Kilroy Realty (KRC) Stock Forecast & Price Target

Kilroy Realty is well-positioned for future growth due to improving market dynamics, particularly in San Francisco, where an uptick in foot traffic and a significant increase in lab demand indicate a recovering office sector. The company has successfully achieved attractive renewal rates of approximately 5%, reflecting strong tenant retention and confidence in its property offerings. Additionally, Kilroy Realty's strategic focus on high-demand markets and its ability to navigate near-term challenges provide a solid foundation for anticipated leasing success, particularly in the San Francisco Bay Area amidst a rising need for office space driven by the growing AI sector.

Kilroy Realty's negative outlook is driven by anticipated stagnation in office recovery across West Coast markets, which may be exacerbated by a decline in AI-driven demand. The company's revised funds from operations per share (FFOPS) estimates for 2026 and 2027 have been lowered to $3.49 and $3.78, respectively, indicating a weakening financial trajectory. Additionally, the ongoing challenges in the broader office market, characterized by high vacancy rates and a soft near-term demand environment, further complicate the company's growth prospects.