UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended SeptemberJune 30, 20192020
OR
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from              to             
Commission File Number: 1-9044(Duke (Duke Realty Corporation) 0-20625 (Duke Realty Limited Partnership)
dre-20200630_g1.jpg
DUKE REALTY CORPORATION
DUKE REALTY LIMITED PARTNERSHIP
(Exact Name of Registrant as Specified in Its Charter)
Indiana(Duke Realty Corporation)35-1740409 (Duke Realty Corporation)
Indiana(Duke Realty Limited Partnership)35-1898425 (Duke Realty Limited Partnership)
(State or Other Jurisdiction
of Incorporation or Organization)		(I.R.S. Employer
Identification Number)
8711 River Crossing Boulevard
Indianapolis,Indiana46240
        (Address of Principal Executive Offices)(Zip Code)
Registrant's Telephone Number, Including Area Code:
Indiana(317)(Duke Realty Corporation)35-1740409 (Duke Realty Corporation)
Indiana(Duke Realty Limited Partnership)35-1898425 (Duke Realty Limited Partnership)
(State or Other Jurisdiction
of Incorporation or Organization)
(I.R.S. Employer
Identification Number)
600 East 96th Street, Suite 100
Indianapolis,Indiana46240
        (Address of Principal Executive Offices)(Zip Code)
Registrant's Telephone Number, Including Area Code:808-6000
(317)808-6000
Securities registered pursuant to Section 12(b) of the Act:
Title of ClassTrading SymbolsName of Exchange on Which Registered
Duke Realty CorporationCommon Stock, $0.01 par valueDRENew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Duke Realty CorporationYes☒
 No   ☐
Duke Realty Limited Partnership
Yes ☒
 No   ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Duke Realty CorporationYes☒
 No   ☐
Duke Realty Limited Partnership
Yes ☒
 No   ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Duke Realty Corporation:
Large accelerated filer☒
Accelerated filer  ☐
Non-accelerated filer  ☐
Smaller reporting company  ☐
Emerging growth company ☐
Duke Realty Limited Partnership:
Large accelerated filer
☐

Accelerated filer  ☐
Non-accelerated filer  ☒
Smaller reporting company  ☐
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act):
Duke Realty CorporationYes☐
No  ☒
Duke Realty Limited Partnership
Yes  ☐
No  ☒
The number of shares of Duke Realty Corporation's common stock outstanding at October 30, 2019July 29, 2020 was 367,570,672.370,561,785.



EXPLANATORY NOTE
This report (the "Report") combines the quarterly reports on Form 10-Q for the period ended SeptemberJune 30, 20192020 of both Duke Realty Corporation and Duke Realty Limited Partnership. Unless stated otherwise or the context otherwise requires, references to "Duke Realty Corporation" or the "General Partner" mean Duke Realty Corporation and its consolidated subsidiaries, and references to the "Partnership" mean Duke Realty Limited Partnership and its consolidated subsidiaries. The terms the "Company," "we," "us" and "our" refer to the General Partner and the Partnership, collectively, and those entities owned or controlled by the General Partner and/or the Partnership.
Duke Realty Corporation is a self-administered and self-managed real estate investment trust ("REIT") and is the sole general partner of the Partnership, owning approximately 99.1% of the common partnership interests of the Partnership ("General Partner Units") as of SeptemberJune 30, 2019.2020. The remaining 0.9% of the common partnership interests ("Limited Partner Units" and, together with the General Partner Units, the "Common Units") are owned by limited partners. As the sole general partner of the Partnership, the General Partner has full, exclusive and complete responsibility and discretion in the day-to-day management and control of the Partnership.
The General Partner and the Partnership are operated as one enterprise. The management of the General Partner consists of the same members as the management of the Partnership. As the sole general partner with control of the Partnership, the General Partner consolidates the Partnership for financial reporting purposes, and the General Partner does not have any significant assets other than its investment in the Partnership. Therefore, the assets and liabilities of the General Partner and the Partnership are substantially the same.
We believe combining the quarterly reports on Form 10-Q of the General Partner and the Partnership into this single report results in the following benefits:
•enhances investors' understanding of the General Partner and the Partnership by enabling investors to view the business as a whole in the same manner as management views and operates the business;
•eliminates duplicative disclosure and provides a more streamlined and readable presentation of information since a substantial portion of the Company's disclosure applies to both the General Partner and the Partnership; and
•creates time and cost efficiencies through the preparation of one combined report instead of two separate reports.
 
