Merged company will have total market capitalization of $15.6 billion in an all-stock transaction.
AvalonBay Chairman and CEO Timothy Naughton to serve as 2017 chair.
Analysts say concerns about interest rates put pressure on REITs in October.
Assets are being merged with select assets of The JBG Companies.
Dallas/Fort Worth in second place, according to PwC/ULI survey.
Declining vacancy rates and rising rents are expected to support prices, REIT returns.
Kilroy founded predecessor to West Coast REIT in 1952.
REIT returns continue to beat broader market in 2016.
Newly established net lease REIT wants to diversify restaurant portfolio.
Equity REITs no longer part of financials sector.