% at year-end 2024 to over 80% this quarter. We have successfully captured demand from a wide range of growing tenants, including both larger format users such as Tubi and Harvey AI, and a variety of smaller format users. As you may recall, in 2025, Harvey AI leased 93 thousand square feet at 201 Third, before signing a 62 thousand square foot expansion this quarter, with occupancy occurring in April 2026, just one month following lease execution. This significant expansion occurring within one year of the original lease execution speaks to both the impressive growth trajectories we are seeing for a number of rapidly scaling AI companies and also to the discipline that they have generally employed with respect to their real estate decisions, taking space only when necessitated by the current needs of the business. In addition, our team has captured outsized market share at 201 Third through the deployment of a creative and disciplined spec suites program, with all five of our recently constructed spec suites leased by completion. We are also thrilled to be experiencing strong demand across other core Bay Area submarkets. At Crossing 900 in Downtown Redwood City, we completed a 27 thousand square foot direct lease with a current subtenant during the quarter, generating an increase in cash base rent of more than 40%, underscoring the depth of demand for high quality, well-located space in this transit-oriented, walkable, and well-amenitized submarket. In Seattle, the strength we have seen in Bellevue over the last several years continues, optimally positioning space we recently recaptured for near-term releasing and rent upside. In addition, the momentum we discussed last quarter in the Denny Regrade submarket further accelerated, benefiting our recently repositioned project, West 8th. Following approximately 74 thousand square feet of new lease executions at West 8th in the fourth quarter of last year, we are pleased to announce an additional 76 thousand square feet of new leases signed at the project year to date, including a 43 thousand square foot lease with General Motors signed in the first quarter and a 33 thousand square foot lease with SoFi, signed in the first few days of the second quarter. With additional tenant discussions underway, we have good visibility into the future pipeline, reflecting the strength and competitiveness of this asset as the recent renovations and enhanced amenity offerings continue to resonate with tenants and position the property to capture a meaningful share of growing market demand. In Los Angeles, leasing activity within our portfolio has improved meaningfully over the last year, with trailing twelve-month productivity up approximately 66%, reflecting both a continued gradual improvement in the overall market and the significant portfolio repositioning work that we have done in LA over the last two years. Of particular note within the region, Arrow in Long Beach is seeing a pickup in tour activity, as the local market begins to experience a resurgence in defense and aerospace requirements. Blackwelder in Culver City is seeing an acceleration in activity from a wide variety of users, including technology and AI companies. And Maple Plaza, a recent acquisition in Beverly Hills, is continuing to experience strong, broad-based demand from the financial services and media and entertainment sectors, notably surpassing our original expectations. In life sciences, KOP2 continues to outperform the broader South San Francisco market, as the project's purpose-built life science space and top-tier amenitization offerings resonate with decision makers who are showing a higher propensity to execute than they have at any time over the last several years. Subsequent to quarter end, we executed a 38 thousand square foot lease with Olema Pharmaceuticals, bringing the project to 49% leased. The future pipeline remains robust as we evaluate opportunities to complete the remaining lease-up of our multi-tenant building while also engaging with several large-format users for the remaining full-building opportunity, which represents the most compelling offering within KOP phase two, featuring premium views and the most prominent location within the project. Turning to capital allocation, during the first quarter, we continued to raise attractively priced capital through dispositions of non-core and non-strategic assets, with a long-term goal of enhancing the durability and growth profile of the company's cash flow stream. During the period, we sold two office properties, Kilroy Sabre Springs and Del Mar Tech Center, both in San Diego, for aggregate gross proceeds of $146 million. In both cases, these assets benefited from the consistent demand we have seen across markets from owner-users for well-located, high-quality real estate, driving a highly efficient execution for our shareholders. Subsequent to quarter end, we closed on the sale of our two Hollywood residential assets, Columbia Square Living and Jardine, for aggregate gross proceeds of $[inaudible], resulting in year-to-date operating property dispositions of approximately $350 million, exceeding our original full-year goal. Residential sales followed the implementation of a holistic asset management strategy for our residential portfolio through which we recognized significant margin expansion, resulting in a materially better valuation at the time of disposition. Following the transaction, our residential exposure is now limited to One Paseo Living, which we view as a core long-term holding given the asset's significant synergies with the retail and office components of the broader One Paseo campus, where we continue to achieve record-setting commercial rents. With proceeds from our first quarter dispositions, we elected to opportunistically capitalize on recent capital markets volatility, repurchasing approximately $73 million of stock at an average price of $30.80 per share. And in April, we fully redeemed the $50 million tranche of private placement notes scheduled to mature in July. Looking forward, we will continue to explore opportunities to harvest attractively priced capital from our existing portfolio while exploring the full range of redeployment alternatives available to us. In last night's release, we also announced the formation of a joint venture to develop a premier, substantially pre-leased Class A office asset in Downtown Redwood City, one of the strongest submarkets in the entire Kilroy Realty Corporation portfolio. This complex transaction was a long time in the making, requiring substantial effort and coordination across our platform, with our partner and with the project's anchor tenant. 