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Duke Realty improves third-quarter performance

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Duke Realty Corp. had its best leasing quarter in three years and boosted overall occupancy to nearly 90 percent, helping the company post a profit for the fiscal period ended Sept. 30.

The Indianapolis-based real estate investment trust on Wednesday reported a third-quarter profit of $57.4 million on revenue of $371.3 million, compared with a loss of $314.2 million on total revenue of $320 million in the same period last year.

Duke reported funds from operations, a key measure for REITS, of $170.7 million, or 50 cents per share, compared with $159.8 million, or a loss of $1.02 per share, a year ago.

Much of the gain—$57.5 million—was attributed to the company’s acquisition of its partner’s share of a joint venture that owns 106 industrial buildings in the Midwest and Southeast. Duke paid $298.2 million for the 50-percent stake in Dugan Realty LLC. Duke Realty Limited Partnership already owns the other half of the venture.

Including that deal, the company said it completed $442 million in acquisitions during the quarter and sold $42.6 million worth of “non-strategic assets.” Duke also repurchased $53.7 million of preferred stock.

"We continue to make meaningful progress on our strategic plan, including the repositioning of our portfolio through acquisitions and dispositions of non-strategic assets," Chairman and CEO Dennis D. Oklak said in a prepared statement.

The company’s overall portfolio occupancy rate rose in the third quarter from 87.9 percent to 88.9 percent, and its tenant retention rate was 78.5 percent. Duke also executed leases for more than 8.5 million square feet of space.

The company adjusted its FFO outlook for the year to $1.11 to $1.15 per share, up from its previous the range of 95 cents to $1.15 per share.

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  1. PJ - Mall operators like Simon, and most developers/ land owners, establish individual legal entities for each property to avoid having a problem location sink the ship, or simply structure the note to exclude anything but the property acting as collateral. Usually both. The big banks that lend are big boys that know the risks and aren't mad at Simon for forking over the deed and walking away.

  2. Do any of the East side residence think that Macy, JC Penny's and the other national tenants would have letft the mall if they were making money?? I have read several post about how Simon neglected the property but it sounds like the Eastsiders stopped shopping at the mall even when it was full with all of the national retailers that you want to come back to the mall. I used to work at the Dick's at Washington Square and I know for a fact it's the worst performing Dick's in the Indianapolis market. You better start shopping there before it closes also.

  3. How can any company that has the cash and other assets be allowed to simply foreclose and not pay the debt? Simon, pay the debt and sell the property yourself. Don't just stiff the bank with the loan and require them to find a buyer.

  4. If you only knew....

  5. The proposal is structured in such a way that a private company (who has competitors in the marketplace) has struck a deal to get "financing" through utility ratepayers via IPL. Competitors to BlueIndy are at disadvantage now. The story isn't "how green can we be" but how creative "financing" through captive ratepayers benefits a company whose proposal should sink or float in the competitive marketplace without customer funding. If it was a great idea there would be financing available. IBJ needs to be doing a story on the utility ratemaking piece of this (which is pretty complicated) but instead it suggests that folks are whining about paying for being green.

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