We believe it is important to understand the few differences between the General Partner and the Partnership in the context of how we operate as an interrelated consolidated company. The General Partner's only material asset is its ownership of partnership interests in the Partnership. As a result, the General Partner does not conduct business itself, other than acting as the sole general partner of the Partnership and issuing public equity from time to time. The General Partner does not issue any indebtedness, but does guarantee some of the unsecured debt of the Partnership. The Partnership holds substantially all the assets of the business, directly or indirectly, and holds the ownership interests related to certain of the Company's investments. The Partnership conducts the operations of the business and has no publicly traded equity. Except for net proceeds from equity issuances by the General Partner, which are contributed to the Partnership in exchange for General Partner Units or Preferred Units, the Partnership generates the capital required by the business through its operations, its incurrence of indebtedness and the issuance of Limited Partner Units to third parties.
Noncontrolling interests, shareholders' equity and partners' capital are the main areas of difference between the consolidated financial statements of the General Partner and those of the Partnership. The noncontrolling interests in the Partnership's financial statements include the interests in consolidated investees not wholly owned by the Partnership. The noncontrolling interests in the General Partner's financial statements include the same noncontrolling interests at the Partnership level, as well as the common limited partnership interests in the Partnership, which are accounted for as partners' capital by the Partnership.
In order to highlight the differences between the General Partner and the Partnership, there are separate sections in this report, as applicable, that separately discuss the General Partner and the Partnership, including separate financial statements and separate Exhibit 31 and 32 certifications. In the sections that combine disclosure of the General Partner and the Partnership, this report refers to actions or holdings as being actions or holdings of the collective Company.




DUKE REALTY CORPORATION/DUKE REALTY LIMITED PARTNERSHIP
INDEX
Page
Duke Realty Corporation:
3
4
5
6
Duke Realty Limited Partnership:
7
8
9
10
Duke Realty Corporation and Duke Realty Limited Partnership:
11
2623
4846
5046
5248
5248
5249
5250
5250
5250
5250
2

PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
DUKE REALTY CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
(in thousands, except per share amounts)
September 30, 2019
 December 31,
2018		June 30,
2020		December 31,
2019
(Unaudited)   (Unaudited) 
ASSETS   ASSETS
Real estate investments:   Real estate investments:
Real estate assets$7,691,643
 $7,248,346
Real estate assets$8,293,907  $7,993,377  
Construction in progress469,218
 477,162
Construction in progress584,138  550,926  
Investments in and advances to unconsolidated joint ventures110,815
 110,795
Investments in and advances to unconsolidated joint ventures133,795  133,074  
Undeveloped land307,973
 360,816
Undeveloped land350,226  254,537  
8,579,649
 8,197,119
9,362,066  8,931,914  
Accumulated depreciation(1,427,180) (1,344,176)Accumulated depreciation(1,590,546) (1,480,461) 
Net real estate investments7,152,469
 6,852,943
Net real estate investments7,771,520  7,451,453  
   
Real estate investments and other assets held-for-sale23,739
 1,082
Real estate investments and other assets held-for-sale—  18,463  
   
Cash and cash equivalents121,233
 17,901
Cash and cash equivalents29,870  110,891  
Accounts receivable20,449
 14,254
Accounts receivable16,869  20,349  
Straight-line rent receivable123,689
 109,334
Straight-line rent receivable138,251  129,344  
Receivables on construction contracts, including retentions24,186
 41,215
Receivables on construction contracts, including retentions53,769  25,607  
Deferred leasing and other costs, net of accumulated amortization of $196,817 and $200,744315,579
 313,799
Deferred leasing and other costs, net of accumulated amortization of $211,458 and $203,857Deferred leasing and other costs, net of accumulated amortization of $211,458 and $203,857314,715  320,444  
Restricted cash held in escrow for like-kind exchange119,240
 —
Restricted cash held in escrow for like-kind exchange—  1,673  
Notes receivable from property sales127,550
 272,550
Notes receivable from property sales—  110,000  
Other escrow deposits and other assets234,820
 180,946
Other escrow deposits and other assets242,015  232,338  
$8,262,954
 $7,804,024
$8,567,009  $8,420,562  
LIABILITIES AND EQUITY   LIABILITIES AND EQUITY
Indebtedness:   Indebtedness:
Secured debt, net of deferred financing costs of $175 and $238$34,896
 $79,563
Unsecured debt, net of deferred financing costs of $17,314 and $26,0622,732,686
 2,548,938
Unsecured line of credit—
 30,000
Secured debt, net of deferred financing costs of $363 and $164Secured debt, net of deferred financing costs of $363 and $164$50,274  $34,023  
Unsecured debt, net of deferred financing costs of $33,828 and $19,258Unsecured debt, net of deferred financing costs of $33,828 and $19,2583,024,912  2,880,742  
2,767,582
 2,658,501
3,075,186  2,914,765  
   