1900 Broadway, which is fully entitled for a 250 thousand square foot office project, is located just blocks from Kilroy Realty Corporation’s highly successful Crossing 900 asset, which has remained 100% leased since delivery in 2015. Over time, we have consistently captured meaningful rent growth at Crossing 900, releasing over 80 thousand square feet since 2023, with cash rent spreads up nearly 60%. Concurrently with closing on the venture, we executed a 20-year lease with a top-tier global law firm for 145 thousand square feet, representing approximately 60% of the building, at the highest rates ever realized in the Kilroy Realty Corporation portfolio. Since closing, we have experienced strong inbound interest from a wide range of high-quality tenants, and we look forward to updating you on our progress as the project advances. Eliott will cover project costs, estimated returns, and timing in a few moments, but I would note that substantially all of our equity investment in this project has been prefunded through the land parcel sales that are currently under contract. Before turning the call over, I want to provide a few comments on the Flower Mart project. As Jeffrey will touch on in a moment, we have revised our expense capitalization assumptions for Flower Mart to reflect continued capitalization through the fourth quarter of this year. As we previously stated, we are working with the City of San Francisco to redesign and reimagine the Flower Mart project while maintaining and building upon our current approvals. In addition to seeking flexibility to develop a broader mix of uses, we are also looking to amend the existing development agreement and create a special use district to provide relief from certain planning code requirements, the specifics of which are still under discussion. The city, which has been a constructive and valued partner in this process, has suggested an alternative approach to analyzing and documenting the changes in the special use district, which we believe will ultimately increase our long-term flexibility and optionality, though the alternative approval process will take additional time. We now expect the process to be completed late in the fourth quarter and would assume that expense capitalization ceases at that time. We are highly convicted that the path we are pursuing at the Flower Mart will result in the best possible outcome for shareholders, and as always, we will continue to update you as the process unfolds. In conclusion, I want to thank the entire Kilroy Realty Corporation team for an incredibly busy quarter across nearly every facet of our business. Your efforts are creating meaningful value for all of our stakeholders, and I am grateful for your continued energy and enthusiasm. Eliott? Eliott Trencher: Thanks, Angela. Over the last several months, the capital markets have demonstrated continued momentum as buyers recognize the inflection in fundamentals and the positive impact AI is having on our market. As a result, transaction size is increasing and asset quality is improving. For example, the Transamerica Pyramid in San Francisco recently traded for $1.05 thousand per square foot, the first time an institutional property has eclipsed the $1 thousand a foot level in that market since 2022. Kilroy Realty Corporation continues to be an active seller, and during the quarter, we closed on $146 million comprised of the previously announced Kilroy Sabre Springs at $125 million and Del Mar Tech Center sold in March for $21 million. Del Mar Tech Center is a 40 thousand square foot building in the Del Mar submarket of San Diego, and at the time of sale, the building was roughly 50% leased with a weighted average remaining lease term of one year. We remain big believers in Del Mar Heights and are still the largest owner in the submarket, but selling this property made economic sense. Additionally, last week, we closed on the sale of our two residential towers in Hollywood for $[inaudible]. As many of you know, these towers were developed by Kilroy Realty Corporation as part of our Columbia Square and On Vine projects, and the layout of the campuses allows the residential to be separate and distinct from the neighboring office properties. We determined these buildings would be good sales candidates given the lack of synergies with the office as well as the depth of demand for high-quality apartments. Before bringing the properties to market, we spent time ensuring the operations and structure were optimized to facilitate a sale and maximize proceeds. The cap rate on all sales announced year to date averages in the mid-single digits. As a reminder, in addition to the operating property sales, we have $165 million of land sales under contract, with roughly half expected to close late this year or early next year. We continue to evaluate additional opportunities to sell or repurpose non-strategic land. Turning to acquisitions, as Angela mentioned, we closed on a joint venture to develop 1900 Broadway, a 250 thousand square foot project in Downtown Redwood City that is already roughly 60% pre-leased. 1900 Broadway is adjacent to Downtown Redwood City’s restaurant row, making it one of the most walkable and amenitized properties in the area and worthy of premium rents. Kilroy Realty Corporation was uniquely positioned to take advantage of this off-market opportunity given our deep market insight, strong local relationships, and proven development acumen. These factors gave our partner, Lane Partners, and our anchor tenant, Cooley, confidence in our ability to bring this deal together. We intend to break ground next year, and Cooley is expected to take occupancy in early 2030. The total anticipated cost for the project is $330 million to $350 million, of which our share will be 97% upon completion. Stabilized yields are expected to be in the low to mid-9% range. Before turning the call over to Jeffrey, I think it would be beneficial to summarize the substantial disposition progress we have made over the last two and a half years. As private capital returned to the office sector, Kilroy Realty Corporation meaningfully ramped up sales efforts with a total of roughly $980 million of land and operating properties completed or under contract. We have talked about individual transactions in detail on prior calls, but in total, this demonstrates the private market is open and functional and can be a source of attractively priced capital if executed thoughtfully. We elected to redeploy a portion of the sales proceeds into four high-caliber infill, amenitized, multi-tenant investments totaling roughly $765 million, which includes the full cost of building out 1900 Broadway. This capital recycling gives us a more diversified and sustainable cash flow stream while also making the portfolio more amenitized, walkable, and supply constrained. As a result of being a net seller