Research Update: Kilroy Realty Corp. Outlook Revised To Negative On Pressured Operating Performance; 'BBB' Ratings Affirmed

Secular office headwinds are impairing Kilroy Realty Corp.'s West Coast focused portfolio, and we expect weaker office fundamentals will continue to pressure operating performance over the next two years. S&P Global Ratings revised its outlook to negative from stable and affirmed all of its ratings on the company, including the 'BBB' issuer credit rating. The negative outlook reflects our view that sustained secular headwinds could pressure Kilroy's portfolio, as we anticipate lower retention levels will likely negatively impact occupancy and net operating income. We expect its S&P Global Ratings'-adjusted debt to EBITDA to deteriorate modestly to the mid-6x area over the next two years. We view Kilroy's lease expiration schedule as manageable, with expirations representing just 1.9% of annualized base

...- Secular office headwinds are impairing Kilroy Realty Corp.'s West Coast focused portfolio, and we expect weaker office fundamentals will continue to pressure operating performance over the next two years. - S&P Global Ratings revised its outlook to negative from stable and affirmed all of its ratings on the company, including the '###' issuer credit rating. - The negative outlook reflects our view that sustained secular headwinds could pressure Kilroy's portfolio, as we anticipate lower retention levels will likely negatively impact occupancy and net operating income. We expect its S&P Global Ratings'-adjusted debt to EBITDA to deteriorate modestly to the mid-6x area over the next two years....

Research Update