Exhibit 99.2

Contact: Richard E. Moran Jr. Executive Vice President and Chief Financial Officer (310) 481-8483 or Tyler H. Rose Senior Vice President and Treasurer (310) 481-8484 FOR RELEASE: October 25, 2004

KILROY REALTY CORPORATION REPORTS

THIRD QUARTER FINANCIAL RESULTS

LOS ANGELES, October 25, 2004 – Kilroy Realty Corporation (NYSE: KRC) today reported financial results for its third quarter ended September 30, 2004, with net income of $10.4 million, or $0.36 per share, compared to $20.0 million, or $0.72 per share, in the third quarter of 2003. Revenues from continuing operations totaled $55.0 million, compared to $68.8 million in the year-earlier period. Funds from operations (FFO) in the third quarter totaled $20.2 million, or $0.62 per share, compared to $37.5 million, or $1.17 per share, in the third quarter of 2003.

For the first nine months of 2004, KRC reported net income of $24.2 million, or $0.85 per share, compared to $44.3 million, or $1.61 per share, in the first nine months of 2003. Revenues from continuing operations in the nine-month period totaled $163.4 million, compared to $169.9 million in the same period of 2003. The company’s funds from operations in the first nine months of 2004 totaled $64.5 million, or $1.99 per share, compared to $88.7 million, or $2.79 per share, in the same period of 2003.

All per-share amounts in this report are presented on a diluted basis.

KRC’s financial results also included $0.8 million and $15.4 million in the third quarter of 2004 and 2003, respectively, and $0.8 million and $17.9 million for the first nine months of 2004 and 2003, respectively, as part of a $21.3 million settlement reached with Peregrine Systems, Inc. over claims arising from its bankruptcy filing in September 2002.

1

Excluding these payments, KRC’s 2004 third quarter funds from operations would have been $19.4 million and its 2003 third quarter funds from operations would have been $22.1 million. For the first nine months of 2004, its funds from operations would have been $63.8 million and for the first nine months of 2003, its funds from operations would have been $70.8 million.

“Led by solid results in our office properties, successful leasing efforts at KRC during the third quarter have increased occupancy in our stabilized portfolio to 93%,” said John B. Kilroy, Jr., the company’s president and CEO.

KRC maintains an active committed development and redevelopment program in the Southern California commercial real estate market that currently includes two buildings under construction totaling approximately 103,000 square feet and two buildings in lease-up totaling approximately 310,000 square feet. This committed pipeline represents a total estimated investment of approximately $107 million, of which $71 million has been spent to date.

Earnings guidance for 2004 will be discussed by KRC management during the company’s October 26, 2004, earnings conference call. The call will begin at 11:00 a.m. PDT and last approximately one hour. Those interested in listening via the Internet can access the conference call at www.kilroyrealty.com. Please go to the website 15 minutes before the call and register. It may be necessary to download audio software to hear the conference call. Those interested in listening via telephone can access the conference call at 800-915-4836. A replay of the conference call will be available via telephone through November 3, 2004, at 800-428-6051, reservation #363263, or via the internet at the company’s website.

Some of the information presented in this release is forward looking in nature within the meaning of the Private Securities Litigation Reform Act of 1995. Although Kilroy Realty Corporation believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, there can be no assurance that its expectations will be achieved. Certain factors that could cause actual results to differ materially from Kilroy Realty’s expectations are set forth as risk factors in the company’s Securities and Exchange Commission reports and filings. Included among these factors are changes in general economic conditions, including changes in the economic

2

conditions affecting industries in which its principal tenants compete; Kilroy Realty’s ability to timely lease or re-lease space at current or anticipated rents; changes in interest rates; changes in operating costs, including utility costs; fluctuations in the company’s share price and the resulting impact on general and administrative costs; future demand for its debt and equity securities; its ability to refinance its debt on reasonable terms at maturity; its ability to complete current and future development projects on schedule and on budget; the demand for office space in markets in which Kilroy Realty has a presence; and risks detailed from time to time in the company’s SEC reports, including quarterly reports on Form 10-Q, reports on Form 8-K and annual reports on Form 10-K. Many of these factors are beyond Kilroy Realty’s ability to control or predict. Forward-looking statements are not guarantees of performance. For forward-looking statements herein, Kilroy Realty claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. The company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.

Kilroy Realty Corporation, a member of the S&P Small Cap 600 Index, is a Southern California-based real estate investment trust active in the office and industrial property sectors. For more than 50 years, the company has owned, developed, acquired and managed real estate assets primarily in the coastal regions of California and Washington. KRC is currently active in office development and redevelopment in Los Angeles and San Diego counties. At September 30, 2004, the company owned 7.4 million square feet of commercial office space and 4.6 million square feet of industrial space. More information is available at www.kilroyrealty.com.

