Duke Realty Corporation Reports Solid Operating Performance in Second Quarter 2010

Strategic Insights -

Duke Realty Corporation, a leading industrial and office property REIT, announced its second quarter 2010 results, showcasing solid operating performance and a strategic focus on repositioning its portfolio. The company's chairman and chief executive officer, Dennis D. Oklak, highlighted the acquisition of quality industrial assets as a significant step in the company's ongoing strategy. Additionally, Duke Realty demonstrated its ability to efficiently raise equity and debt during the quarter, reflecting investor confidence in its strategy and progress.

Key Takeaways:

  • The company reported a significant improvement in its liquidity position, with no outstanding borrowings on its $850 million unsecured line of credit and $256.3 million of cash on hand as of June 30, 2010.
  • Duke Realty acquired its joint venture partner's 50 percent interest in Dugan, a portfolio of 106 industrial buildings totaling 20.8 million square feet and 62.6 net acres of undeveloped land.
  • The company acquired a 250,000 square foot industrial building in Phoenix, AZ, which is 100 percent leased with a stabilized return of 8.8 percent.
  • Duke Realty also acquired two newly developed industrial properties and land in South Florida, totaling approximately 225,000 square feet and land that can support two additional buildings.
  • The company recognized a non-cash impairment charge of nearly $8 million on the sale of approximately 50 acres of industrial land in Chicago, IL.
  • Duke Realty declared a quarterly cash dividend on its common stock of $0.17 per share, or $0.68 per share on an annualized basis, and reaffirmed Core FFO guidance for 2010 of $0.95 to $1.15 per share.

Statistics:

  • Duke Realty owns and operates over 134 million rentable square feet of industrial and office space across 18 major U.S. cities.
  • As of June 30, 2010, the company had $256.3 million of cash on hand.
  • The Dugan portfolio was 86.6 percent leased as of June 30, 2010.
  • The company assumed $4.5 million of secured debt as part of the Phoenix, AZ acquisition.
  • Duke Realty recognized a non-cash impairment charge of nearly $8 million on the sale of approximately 50 acres of industrial land in Chicago, IL.

Sources:

  • Duke Realty Corporation (NYSE: DRE) - Second Quarter 2010 Earnings Release
  • Marketwire - "Duke Realty Corporation Reports Solid Operating Performance in Second Quarter 2010" (Jul 28, 2010)