Kilroy Realty (KRC) Q3 2024 earnings summary

Executive summary

• Achieved strong operational and financial performance in Q3 2024, with FFO of $1.17 per share, up from $1.12 in Q3 2023, and net income per diluted share of $0.44.

• Revenues increased 2.2% year-over-year to $289.9 million, with stable occupancy at 84.3% and 436,000 sq ft of leases signed, including significant short-term renewals.

• Completed the acquisition of Junction at Del Mar, a 104,000 sq. ft. office property in San Diego for $35 million, 96% leased.

• Increased full-year FFO guidance by $0.15 per share at the midpoint, reflecting improved outlook and performance.

• Robust demand observed in Bellevue, South Lake Union, and San Diego, with signs of recovery in Seattle and San Francisco.

Financial highlights

• Q3 FFO was $1.17 per diluted share, including $0.05 per share from one-time items, and net income available to common stockholders was $52.4 million.

• Net operating income was $196.7 million, up 1.7% year-over-year, and adjusted EBITDA was $185.96 million.

• Updated 2024 FFO guidance to $4.38-$4.44 per share, up $0.15 at the midpoint.

• Cash same property NOI growth was 2.7% in Q3, with a 230 bps impact from one-time items.

• Dividends declared per common share remained at $0.54, annualized at $2.16.

Outlook and guidance

• Full-year 2024 Nareit-defined FFO per diluted share guidance is $4.38 to $4.44, midpoint $4.41.

• 2024 same property NOI growth guidance increased to -2% to -1.5%, a 175 bps improvement at the midpoint.

• Q4 FFO expected at $1.03 per share, down $0.14 from Q3 due to absence of one-time items and lower NOI.

• Development spending to moderate in 2025 as Kilroy Oyster Point nears delivery; 2024 development spend expected at $250–$275 million.

• General and administrative expenses expected at $74–$76 million.