Kilroy Realty Corp's (NYSE:KRC) near-term performance is likely to be impacted by a decline in capitalized interest, according to JPMorgan.
The Kilroy Realty Analyst: Analyst Anthony Paolone maintained an Overweight rating, while cutting the price target from $42 to $40.
The Kilroy Realty Thesis: The company has been indicating less capitalized interest in 2026 for a couple quarters, Paolone said in the note.
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Kilroy Oyster Point – Phase 2 (KOP II), which is Kilroy Realty’s $1.025 billion life science development in San Francisco, is currently "0% leased," he stated.
If the Street lowers estimates, it should not come as much of a surprise "since the key drags are so well known," the analyst said.
The bigger picture remains the same, including expectations of "office leasing in San Francisco, the Silicon Valley, and Seattle recovering with more tenant traffic and leases being signed in the market," he further wrote.
Price Action: Shares of Kilroy Realty had declined by 0.03% to $34.55 at the time of publication on Wednesday.
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