Settlement Boosts Kilroy Realty Profit

Kilroy Realty Corp. reported that profit more than doubled during the third quarter as the Los Angeles developer and landlord banked the bulk of a previously announced $21.3-million settlement with former tenant Peregrine Systems Inc.

Kilroy said net income for the period ended Sept. 30 was $20 million, or 72 cents a share, compared with $7.9 million, or 28 cents, a year earlier. Without the settlement, profit would have slipped to $6.7 million for the quarter, a company spokesman said. Revenue from continuing operations totaled $70.1 million, up from $50 million a year earlier.

Kilroy’s funds from operations, a key measure of profitability for real estate investment trusts, totaled $37.5 million, or $1.17 a share, compared with $23.2 million, or 72 cents. The Peregrine settlement increased third-quarter funds from operations by $15.4 million, or 48 cents a share.

“They did relatively well considering the markets in Southern California” are still soft for landlords, said Los Angeles money manager Craig Silvers of Bricks & Mortar Capital, who holds shares in Kilroy. “It’s typical of what other REITs are doing.”

Shares of Kilroy rose 4 cents at $28.35 on the NYSE.

-- Roger Vincent