of roughly $215 million, we were able to use a portion of the savings to pay down debt and opportunistically repurchase stock. We are proud of the progress made to date and intend to keep making the next best capital allocation decision one step at a time. With that, I will turn the call over to Jeffrey. Jeffrey Kuehling: Thanks, Eliott. Before turning to results, I want to highlight two disclosure enhancements this quarter aimed at providing investors with better visibility into leasing performance and how executed activity translates into future results. First, we have added a leasing spread calculation focused on space vacant for less than 12 months. This aligns with how most of our peers present spreads and better isolates true mark-to-market activity; our historical calculation remains unchanged and is presented alongside the new metric. Second, we have expanded our disclosure regarding signed but not commenced leases, which currently totals over 1 million square feet and nearly $78 million of contractually obligated annualized base rent. This disclosure highlights the embedded growth already in place and provides greater visibility into the forward trajectory of the operating platform. Turning to our financial results, FFO for the first quarter was $0.91 per diluted share. With respect to occupancy, as a reminder, KOP2 entered the stabilized pool during the quarter, impacting reported portfolio metrics. As a result, portfolio occupancy ended the quarter at 77.6%. Excluding KOP2, first quarter occupancy would have been 81.5%, down only 10 basis points despite our previously communicated first quarter move-outs. The dispositions of Kilroy Sabre Springs and Del Mar Tech Center completed during the quarter had no impact on overall reported occupancy. Cash same property NOI increased 1.8% in the first quarter, driven by lower bad debt expense and contributions from net expense settlements, restoration fee income, and other property income. These positive impacts were partially offset by detraction from base rent despite a marginal increase in overall occupancy, reflecting free rent periods from certain new tenants in the portfolio. On the leasing front, activity during the quarter resulted in GAAP spreads of negative 10.6% and cash spreads of negative 16.8%. Those spreads were driven primarily by two leases in San Francisco, both of which involved space that was vacant for longer than 12 months. Importantly, these were capital-light transactions that generated attractive net effective rent outcomes. These two leases were partially offset in the quarter’s reported spreads by the lease Angela previously mentioned at Crossing 900 in Redwood City, which not only generated the highest net effective rent of the quarter in our operating portfolio, but also delivered significant positive cash and GAAP releasing spreads. Leasing on space vacant for less than 12 months performed well, generating positive GAAP spreads of 19.2% and cash spreads of 5.2%. Turning to guidance, last night we increased our 2026 FFO guidance by $0.21 at the midpoint with a new FFO range of $3.49 to $3.63 per diluted share, reflecting improvement in our core portfolio and platform operations and updated timing assumptions on Flower Mart expense capitalization. With respect to Flower Mart, as Angela discussed, we are now assuming that expense capitalization will cease late in the fourth quarter. At that point, a little less than $1 million of quarterly operating expenses and real estate taxes along with $7 million of quarterly capitalized interest will begin impacting earnings. This change increased guidance by approximately $15 million to $16 million, or $0.14 per share, and it was reflected in the capitalized interest in development guidance provided last night. Cash same property NOI growth is now expected to range from 25 to 125 basis points, representing a 150 basis point increase at the midpoint from our prior range. This increase is driven by two factors. First, in April, we received a $5.9 million settlement related to the 23andMe bankruptcy, which fully resolves our economic interest in that process and contributes approximately 90 basis points to NOI growth. Second, strengthening fundamentals in our core operations, driven primarily by improving net expenses and increased average occupancy, contribute an additional 60 basis points to growth. We also raised the top end of our operating asset dispositions guidance range to reflect our progress to date. We moved decisively, closing dispositions earlier than anticipated and recycling capital into compelling investment opportunities, including $73 million of opportunistic share repurchases and prudent debt repayment. Looking ahead, and as Angela and Eliott noted, we will continue to take a balanced, disciplined approach to capital allocation, seeking opportunities to create value for shareholders while prioritizing balance sheet strength and financial flexibility. With that, we are happy to answer your questions. Operator: Thank you. We will now open the call for questions. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, please press star 1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. And if you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Manas Ebek from Evercore ISI. Your line is open. Please go ahead. Manas Ebek: Perfect. Thank you. And just wanted to say thanks, in the beginning, for the additional disclosures in the supplemental. It has been very helpful. My question was for Los Angeles and San Diego to see if you could maybe elaborate a little bit further on the leasing demand that you see there and how far along we are here on the recovery. Obviously, we understand, and it is great to see how positive San Francisco has responded recently. Robert Paratte: Hi, Manas. I will continue on the theme that Angela mentioned. Across the entire company portfolio, we are seeing an increase in activity, including tours, proposals, and done deals, and Los Angeles is no exception. In Q1, we signed 24 deals in LA, and we are seeing quite a bit of activity at our Long Beach project and Maple Plaza, and we are starting to see a pickup in activity at Westside Media Center on the West Side of LA and one of our other assets here. Our pipeline continues to grow in the LA market. Following on the 24 deals I mentioned, we have more deals that are in the pipeline and leases actually, but we are not going to quantify all that until they are done. It is improving, and again, I would say this across our entire portfolio: we are seeing a continued flight to quality. It is a world of haves and have-nots, so the recovery is not the same for all owners or all properties, and we are benefiting from having these high-quality assets in LA, San Diego, etc. At Nautilus, which