Liabilities related to real estate investments held-for-sale2,515
 —
Liabilities related to real estate investments held-for-sale—  887  
   
Construction payables and amounts due subcontractors, including retentions70,310
 92,288
Construction payables and amounts due subcontractors, including retentions111,844  68,840  
Accrued real estate taxes85,684
 73,358
Accrued real estate taxes79,204  69,042  
Accrued interest28,680
 16,153
Accrued interest15,450  14,181  
Other liabilities242,744
 205,433
Other liabilities181,978  223,680  
Tenant security deposits and prepaid rents44,167
 45,048
Tenant security deposits and prepaid rents45,931  48,907  
Total liabilities3,241,682
 3,090,781
Total liabilities3,509,593  3,340,302  
Shareholders' equity:   Shareholders' equity:
Common shares ($0.01 par value); 600,000 shares authorized; 366,295 and 358,851 shares issued and outstanding, respectively3,663
 3,589
Common shares ($0.01 par value); 600,000 shares authorized; 370,366 and 367,950 shares issued and outstanding, respectivelyCommon shares ($0.01 par value); 600,000 shares authorized; 370,366 and 367,950 shares issued and outstanding, respectively3,704  3,680  
Additional paid-in capital5,472,510
 5,244,375
Additional paid-in capital5,607,897  5,525,463  
Accumulated other comprehensive loss(42,104) (4,676)Accumulated other comprehensive loss(33,346) (35,036) 
Distributions in excess of net income(476,136) (585,087)Distributions in excess of net income(590,435) (475,992) 
Total shareholders' equity4,957,933
 4,658,201
Total shareholders' equity4,987,820  5,018,115  
Noncontrolling interests63,339
 55,042
Noncontrolling interests69,596  62,145  
Total equity5,021,272
 4,713,243
Total equity5,057,416  5,080,260  
$8,262,954
 $7,804,024
$8,567,009  $8,420,562  
See accompanying Notes to Consolidated Financial Statements
3

