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Analyst Blog

Kilroy Realty Corp. (KRC - Snapshot Report), a real estate investment trust (REIT), has recently declared a first quarter 2012 dividend of 35 cents per share or $1.40 on an annualized basis. The dividend is payable in cash on April 17, 2012 to shareholders of record as on March 30, 2012.

A steady dividend payout facilitates the long-term strategy of Kilroy Realty to provide attractive risk-adjusted returns to its stockholders. Investors looking for high dividend yields are increasingly favoring REITs. Solid dividend payouts are arguably the biggest enticement for REIT investors as the U.S. law requires REITs to distribute 90% of their annual taxable income in the form of dividends to shareholders.

Earlier during the month, Kilroy Realty had completed a secondary offering of about 9.5 million shares, including over 1.2 million shares sold to the underwriters to cover the over-allotment options, at $42.00 each. The company utilized the net proceeds from the equity offer, aggregating $382.1 million, to increase its liquidity and fund its operating expenses.

Kilroy Realty owns, develops and manages a diverse portfolio of office, industrial and multi-purpose real estate properties primarily in the coastal regions of Los Angeles, OrangeCounty, San Diego, greater Seattle and the San Francisco Bay Area. As of December 31, 2011, the company owned 11.4 million rentable square feet of commercial office space and 3.4 million rentable square feet of industrial space.

Kilroy Realty maintains an active multi-year development program focused on the economically dynamic locations characterized by strong long-term demand, limited supply, and high barriers to entry. As such, most of the properties of the company are concentrated in the coastal submarkets of Southern California that offer both a vibrant economic backdrop for businesses and a unique quality of life for their employees.

Currently, we have a Neutral recommendation and a Zacks #3 Rank on Kilroy Realty that translates into a short-term Hold rating. We also have a Neutral recommendation and a Zacks #2 Rank (short-term Buy) for MPG Office Trust, Inc. , a competitor of Kilroy Realty.

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