I will really focus on because that is our newest acquisition, we had 400 thousand square feet of tours since January 1. We have several tenants that are looking to grow in the project, and we continue to entertain tours and the other normal activity that goes with leasing, and we could not be happier with that. The amenities are really showing well now. Now that it is spring, everything looks great at the site, so very happy with that. At Kilroy Center Del Mar, we are seeing an exceptional amount of activity. Our spec suite program there is really paying off as it is in other markets like Austin, and we are going to continue on that front, being very strategic in bringing spec suites to market but providing what the market wants. Operator: Thank you for your question. Your next question comes from the line of Anthony Paolone from JPMorgan. Anthony, your line is now open. Anthony Paolone: Great. Thank you. My first question is on 1900 Broadway and wondering if you could talk about the expected yield you expect to make on that and where rents need to be for the unleased space to achieve it? Eliott Trencher: Tony, in my prepared remarks, I mentioned that we are expecting stabilized yields in the low to mid-9% range. We have leased 60% of the building and have a good rent comp for where market rents are, so if we replicate that, we will be in really good shape. Angela Aman: I would also emphasize, as we have discussed about 1900 Broadway, it is really just a few blocks away from our Crossing 900 asset, where we have leased 80 thousand square feet over the last couple of years at rents that are up on average 60%. We have a lot of data points in the market in addition to the Cooley lease that point us to where rents should be in this market. As Eliott mentioned in his prepared remarks, 1900 Broadway is adjacent to restaurant row in this submarket, so it is highly walkable, highly amenitized, and really should command premium rents as we saw in the transaction that has already been executed. We are excited about having additional supply to lease in what has been and continues to be one of the strongest submarkets in the entire Kilroy Realty Corporation portfolio. Anthony Paolone: Okay. Thanks for that. And then just maybe I missed this, did you give a cap rate on the two resi sales? Eliott Trencher: We gave cap rates for all the sales that we have done to date, which were in the mid-single digits. The resi sales were around the 4% range. Operator: Thank you for your question. Your next question comes from the line of John Kim from BMO Capital Markets. John, your line is now open. John Kim: Thank you, and thanks for the new disclosure. On the signed leases not commenced, I was wondering what was driving most of the leases, 86% to net leases. I know that KOP2 is a big part of that, but assuming 1900 Broadway is as well, it would suggest the yield on that could be closer to 13% versus 9%. I am wondering if I have my math right and if there is any conservatism in that number. Angela Aman: There is not much to point to in terms of why the population of signed but not commenced is skewed so much to net leases. It really is just a mix issue and the properties and markets that make up the signed but not occupied pool at this point in time. On the yield, I would just reiterate what Eliott mentioned in his prepared remarks and in response to the last question: stabilized yield on this project, we think, is in the low to mid-9% range. We think it is very compelling. There is going to be good growth at this project over time as well, again in one of the strongest submarkets in the Kilroy Realty Corporation portfolio, so we feel like the development upside here is worth what is a relatively small amount of leasing still to complete at this project. John Kim: Okay. And at Flower Mart, I know you talked about extending the capitalized interest. What is the possibility that you keep development going forward? I know that you are committed to One Paseo, and this looks like this could be another mixed-use development with a big multifamily component. Just wanted your latest thoughts on the Flower Mart as far as keeping it as a development project. Angela Aman: We are watching the San Francisco market really closely as well as how things evolve in addition to where we are able to take the process we are going through right now in terms of design and entitlement flexibility and optionality. There is still a lot for us to sort out as we move through this process, and we have time as this process continues to unfold to watch what happens with both commercial and residential rents within the City of San Francisco. We are committed to making sure that whatever we do in terms of next steps in 2027 and beyond at the Flower Mart project maximizes value for shareholders. Prior to the pandemic, the company had a very strong plan to develop this on the commercial side. We are exploring a broader mix of uses that would allow us, as you mentioned, to add more residential into the project. We need to see how the market continues to evolve and what the project ultimately looks like to decide what the optimal execution path is. Maintaining a lot of flexibility and prioritizing optionality is a way to create additional economic value at the Flower Mart. Operator: Thank you for your question. Your next question comes from the line of Seth Bergey from Citi. Your line is now open. Seth Bergey: As you think about the revised disposition guidance, what would get you to the higher end? Are you just evaluating the depth of the buyer pool and any changes you have seen in terms of demand for assets? And then are there any submarkets you would look to exit within that revised disposition range? Eliott Trencher: The revised disposition range at the low end implies that we stop with what we have done to date, and then we have about $150 million at the high end of the range beyond what we have done. That clearly has some room to execute, and our approach is going to be consistent with what we have talked about in the past, which is if we can find compelling opportunities, then we are going to pursue them, and we wanted to reflect that with an adjustment to the disposition range. There is not a particular market or submarket that we are focused on exiting. We are really just looking for the way to maximize proceeds on good execution on assets that we think are going to be mispriced given our forward-looking view. Angela Aman: I would add to echo some of what Eliott mentioned in his prepared remarks: in addition to healthy demand that we have seen over the last couple of years, particularly from owner-users looking to acquire assets, we have really seen a resurgence in institutional demand and interest across our West Coast markets. Where there