Kilroy Realty (KRC) is a real estate investment trust (REIT) that develops, owns and operates class A office space and industrial buildings. The firm makes money by developing properties, leasing them to tenants and selling stabilized properties at a profit. KRC leases office space to tenants in the healthcare, legal and financial services industries, and its top ten tenants represent only 37% of the company's total rental revenue.^[1]

KRC operates 129 properties (86 office and 43 industrial buildings) all in Southern California, primarily in Los Angeles County, Orange County and San Diego County. These are high growth areas where high real estate costs form a barrier to entry for competitors. Demand for office buildings tends to follow the performance of the regional and U.S. economy. During boom times companies expand, hiring more workers and leasing a higher grade of office space. During economic downturns many companies try to save money by leasing less square footage. This is particularly troubling in the first quarter of 2008 when employment numbers are down and KRC has space up for re-lease.

(Read more at Wikinvest )