"In 2024, Kilroy generated $541.1 million in operating cash flow but spent $501.0 million on capital expenditures, leaving just $40.2 million in free cash flow. Against $256.3 million in dividend payments, the FCF payout ratio hits a troubling 638%. The company is not covering its dividend from cash generation. As a REIT, Kilroy must distribute at least 90% of taxable income, not free cash flow. The company reported net income of $211.0 million in 2024, giving an earnings payout ratio of roughly 121%."
"Kilroy Realty Corp ( NYSE:KRC) is a real estate investment trust focused on office and life science properties in high-barrier coastal markets including San Francisco, Los Angeles, Seattle, San Diego, and Austin. The portfolio is 81.0% occupied and 83.3% leased as of Q3 2025. With a dividend yield around 6.3%, income investors need to understand whether this payout is sustainable. I analyzed the cash flow, balance sheet, and management's track record to determine if this dividend can hold up."
Kilroy Realty Corp is a REIT focused on office and life science properties in high-barrier coastal markets including San Francisco, Los Angeles, Seattle, San Diego, and Austin. The portfolio was 81.0% occupied and 83.3% leased in Q3 2025. Quarterly dividends have been maintained at $0.54 for eight consecutive quarters and the company has a 27-year unbroken payment history. Operating cash flow in 2024 totaled $541.1 million while capital expenditures were $501.0 million, producing only $40.2 million of free cash flow. Dividend payments totaled $256.3 million, yielding a 638% FCF payout ratio and roughly 121% earnings payout. Debt-to-equity stood at 0.84x, cash balances fell sharply in 2024 before partially recovering by Q3 2025, and leasing activity included a large long-term UCSF Health lease signed in January 2026.
Read at 24/7 Wall St.
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