3

KILROY REALTY CORPORATION

SUMMARY QUARTERLY RESULTS

(unaudited, in thousands, except per share data)

		Three Months Ended September 30, 2004			Three Months Ended September 30, 2003			Nine Months Ended September 30, 2004				Nine Months Ended September 30, 2003
Revenues from continuing operations		$	55,045		$	68,783		$	163,372			$	169,852
Revenues including discontinued operations		$	55,412		$	70,062		$	165,758			$	175,519
Net income available to common stockholders (1)		$	10,357		$	20,039		$	24,194			$	44,325
Weighted average common shares outstanding - basic			28,271			27,584			28,203				27,387
Weighted average common shares outstanding - diluted			28,440			27,801			28,369				27,593
Net income per share of common stock - basic		$	0.37		$	0.73		$	0.86			$	1.62
Net income per share of common stock - diluted		$	0.36		$	0.72		$	0.85			$	1.61
Funds From Operations (2) (3)		$	20,185		$	37,473		$	64,524			$	88,684
Weighted average common shares/units outstanding - basic (4)			32,327			31,799			32,304				31,609
Weighted average common shares/units outstanding - diluted (4)			32,495			32,015			32,469				31,816
Funds From Operations per common share/unit - basic (4)		$	0.62		$	1.18		$	2.00			$	2.81
Funds From Operations per common share/unit - diluted (4)		$	0.62		$	1.17		$	1.99			$	2.79
Common shares outstanding at end of period									28,528				28,029
Common partnership units outstanding at end of period									3,990				4,214
Total common shares and units outstanding at end of period									32,518				32,243
								September 30, 2004				September 30, 2003
Stabilized portfolio occupancy rates:
Los Angeles									84.8	%			81.0	%
Orange County									96.6	%			94.5	%
San Diego									96.4	%			91.5	%
Other									93.7	%			95.9	%
Weighted average total									93.1	%			89.8	%
Total square feet of stabilized properties owned at end of period:
Office									7,393				7,318
Industrial									4,601				4,877
Total									11,994				12,195

⁽¹⁾ Net income after minority interests.

⁽²⁾ Reconciliation of Net Income to Funds From Operations and management statement on Funds From Operations is included after the Consolidated Statements of Operations.

⁽³⁾ Reported amounts are attributable to common shareholders and common unitholders.

⁽⁴⁾ Calculated based on weighted average shares outstanding assuming conversion of all common limited partnership units outstanding.

4

KILROY REALTY CORPORATION CONSOLIDATED BALANCE SHEETS

(unaudited, in thousands)

		September 30, 2004				December 31, 2003
ASSETS
REAL ESTATE ASSETS:
Land and improvements		$	288,861			$	289,730
Buildings and improvements, net			1,357,626				1,305,145
Undeveloped land and construction in progress, net			84,218				131,411
Total real estate held for investment			1,730,705				1,726,286
Accumulated depreciation and amortization			(353,025	)			(321,372	)
Total real estate assets, net			1,377,680				1,404,914
Cash and cash equivalents			3,652				9,892
Restricted cash			1,283				8,558
Current receivables, net			4,190				4,919
Deferred rent receivables, net			43,956				36,804
Deferred leasing costs, net			39,420				36,651
Deferred financing costs, net			3,190				3,657
Prepaid expenses and other assets			6,008				7,240
TOTAL ASSETS		$	1,479,379			$	1,512,635
LIABILITIES & STOCKHOLDERS’ EQUITY
LIABILITIES:
Secured debt		$	494,932			$	526,048
Unsecured senior notes			144,000
Unsecured line of credit			92,000				235,000
Accounts payable, accrued expenses and other liabilities			52,889				41,147
Accrued distributions			16,498				16,369
Rents received in advance, tenant security deposits and deferred revenue			19,974				20,904
Total liabilities			820,293				839,468
MINORITY INTERESTS:
7.450% Series A Cumulative Redeemable Preferred unitholders			73,638				73,716
9.250% Series D Cumulative Redeemable Preferred unitholders			44,321				44,321
Common unitholders of the Operating Partnership			61,782				66,502
Total minority interests			179,741				184,539
STOCKHOLDERS’ EQUITY:
7.800% Series E Cumulative Redeemable Preferred stock			38,425				38,437
Common stock			286				282
Additional paid-in capital			515,086				508,568
Deferred compensation			(1,929	)			(852	)
Distributions in excess of earnings			(71,456	)			(53,449	)
Accumulated net other comprehensive loss			(1,067	)			(4,358	)
Total stockholders’ equity			479,345				488,628
TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY		$	1,479,379			$	1,512,635

5

KILROY REALTY CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited, in thousands, except per share data)

