Kilroy Realty Corporation Sees Strong End to 2024 with Record Leasing Activity and Significant Deals
Kilroy Realty Corporation (KRC) capped off a strong year with an even more impressive showing in its fourth quarter of 2024, as the company announced a record level of leasing activity and several significant deals that underscore its position as a leader in the office space market.
Angela Aman, CEO of KRC, reported on the strong end to 2024, which was driven by outperformance in financial results and a material acceleration in leasing activity. The company's team worked tirelessly throughout the year to prepare for the recovery that has taken hold in its markets, making critical senior hires, rethinking processes and systems, successfully completing several major development and repositioning projects, and taking steps to address its future development pipeline.
The highlight of the quarter was a multi-floor lease with Walmart at Skyline Tower in Bellevue, Washington, where KRC's regional team worked creatively to accommodate Walmart's significant requirement and accelerated time line. The company also executed a 274,000 square foot new lease in the San Francisco Bay area with a global technology company that is subtenant occupying its largest 2026 expiration.
These deals demonstrate both the proactivity of KRC's team as it relates to addressing its 2026 lease expirations and the increased willingness of tenants to engage and make long-term commitments related to their space needs. Given historically low levels of new supply, and increased workplace attendance requirements taking effect, KRC's markets are demonstrating important signs of sustained recovery, with trends expected to continue accelerating over the next several years.
One particular area of focus for KRC is the embedded upside inherent in its highest quality vacancies, specifically those concentrated and recently developed or repositioned assets. These properties set the standard for quality, functionality and market-leading amenitization, ideally positioning them within their respective markets. Vacant space at these assets alone represented 410 basis points of leased occupancy upside at year-end, highlighting an exceptional source of future growth for the company.
The second phase of Kilroy Oyster Point in South San Francisco will be a substantial growth driver for KRC in the coming years, although this is not yet reflected in its occupancy statistics. This project, along with other high-quality vacancies, positions KRC well to capture the growing momentum in the office space market.
KRC's CEO, Angela Aman, was inspired by the strength and resilience of her team as they work to support their Los Angeles tenants and each other during a challenging start to 2025. The company's recent experience with the devastation in Los Angeles has only strengthened its resolve to continue delivering high-quality spaces that meet evolving tenant needs.
Overall, KRC's performance in the fourth quarter of 2024 is a testament to its commitment to innovation and customer service, as well as its ability to navigate challenging market conditions. The company's future outlook remains bright, with opportunities to capture growing momentum in the office space market.
