As interest rates continue to rise, analysts have downgraded Kilroy Realty Corp., fearing the company’s stock could be over-priced.

Kilroy has outperformed its peers in recent years. The company’s shares have soared due to a positive outlook for Southern California office properties and the firm’s large pipeline of development projects. The combination has made Kilroy a favorite on Wall Street, which has bid up its share price. Since 2001, Kilroy’s stock has quadrupled in value.

Now, however, analysts at Deutsche Bank Securities Inc. and A.G. Edwards & Sons believe the stock may have gone too high.

Last week Deutsche Bank Securities downgraded Kilroy, among other real estate investment trusts, to “hold” from “buy” over concerns the 10-year Treasury bill, which dictates interest rates, will rise above 5.5 percent. Rising interest rates restrict the amount buyers are able to borrow when purchasing properties, which in turn can depress real estate values.

“It now looks like the peak in interest rates is likely to be higher than our various strategists have thought and is likely to occur later in the year,” wrote Deutsche Bank analyst Lou Taylor in the April 10 report.

Late last month, A.G. Edwards & Sons also downgraded Kilroy to “hold” from “buy” because the company’s stock began trading at a 25 percent premium to its net asset value, or the total worth of the company’s real estate holdings.

“Kilroy shares have performed considerably well over the past several years and year-to-date,” wrote A.G. Edwards analyst David Aubuchon in a March 17 report.

Investors seem to be paying heed to Wall Street’s warnings. On Thursday, Kilroy shares ended trading at $69.25 down 10 percent from the time the A.G. Edwards report was released and down 7 percent since Deutsche Bank’s report was released.

Even so, Aubuchon believes Kilroy should be included in stock portfolios of real estate investment trusts, firms that are required to pay shareholder dividends based on revenues in exchange for federal tax breaks.

“We believe Kilroy remains a core REIT holding for aggressive total return investors,” Aubuchon wrote, “as the company continues to own one of the best REIT franchises in Southern California.”

Kilroy doesn’t comment on analyst recommendations, according to Tyler Rose, the company’s senior vice president and treasurer.

Separately, Duetsche Bank’s Taylor kept “buy” ratings on several L.A. County-based REITS that he feels still have upside potential.