The Bull Case For Kilroy Realty (KRC) Could Change Following Strong Profit Growth Despite Revenue Decline

• Kilroy Realty Corporation released its third quarter and nine-month 2025 earnings, reporting net income of US$156.22 million for the quarter and US$263.68 million for the nine-month period, both of which were considerably higher than the prior year despite lower year-over-year sales and revenue.
• This substantial increase in profitability, particularly in earnings per share, stands out given the challenging environment for office real estate and softer revenue trends.
• With third quarter net income significantly outpacing revenue growth, we'll examine what this means for Kilroy Realty's investment outlook.

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Kilroy Realty Investment Narrative Recap

To be a Kilroy Realty shareholder, you need confidence in the company’s ability to deliver resilient net income and dividend stability even as softer office leasing and continued work-from-home trends limit revenue growth. The Q3 results, with net income sharply higher but sales lower, reinforce the company's efforts to generate profit but do not meaningfully change the biggest short term catalyst or the main risk: persistent pressure on occupancy rates and rental yields from ongoing shifts in office demand.

The September 2025 acquisition of Maple Plaza, a modern Beverly Hills office campus funded from recent asset sales, stands out as the most relevant recent business development. While aligning with Kilroy’s shift toward high-quality assets in supply-constrained markets, the deal’s long-term contribution depends on fundamentals in West Coast office leasing, a focus that ties back to revenue stability as the core catalyst for shareholder returns.

However, with occupancy and rent growth under continued pressure from evolving office use, investors should make sure they consider...

Read the full narrative on Kilroy Realty (it's free!)

Kilroy Realty is projected to generate $1.1 billion in revenue and $64.0 million in earnings by 2028. This outlook is based on a slight annual revenue decline of 0.2% and a significant decrease in earnings of $154.5 million from the current $218.5 million.

Uncover how Kilroy Realty's forecasts yield a $42.00 fair value, a 3% downside to its current price.

Exploring Other Perspectives

Retail investors in the Simply Wall St Community place Kilroy's fair value between US$42 and US$51.04, based on three distinct estimates. Keep in mind that ongoing weak long-term office demand may limit the upside that some participants expect, so explore these varying viewpoints for broader context.

Explore 3 other fair value estimates on Kilroy Realty - why the stock might be worth just $42.00!

Build Your Own Kilroy Realty Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Kilroy Realty research is our analysis highlighting 3 key rewards and 4 important warning signs that could impact your investment decision.
• Our free Kilroy Realty research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Kilroy Realty's overall financial health at a glance.

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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.

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