are opportunities, as Eliott just mentioned, to take advantage of that renewed demand for West Coast commercial assets, we want to make sure we allow ourselves enough room within the guidance range to be able to capitalize on that. Seth Bergey: And then I think in the prepared remarks, you mentioned AI and technology as a demand driver for some of the LA submarkets. Do you think LA will have a spillover effect from San Francisco and be a large component of recovering that market? Or how do you quantify the impact that AI can have on a market like Los Angeles? Angela Aman: We are not suggesting it is going to be a huge driver of demand in the LA market. We have certainly seen a lot more San Francisco-native or AI-native companies leasing space particularly in the Pacific Northwest, where there is a much larger resident talent pool in the tech sector. We have certainly seen the spillover benefits in that market. We are seeing some of it in the LA market. It is pretty concentrated in a few specific submarkets—Culver City in particular. It is interesting to note that we are seeing some of those tenants pop up. It is great from a marginal demand standpoint, but we are seeing much broader demand, even in markets such as Culver City, across different industry categories as well. Operator: Thank you for your question. Your next question comes from the line of Andrew Berger from Bank of America. Andrew, your line is now open. Andrew Berger: Sounds like the first quarter was a very strong quarter for leasing. Could you talk a bit about where the pipeline is today and if there is any way to quantify how big it is going forward? I think last quarter you said it was up about 65% year over year. Robert Paratte: Andrew, the change in San Francisco is so dramatic over the last 12 to 18 months that it is actually hard to pinpoint the pipeline because it continues to grow. To add some color to what Angela was talking about with the three consecutive quarters of positive absorption, there were 13 deals done in Q1 over 100 thousand square feet, and that is a very big number for the city. Another really important note is that 5 million square feet of availability has been absorbed since its peak in mid-2025, and that is very meaningful because that availability rate was really the headline that had everyone concerned. A third point that is really important is that these deals—both the 100 thousand square feet plus and other parts of that 3 million square feet—are expansionary, and that is also a very positive indicator. You look at our deal with Harvey, for example, where they took an additional 60 thousand square feet. The pipeline for us keeps growing. Our team has done a terrific job at 201 Third, as Angela pointed out. We are focused on 360 Third and 303 Second. We are talking to folks about 345 Brannan. So SoMa was the strongest submarket of the San Francisco market, and Kilroy Realty Corporation is a direct beneficiary of that because that is where all of our assets are. We are poised and ready to start executing, and things are looking really good; the momentum, not only for us but others in the market, is quite strong. Andrew Berger: And it sounds like speed to occupancy is becoming more important. Can you talk a little bit more about this? How much of the comments around speed to occupancy are related to AI-type tenants versus tenants more broadly? And you mentioned spec suites—can you talk a little bit more about which markets you are leaning into spec suites more and what type of results that is creating for your leasing teams? Robert Paratte: I will use the Olema example. They are in two different spaces in San Francisco. One was a space that was not current or modern enough for their needs. The other is a space where they got pushed out by an AI company, and so that created an immediate need for space, and we were ready to execute on that because they are taking a portion of our spec labs and to-be-built space. That is a very good example of what is happening. You either have rapidly growing AI companies that organically need space, or others are getting displaced by larger AI companies. One point I would raise about San Francisco is that the FIRE category was quite active in Q1—venture capital, banking, and finance. San Francisco is really hitting on all cylinders from both the traditional as well as technology front. In terms of our spec suites strategy, it is case by case and market by market. If we have a spec suite or two in a building and they have not leased, we are not going to build more until we have activity on that, and we have been really judicious about how we apply it. The markets where we have seen a lot of traction with spec suites are clearly San Francisco, Seattle, Austin, San Diego, and parts of LA. Angela Aman: It has been an interesting dynamic. At 201 Third, we built out five spec suites on one floor with some shared common space and a conference center, and having all five leased before we had completed construction was really telling in terms of where demand is, particularly in the submarket with earlier-stage companies and the degree to which they are prioritizing speed to occupancy. In markets like Austin, as Rob mentioned, we have seen a similar dynamic over a longer period of time, where every time we begin building out the spec suites, we have a different level of interest than we had from pure shell conditions. We have tried to be thoughtful and disciplined about how we are building out spec suites, both to make sure we do not get over our skis on specific sizes as market demand may shift and to make sure that we have inventory at these projects at all times. As they get leased up or as we see incremental interest, we are prepared and willing to lean in and replicate success from earlier phases of the spec suite program. Across most of our markets, it has been highly effective and has driven both a higher lease rate and faster occupancy commencements over the last couple of years. Operator: Thank you for your question. Your next question comes from the line of Nicholas Yulico from Scotiabank. Nicholas, your line is now open. Nicholas Yulico: Thanks. I had a couple questions on specific buildings. In terms of West 8th, I know you have had a lot of leasing traction there. Can you talk a little bit more about the dynamic of taking market share in Seattle versus pulling tenants that are maybe looking at Seattle and Bellevue? And then secondly, on 360 Third, San Francisco, I think you have an expiration there, a little over 100 thousand square feet this year. If you could talk about the traction on that and remind us when that expiration is. Robert Paratte: On West 8th, two factors are in play in terms of the absorption we have done. Both SoFi and General Motors are