We expect Kilroy Realty Corp. (KRC) will maintain stable leverage metrics despite pressured operating performance stemming from near-term cyclical risks amid a weaker economic outlook and longer-term secular headwinds from remote working. S&P Global Ratings affirmed all ratings on Kilroy, including our 'BBB' issuer and issue-level credit ratings. The stable outlook reflects S&P Global Ratings' expectation that Kilroy will maintain and manage credit metrics within its stated financial policies despite cyclical and secular headwinds that will likely pressure leasing activity and operating performance. At the onset of the pandemic, we assumed that the widespread adoption of remote work could reduce office demand as tenants reevaluate their space needs upon lease expiration. As expected, office utilization rates remain well below pre-pandemic
