Kilroy Realty (KRC) Stock Forecast & Price Target

Kilroy Realty Corporation demonstrates a positive outlook due to improving dynamics in its key markets, particularly in San Francisco, where management has noted increased foot traffic and higher renewal rates. The office recovery is further supported by a notable rise in lab demand, which has seen a 73% sequential increase, indicating a growing necessity for office space in the area. Additionally, confidence in re-leasing its San Francisco Bay Area expirations is bolstered by the demand stemming from the emerging AI sector, suggesting a robust recovery trajectory for the company.

Kilroy Realty faces a negative outlook primarily due to projected declines in its funds from operations per share (FFOPS), with estimates for 2026 and 2027 revised downwards to $3.49 and $3.78, respectively, indicating potential challenges in revenue generation. The company is also grappling with land monetization issues and an anticipated pause in recovery for the San Francisco office market, particularly if demand for artificial intelligence-related office space normalizes. Additionally, the broader office market remains under pressure from significant vacancies, creating a softer near-term demand backdrop that could hinder Kilroy’s operational performance.