new to market. What really played into that is the renovation that we did at West 8th and the traction that we have built with Databricks and other tenants in the market. This part of town, Denny Regrade, right on the edge of the traditional CBD, is where people want to be. It is where the talent is either living or very close by, and it has the type of amenities tenants want. That is causing that absorption and what we are able to capitalize on. In Bellevue, we expect to see, but we have not yet seen, a direct correlation between higher rates in Bellevue and more absorption in Seattle. Most tenants are pretty focused on being in one or the other, but over time we may see some tenants flow from Bellevue to Seattle. At 360 Third, we do have that expiration coming up. We have been marketing the space. We have had conversations with larger tenants over 100 thousand square feet and others around 50 thousand square feet. We are focused on the asset. The proximity of 360 Third between the Bay Bridge and BART and Muni is really strategic for a lot of companies—that is why it did well in the past, and we expect the same going forward. Jeffrey Kuehling: Nick, just to clarify, the 360 Third expiration is a little over 100 thousand square feet in Q2. Nicholas Yulico: Okay, thanks. And that is a known vacate? Jeffrey Kuehling: Yes. Nicholas Yulico: Okay. Thank you. And then just a question on DIRECTV. Any latest thoughts there on a renewal possibility? If it is not a renewal, I think you were contemplating some other uses for the asset or a potential sale. Any thoughts there? Robert Paratte: I do not want to give too much color, but DIRECTV is a possibility. We have some other activity. The project is really well amenitized with terrific outdoor spaces and landscaping, and we have been pushing the marketing of that. We do have some conversations going on. Angela Aman: Remember, it is only a little less than 50 thousand square feet in the 2026 expiration pool. A larger portion of that lease does not expire until 2027, so we have time to work through that. Operator: Thank you for your question. Your next question comes from the line of Blaine Heck from Wells Fargo. Blaine, your line is now open. Blaine Heck: Thanks. I was hoping you could talk more specifically about the forward leasing pipeline at KOP2. How much of the demand is for spec suites versus larger spaces? Anything you could tell us about tenant profiles, and whether the mid-5% yield forecast is still intact? Robert Paratte: The pipeline is similar to what we executed on in Q4 and Q1—basically life science focused, primarily and almost exclusively. The tenant ranges in size down in South San Francisco right now: the bulk are probably 10 thousand to 50 thousand square feet—that is probably 50% of the demand in the market—and there are quite a few. There are over four requirements over 100 thousand square feet in the market, and there are some significantly above 100 thousand square feet. As Angela alluded to, we are working on filling the rest of Building F, which is our multi-tenant building, and we are in conversations on the vacant building, which is the most prominent of the three buildings on the campus and really has terrific signage opportunities and prominence for tenants that want that. Angela Aman: We confirm the yield expectations we shared last quarter in the mid-5% range. Those are still fully intact. Blaine Heck: Great. Thank you both. Then switching gears to capital allocation, can you give us an update on your thoughts on share repurchases going forward, just given where the stock is trading? How do you think about their attractiveness relative to acquisitions or development? Angela Aman: What we have demonstrated over the last couple quarters is a desire to make sure that as we think about capital allocation, we are prioritizing balance sheet strength and flexibility and employing a balanced approach. You have seen us be active on acquisitions going back several quarters. You saw us this quarter pair operating property disposition proceeds realized during the quarter with debt repayment for a balanced approach and execute share repurchases, just like we told you we would, in a leverage-neutral or deleveraging way. We continue to see good value in the stock. We also appreciate the significant capital markets volatility, especially in our sector, and we want to keep enough financial flexibility to step in when we see periods of significant dislocation. As discussed earlier, we increased operating property disposition guidance. The land sale proceeds we have already announced are earmarked for 1900 Broadway and that is effectively fully funded from an equity standpoint. Additional operating property disposition proceeds will be available for balanced redeployment based on how we see the full set of alternatives at that point in time. Operator: Thank you for your question. Your next question comes from the line of Brendan Lynch from Barclays. Your line is now open. Brendan Lynch: Thank you for taking my questions. You have managed our expectations on churn this year. Maybe you could give us your current expectations on the retention rate for the remaining 740 thousand square feet that are set to expire. Angela Aman: Going back a couple of quarters, when that pool was larger—probably around 1 million square feet—we expected the vast majority of those lease expirations would be move-outs. If you go back two years and look at what was in totality in the 2026 pool, which was about 2 million square feet, we did successfully renew a number of those spaces early during 2025. The blended retention rate on that initial almost 2 million square foot pool of 2026 expirations was about 40%, maybe a bit better than 40%, relatively in line with historical pre-pandemic averages. That said, when we look at the lease expiration schedule right now for 2026, there are a few opportunities to work through some renewals, but they are reasonably limited. From a reported retention standpoint, you will also begin to see us renewing early some of the 2027 expiration pool, so it is harder to tell you exactly in any given quarter what the reported retention rate will look like. For modeling, the bulk of the 2026 remaining expirations will be move-outs. Brendan Lynch: Thank you. And are you still anticipating that occupancy troughs in the second quarter? Angela Aman: Yes. Given the pace of move-outs—you can see that on the lease expiration page—Q2 is by far our biggest move-out quarter during 2026. That is our current expectation. Operator: Thank you for your question. Your next question comes from the line of Upal Rana from KeyBanc Capital Markets. Your line is now open. Upal Rana: Thank you. On dispositions, do you anticipate elevated dispositions or being a