D
1 Capital Partners, a New York‑based hedge fund, added almost 6.6 million shares of Kilroy Realty Corp. (KRC) in Q3, boosting its stake to about 8.5 million shares and raising the holding’s value to roughly $358 million—an increase of $293 million from the prior quarter. The move lifted Kilroy to 4.1 % of D1’s disclosed U.S. equity portfolio as of September 30.
Kilroy’s shares traded at $40.78 on Friday, up only 1 % year‑to‑date, lagging the S&P 500’s 13 % gain. The REIT, valued at $4.9 billion, generated $1.1 billion in trailing‑12‑month revenue and $322 million in net income. Its 17 million‑square‑foot portfolio focuses on office and life‑science space in major West Coast markets, emphasizing sustainability and tenant quality.
Despite a sluggish office‑market recovery, Kilroy’s latest quarter showed solid leasing momentum, early rent starts, and higher GAAP rent spreads. Revenue fell to $279.7 million from $289.9 million a year earlier, but net income surged to $156 million from $52 million, reflecting improved cash flows. The REIT’s FFO guidance remains positive, suggesting a path toward stabilization, though occupancy pressures and West Coast risks persist.
D1’s investment aligns with a contrarian, long‑duration strategy, targeting undervalued assets with potential for compounding returns as cash flows strengthen. The fund’s top holdings now include CART ($829 million, 9.5 % of AUM), APP ($601 million, 6.9 %), CLH ($568 million, 6.5 %), RDDT ($466 million, 5.4 %), and FLS ($398 million, 4.6 %).
Key terms: 13F AUM (total U.S. equity value reported), net position (holding value after changes), stake (ownership level), dividend yield (annual dividends ÷ share price), REIT (income‑producing real estate company), TTM (trailing 12 months), portfolio (collection of investments), occupancy (leased space %), sustainable building operations (environmentally efficient practices).
