Kilroy Realty Corp. (NYSE:KRC) has projected a fiscal forecast for 2024 that falls below market expectations. Despite outperforming in Q4 2023, the office REIT is anticipating reduced spending on developments, leading to a dampened outlook for the full year. However, the company reported Q4 2023 results that surpassed previous apprehensions, aided by robust leasing activity.

Downbeat Fiscal Guidance

The company has set its 2024 FFO per share within the range of $4.10 to $4.25, with a midpoint at $4.18. This contrasts with the average analyst estimate of $4.32 (16 estimates).

Furthermore, it also anticipates a decline of 4.0%-6.0% in same-store cash net operating income for 2024, compared to the 4.4% increase in 2023. Kilroy Realty forecasts a decrease in average full-year occupancy to 82.5%-84.0%, down from the 87.3% occupancy in 2023. It also expects total development spending to be in the range of $72M-$80M, in contrast to the $93M spent last year.

Strong Q4 Performance

The company reported a Q4 FFO of $1.08, surpassing the consensus of $1.05. While this is a decline from $1.12 in the preceding quarter and $1.17 in the same period of the previous year, it exceeded analyst expectations.

During the Q4, Kilroy (KRC) executed leases for approximately 588K square feet, including both new and renewed contracts, marking the highest quarterly leasing volume since Q2 2019.

By the end of December 31, 2023, its stabilized portfolio maintained an 85.0% occupancy and 86.4% lease penetration.

A conference call is scheduled for February 6 at 10:00 a.m. ET.

Previous to this, Kilroy Realty (KRC) reported an FFO of $1.08, beating the estimates by $1.03, but its revenue of $269.02M missed expectations by $15.47M.