Kilroy Realty Corporation reported a significant decline in financial performance for the second quarter of 2026, with total revenues of $272.4 million, down from $289.9 million in the same period last year. The company's net income available to common stockholders fell to $19.9 million, or $0.17 per share, compared to $68.4 million, or $0.58 per share, in the prior year. For the first half of 2026, revenues totaled $542.4 million, a decrease from $560.7 million in the first half of 2025, while net income dropped to $0.6 million from $107.5 million.
The decline in revenue and profitability can be attributed to several factors, including a decrease in rental income, which fell to $268.3 million from $285.1 million year-over-year. The company also experienced a notable reduction in lease termination fees, which decreased by $10.4 million compared to the previous year. Additionally, Kilroy Realty recorded an impairment of real estate assets amounting to $61.8 million, further impacting its financial results.
In terms of operational developments, Kilroy Realty's stabilized portfolio consisted of 123 office and life science properties, totaling approximately 17.1 million rentable square feet as of June 30, 2026. The company completed the stabilization of the Kilroy Oyster Point Phase 2 project, which added 871,738 square feet to its portfolio. However, the overall occupancy rate for the stabilized portfolio decreased to 77.0% from 81.6% in the previous year, reflecting challenges in maintaining tenant occupancy amid changing market conditions.
Strategically, Kilroy Realty has been active in its capital recycling program, completing the sale of four operating properties for gross proceeds of approximately $347.5 million during the first half of 2026. The company also amended its unsecured revolving credit facility, increasing its borrowing capacity to $1.25 billion and extending the maturity date to July 31, 2030. Looking ahead, Kilroy Realty aims to leverage its available liquidity, which stands at approximately $1.6 billion, to navigate market uncertainties and pursue future development opportunities. The company remains committed to maintaining its status as a Real Estate Investment Trust (REIT) and plans to continue making regular quarterly cash distributions to its stockholders.
About KILROY REALTY CORP
Kilroy Realty Corporation is a REIT specializing in the ownership, development, and management of office, life science, and mixed-use properties primarily in California, Washington, and Texas. It focuses on modern, sustainable buildings that attract technology, life sciences, and business tenants. The company emphasizes long-term growth through development, redevelopment, and strategic capital recycling, leveraging strong tenant relationships and sustainability leadership to deliver value.
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