net seller to continue into 2027? Or will 2026 be the bulk or the tail end of it? Eliott Trencher: It is a little too early to talk about 2027. The way we have approached dispositions to date is to be flexible and dynamic, look at what the market is telling us, take those signals, and do what we think is in the best interest of shareholders. We gave guidance on what we thought dispositions would be to date in 2026. We executed beyond that and we are adjusting, and we will continue to take that approach. To the extent that we still see appealing opportunities, we will continue to sell, and if not, we will not. Angela Aman: That is the right way to frame it. This has been an opportunistic exercise. I would not frame it as how much we have to sell. Especially when you think about what we did during the quarter and what we announced last night in terms of the residential sales—those were have-to-sell transactions only in the sense that there was a real opportunity to raise very attractively priced capital on behalf of our shareholders, and we took advantage of that. We will continue to be opportunistic as we evaluate the disposition pool, prioritizing balance sheet strength and flexibility and making the company’s cash flow stream more durable and faster growing over the medium to longer term. Upal Rana: Great, that was helpful. And then, Angela, you mentioned Maple Plaza seeing strong, broad-based demand. Could you provide more detail there and any update you could provide on Beverly Hills broadly? Angela Aman: We have seen great traction there overall. The lease-up and our retention experience with respect to some tenants we had originally underwritten to vacate has been much better than we expected. Demand is from a broader mix—media and entertainment, financial services, professional services—not overly tied to any one sector. We are encouraged about the momentum we are seeing there and the long-term potential for Beverly Hills overall. Eliott Trencher: On the capital side, all that we have seen in the market since we acquired has reaffirmed that capital really wants to be in Beverly Hills. We have seen a wide array of capital focused on Beverly Hills, and we feel really good about when we bought the building. Robert Paratte: We are really happy with the leasing momentum we have. We are leading the market right now at Maple Plaza. There is a lot of media, private wealth, and financial services demand, as Angela pointed out. In cases like Maple and at 201 Third, you start building momentum in leasing and that attracts other activity. We have worked hard since taking the project over to improve the lobbies and landscaping, and it is showing well. We are really happy with the rental rates; based on underwriting, we are exceeding underwriting in all cases. Operator: Thank you for your question. Your next question comes from the line of Tom Catherwood from BTIG. Your line is now open. Tom Catherwood: Thank you. Maybe, Rob, starting with you: from a lease strategy perspective, over the last year or so, you have put some tenants into shorter-term leases with the hope that some could grow into more space or convert into longer-term leases. For some of the demand that you are talking about today, are some of those shorter-term leases actually converting longer term? Robert Paratte: Some are, but a lot of it is also a trend in the market as tenants are willing to commit with conviction—meaning longer-term leases. In the case of Olema, it is a longer-term lease, and in some other cases, it is a short-term deal that we have extended. We are hitting it on both fronts. Angela Aman: Specifically in the San Francisco CBD, where we have talked about this trend being most pronounced, the execution with Harvey this quarter underscores why we thought it made sense to do that original deal last year. It was a shorter-term deal with very little capital spend, reusing existing improvements left over by the prior tenant—very positive NER but shorter term. The reason they wanted flexibility was not that they wanted out at the end of the term; they did not know their full space requirements and wanted flexibility to meet growth objectives. Where we have worked with tenants and gone a little shorter term, it has been with a view to accommodating their future growth. The Harvey example—leasing 93 thousand square feet last year and another 62 thousand square feet this quarter—speaks to why that strategy in certain submarkets and for certain tenants has been highly effective. Tom Catherwood: Perfect, that was exactly what I was looking for. And then, Angela, as you work through a revised program for the Flower Mart, is there a potential outcome where capitalization carries beyond December, or is that more of a hard stop? Angela Aman: At this moment in time, we feel that is a pretty hard stop, with a view to finishing the revised design and entitlement process with the city—getting to the point where we have more flexibility around the mix of uses and greater ability to phase the project. Once we complete that, we are waiting for demand to be sufficient in the market at rents that will justify new construction. Right now, we think there is a gap that would necessitate us stopping capitalization probably late in the fourth quarter of this year. We are watching the San Francisco market closely. There are very few large contiguous blocks of high-quality space remaining available. It is a low probability, but not a 0% probability, that there is something demand-driven and actionable as we get into 2027. Right now, I would say it is a low probability, but not 0%. Operator: Thank you for your question. Your next question comes from the line of Caitlin Burrows with Goldman Sachs. Your line is now open. Caitlin Burrows: Maybe just a follow-up on Flower Mart. If you were to stop capitalizing in 2026, put a pause on the project, and then resume whether it is six months or multiple years later, would full capitalization come back, or would you then start capitalizing on the incremental spend? Jeffrey Kuehling: In the event that we do have a great outcome where we can start capitalizing in the near future, it would be on the full accrued balance. It would not be just the marginal spend. It would be the same rate that you are seeing today. Caitlin Burrows: Got it. And then maybe back to the leasing pipeline today versus a quarter ago. Do you think the leasing pace of over 550 thousand square feet is sustainable, or what is required to meet the low versus high end of the occupancy guidance this year? Robert Paratte: I would love to be in the prediction business, but I can just tell you that the demand we are seeing is real, and all of our teams are busy. I could not be happier with our whole leasing team and the people that support