KRC - Embedded Expectations Analysis - 2021 04 28
Kilroy Realty Corporation (KRC:USA) currently trades above corporate averages relative to UAFRS-based (Uniform) earnings, with a 40.5x Uniform P/E. At these levels, the market is pricing in bullish expectations for the firm, but management may have concerns about development opportunities, the demand for their office space, and regulatory headwindsSpecifically, management may lack confidence in their ability to resume securing redevelopment opportunities at Blackwelder and capitalize on office needs for newly added jobs in Silicon Valley. Furthermore, they may have concerns about the impact of work-from-home headwinds on office space demand and the impact of early lease terminations on their ground-up development. Moreover, management may lack confidence in their ability to capture the growing demand for collaborative workplaces, sustain strong renewal rates in San Francisco, and see a leasing volume recovery following the success of the vaccine-rollout. Finally, they may have concerns about the continued rise in rent deferrals, the office real estate drag of the pandemic, and California regulatory headwinds
Kilroy Realty is a self-administered real estate investment trust engaged in premier office and mixed-use submarkets along the West Coast. The company owns, develops, acquires and manages real estate assets, consisting primarily of class A properties in the coastal regions of Greater Los Angeles, San Diego County, the San Francisco Bay Area and Greater Seattle. The company owns its interests in all of its real estate assets through Kilroy Realty, L.P. (Operating Partnership) and Kilroy Realty Finance Partnership, L.P. and conducts substantially all of its operations through the Operating Partnership. The company's stabilized portfolio of operating properties include stabilized office and residential properties.
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