		Three Months Ended September 30, 2004				Three Months Ended September 30, 2003				Nine Months Ended September 30, 2004				Nine Months Ended September 30, 2003
REVENUES:
Rental income		$	50,501			$	45,870			$	147,127			$	131,695
Tenant reimbursements			4,817				4,472				15,370				14,845
Other property income			(273	)			18,441				875				23,312
Total revenues			55,045				68,783				163,372				169,852
EXPENSES:
Property expenses			8,620				7,738				25,904				23,261
Real estate taxes			4,423				3,869				12,631				11,197
Provision for bad debts			(524	)			2,749				116				1,662
Ground leases			334				326				996				970
General and administrative expenses			9,399				5,089				22,342				13,231
Interest expense			9,540				8,869				27,898				24,143
Depreciation and amortization			14,832				14,299				43,317				40,685
Total expenses			46,624				42,939				133,204				115,149
OTHER INCOME:
Interest and other income			77				36				462				130
Total other income			77				36				462				130
Income from continuing operations before minority interests			8,498				25,880				30,630				54,833
Minority interests:
Distributions on Cumulative Redeemable Preferred units			(2,437	)			(3,375	)			(7,396	)			(10,125	)
Minority interest in earnings of Operating Partnership attributable to continuing operations			(564	)			(2,983	)			(2,642	)			(5,947	)
Total minority interests			(3,001	)			(6,358	)			(10,038	)			(16,072	)
Income from continuing operations			5,497				19,522				20,592				38,761
Discontinued operations:
Revenues from discontinued operations			367				1,279				2,386				5,667
Expenses from discontinued operations			(117	)			(638	)			(989	)			(2,891	)
Net gain (loss) on disposition of discontinued operations			6,212				(48	)			6,148				3,642
Impairment loss on property held for sale											(726	)
Minority interest in earnings of Operating Partnership attributable to discontinued operations			(817	)			(76	)			(862	)			(854	)
Total income from discontinued operations			5,645				517				5,957				5,564
Net income			11,142				20,039				26,549				44,325
Preferred dividends			(785	)							(2,355	)
Net income available for common shareholders		$	10,357			$	20,039			$	24,194			$	44,325
Weighted average shares outstanding - basic			28,271				27,584				28,203				27,387
Weighted average shares outstanding - diluted			28,440				27,801				28,369				27,593
Net Income per common share - basic		$	0.37			$	0.73			$	0.86			$	1.62
Net Income per common share - diluted		$	0.36			$	0.72			$	0.85			$	1.61

6

KILROY REALTY CORPORATION FUNDS FROM OPERATIONS

(unaudited, in thousands, except per share data)

		Three Months Ended September 30, 2004				Three Months Ended September 30, 2003			Nine Months Ended September 30, 2004				Nine Months Ended September 30, 2003
Net income available for common shareholders		$	10,357			$	20,039		$	24,194			$	44,325
Adjustments:
Minority interest in earnings of Operating Partnership			1,381				3,059			3,504				6,801
Depreciation and amortization			14,659				14,327			42,974				41,200
Net (gain) loss on dispositions of operating properties			(6,212	)			48			(6,148	)			(3,642	)
Funds From Operations (1) (2)		$	20,185			$	37,473		$	64,524			$	88,684
Weighted average common shares/units outstanding - basic			32,327				31,799			32,304				31,609
Weighted average common shares/units outstanding - diluted			32,495				32,015			32,469				31,816
Funds From Operations per common share/unit - basic		$	0.62			$	1.18		$	2.00			$	2.81
Funds From Operations per common share/unit - diluted		$	0.62			$	1.17		$	1.99			$	2.79

⁽¹⁾ Management believes that Funds From Operations (“FFO”) is a useful supplemental measure of the Company’s operating performance. The Company computes FFO in accordance with the White Paper on FFO approved by the Board of Governors of the National Association of Real Estate Investment Trusts (“NAREIT”). The White Paper defines FFO as net income or loss computed in accordance with generally accepted accounting principles (“GAAP”), excluding extraordinary items, as defined by GAAP, and gains and losses from sales of depreciable operating property, plus real estate related depreciation and amortization (excluding amortization of deferred financing costs and depreciation of non-real estate assets), and after adjustment for unconsolidated partnerships and joint ventures. Other real estate investment trusts (“REITs”) may use different methodologies for calculating FFO and, accordingly, the Company’s FFO may not be comparable to other REITs.

Because FFO excludes depreciation and amortization, gains and losses from property dispositions, and extraordinary items, it provides a performance measure that, when compared year over year, reflects the impact to operations from trends in occupancy rates, rental rates, operating costs, development activities, general and administrative expenses, and interest costs, providing perspective on operating performance not immediately apparent from net income. In addition, management believes that FFO provides useful information to the investment community about the Company's operating performance when compared to other REITs since FFO is generally recognized as the industry standard for reporting the operations of REITs.

However, FFO should not be viewed as an alternative measure of the Company’s operating performance since it does not reflect either depreciation and amortization costs or the level of capital expenditures and leasing costs necessary to maintain the operating performance of the Company's properties, which are significant economic costs that could materially impact the Company’s results of operations.

⁽²⁾ Reported amounts are attributable to common shareholders and common unitholders.

7