them in getting these things executed. We are really busy, and more to come. Operator: Thank you for your question. Your next question comes from the line of Dylan Burzinski from Green Street. Your line is now open. Dylan Burzinski: Hey, thanks. Not to ask you another question geared toward predicting anything, but going to do so anyway. Things continue to be firing on all cylinders in San Francisco. Do you have any sense for how far behind LA and then the Seattle CBD is relative to what you are seeing in San Francisco and the broader Bay Area? Angela Aman: In the Pacific Northwest, Bellevue has been very strong for the last couple of years. Availability has continued to compress and rents have performed very well. That market feels very tight right now. Over the last couple of quarters, our assets in Seattle—not in the downtown core but in Denny Regrade/South Lake Union—have definitely seen increased momentum. With roughly 150 thousand square feet signed over the last couple of quarters, we feel like there is a lot more momentum in Seattle, from very high-quality tenants and a broader mix of uses. LA feels like it is gradually improving, and I would candidly admit that improvement is gradual. The improvement in our pipeline and executed productivity has been due to both that gradual market improvement and the significant portfolio reallocation work we have done within LA over the last couple of years. Our portfolio is better positioned to capture what has been a slowly improving market in LA. There are pockets performing better—Arrow in Long Beach benefiting from a resurgence in defense and aerospace up through the South Bay, including El Segundo. LA will be a broader aggregation of industries moving in the right direction, and we are cautiously optimistic, but it will be a step behind. Dylan Burzinski: That is incredibly helpful detail, Angela. I appreciate it. One more: as you look at lease expirations next year, I think they are largely Q1-weighted if we exclude the DIRECTV lease expiration in 2027, which sounds like it is in flux. As you reach out and get a sense for renewal possibility for next year, are tenants more receptive than they were coming into 2026 and 2025? Angela Aman: We have a couple of things going for us in 2027. It is a considerably smaller expiration year than 2026 was a year ago. The largest expiration next year is AT&T/DIRECTV, which is a fourth quarter expiration. Outside of that, the pool is very granular—nothing above 100 thousand square feet and only one lease between 50 thousand and 100 thousand square feet. We are beginning some of those conversations. We have expirations happening in some pretty strong markets where we are already having conversations either about renewal or significant interest from potential backfill tenants. We need to keep our heads down and execute as it relates to the 2027 pool. The overall size and granularity of that pool outside of AT&T/DIRECTV is encouraging. Operator: Thank you for your question. Your next question comes from the line of Michael Carroll from RBC Capital Markets. Your line is now open. Michael Carroll: Thanks. I wanted to circle back on Rob’s comments regarding the leasing pipeline. Has that pipeline continued to build and grow? Is it bigger today than it was at the beginning of 2025? Robert Paratte: Absolutely. It continued to grow throughout 2025, and the pipeline is increasing now. There is a pending transaction that is relatively significant that is going to happen in SoMa probably in Q2—not with us—but it is another indication that the market is thriving and SoMa is on a tear right now. The real upswing started mid-2025 and picked up steam for the rest of the year and into Q1. Michael Carroll: And is the volatility that you are highlighting mainly driven by the San Francisco market? Are tenants getting taken out of the pipeline because they are leasing space, or are tenants delaying decisions or finding it hard to quantify their space needs? Robert Paratte: On the positive end, it is hard to pinpoint because literally every week there is new demand coming from tenants. Angela Aman: And significant demand—larger format tenants. The size of the pipeline is up materially year over year, and we have also seen an increase in average size requirements, with more tenants between 50 thousand and 100 thousand square feet. You have seen that in the execution stats as well. The pipeline being marginally up over the last quarter or two while we have had substantial executions is a really good sign. Robert Paratte: The last thing I would say, Michael, is that rolling twelve-month leasing totals have returned to historical averages in San Francisco—about 9 million square feet. That gives you more color on the pipeline. Operator: Thank you for your question. Your next question comes from the line of Peter Abramowitz from Deutsche Bank. Your line is now open. Peter Abramowitz: Thank you. Most of my questions have been asked, but one on software tenants in the portfolio and potential tenants. Could you give some color on the tone of conversations with software tenants these days, particularly in the Bay Area? It seems so far this year that the equity markets are pricing these companies as if there is an existential threat to their business. What is the tone of conversations with them, and have there been any meaningful additions to the sublease market from that portion of the portfolio? Angela Aman: Going back several years to the height of the pandemic, software was a category where we saw some of the largest blocks of sublease space. Thankfully, many of those blocks have been spoken for. While it might look one way on the lease expiration schedule, we have a much more granular tenancy within some of that space and tenants that we believe—especially in San Francisco—have a high likelihood of renewing or going direct with us down the road. A lot of that headline impact has already been felt in the portfolio and was felt several years ago. That space was successfully re-leased in many circumstances. I am not aware of any conversation we have had in the last six months where the tone from those tenants has changed in any material way. Robert Paratte: I agree. We have software companies we are talking to that need more space. The news is national, but on the ground we are not seeing pullbacks—rather increased demand. Operator: Thank you for your questions. There are no further questions at this time, and this concludes today’s call. Thank you for attending. You may now disconnect. Before you buy stock in Kilroy Realty, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Kilroy Realty wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Kilroy Realty (KRC) Q1 2026 Earnings Transcript was originally published by The Motley Fool