Kilroy Realty: Excessive Pessimism Presents an Enticing Opportunity for Patient Investors

Kilroy Realty's shares have corrected by more than 60% since the onset of the pandemic even as the company's net operating income has increased by about 35% due to the completion of development properties and acquisitions. We recognize the uncertainty surrounding the future of office real estate. We also believe the environment will remain challenging for office owners in the near to medium term. That said, we think the selloff has been overdone and that the market is not recognizing the value of the company's nonoffice-related assets and its land bank.