Kilroy Earnings: Shares Remain Compellingly Cheap in Spite of a Challenging Near-Term Outlook

No-moat-rated Kilroy Realty reported a decent set of numbers in the first quarter even as the demand for office real estate remains muted due to macroeconomic factors and a slower recovery in physical office utilization rates. The firm reported funds from operations, or FFO, of $1.22 per share in the first quarter, which was around 5% higher than the $1.16 per share FFO reported in the first quarter of the previous year. The short-term outlook for office real estate remains challenging but shares are compellingly cheap from a long-term perspective. The gloomy West Coast office headlines do not accurately reflect the fundamentals of Kilroy's high-quality portfolio.