DUKE REALTY CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations and Comprehensive Income
For the three and ninesix months ended SeptemberJune 30,
(in thousands, except per share amounts)
(Unaudited)
Three Months EndedSix Months Ended
 2020201920202019
Revenues:
Rental and related revenue$226,374  $213,107  $445,129  $423,072  
General contractor and service fee revenue12,137  23,919  19,751  78,883  
238,511  237,026  464,880  501,955  
Expenses:
Rental expenses17,557  17,597  36,400  38,265  
Real estate taxes36,763  32,375  73,490  64,817  
General contractor and other services expenses10,406  23,189  16,974  75,775  
Depreciation and amortization86,704  83,004  172,063  158,996  
151,430  156,165  298,927  337,853  
Other operating activities:
Equity in earnings of unconsolidated joint ventures2,396  4,143  4,935  8,858  
Gain on sale of properties—  30,592  8,937  30,429  
Gain on land sales6,070  1,950  6,205  2,700  
Other operating expenses(1,546) (1,518) (2,658) (3,641) 
Impairment charges—  —  (5,626) —  
Non-incremental costs related to successful leases(4,034) (3,447) (6,559) (5,603) 
General and administrative expenses(13,606) (13,420) (35,369) (35,403) 
(10,720) 18,300  (30,135) (2,660) 
Operating income76,361  99,161  135,818  161,442  
Other income (expenses):
Interest and other income, net216  2,534  1,611  5,292  
Interest expense(22,841) (23,510) (46,335) (45,642) 
Loss on debt extinguishment(14,972) —  (32,778) (13) 
Gain on involuntary conversion1,283  —  1,283  2,259  
Income from continuing operations before income taxes40,047  78,185  59,599  123,338  
Income tax benefit (expense)150  (6,616) 210  (7,001) 
Income from continuing operations40,197  71,569  59,809  116,337  
Discontinued operations:
Gain on sale of properties23  99  71  254  
Income from discontinued operations23  99  71  254  
Net income40,220  71,668  59,880  116,591  
Net income attributable to noncontrolling interests(400) (615) (604) (987) 
Net income attributable to common shareholders$39,820  $71,053  $59,276  $115,604  
Basic net income per common share:
Continuing operations attributable to common shareholders$0.11  $0.20  $0.16  $0.32  
Diluted net income per common share:
Continuing operations attributable to common shareholders$0.11  $0.20  $0.16  $0.32  
Weighted average number of common shares outstanding368,836  359,681  368,513  359,412  
Weighted average number of common shares and potential dilutive securities372,573  362,926  372,197  362,615  
Comprehensive income:
Net income$40,220  $71,668  $59,880  $116,591  
Other comprehensive income (loss):
Unrealized losses on interest rate swap contracts—  (14,699) —  (24,041) 
Amortization of interest rate swap contracts889  —  1,690  —  
Comprehensive income$41,109  $56,969  $61,570  $92,550  
 Three Months Ended Nine Months Ended
 2019 2018 2019 2018
Revenues:       
Rental and related revenue$215,374
 $196,912
 $638,446
 $582,461
General contractor and service fee revenue25,955
 34,986
 104,838
 94,552
 241,329
 231,898
 743,284
 677,013
Expenses:       
Rental expenses19,158
 17,268
 57,423
 53,558
Real estate taxes31,739
 31,515
 96,556
 93,857
General contractor and other services expenses23,640
 33,730
 99,415
 89,392
Depreciation and amortization83,924
 78,855
 242,920
 232,216
 158,461
 161,368
 496,314
 469,023
Other operating activities:       
Equity in earnings of unconsolidated joint ventures3,736
 5,552
 12,594
 15,521
Gain on sale of properties173,646
 (107) 204,075
 194,741
Gain on land sales3,869
 3,915
 6,569
 7,221
Other operating expenses(874) (1,104) (4,515) (3,902)
Non-incremental costs related to successful leases(1,123) —
 (6,726) —
General and administrative expenses(13,720) (8,959) (49,123) (43,441)
 165,534
 (703) 162,874
 170,140
Operating income248,402
 69,827
 409,844
 378,130
Other income (expenses):       
Interest and other income, net2,085
 4,129
 7,377
 13,319
Interest expense(22,604) (21,462) (68,246) (62,137)
Loss on debt extinguishment—
 (89) (13) (240)
Gain on involuntary conversion—
 —
 2,259
 —
Income from continuing operations before income taxes227,883
 52,405
 351,221
 329,072
Income tax benefit (expense)536
 897
 (6,465) (9,495)
Income from continuing operations228,419
 53,302
 344,756
 319,577
Discontinued operations:       
Income before gain on sales—
 85
 —
 108
Gain on sale of properties112
 136
 366
 3,157
Income from discontinued operations112
 221
 366
 3,265
Net income228,531
 53,523
 345,122
 322,842
Net income attributable to noncontrolling interests(1,965) (498) (2,952) (3,009)
Net income attributable to common shareholders$226,566
 $53,025
 $342,170
 $319,833
Basic net income per common share:       
Continuing operations attributable to common shareholders$0.62
 $0.15
 $0.95
 $0.88
Discontinued operations attributable to common shareholders—
 —
 —
 0.01
Total$0.62
 $0.15
 $0.95
 $0.89
Diluted net income per common share:       
Continuing operations attributable to common shareholders$0.62
 $0.15
 $0.94
 $0.88
Discontinued operations attributable to common shareholders—
 —
 —
 0.01
Total$0.62
 $0.15
 $0.94
 $0.89
Weighted average number of common shares outstanding362,416
 357,898
 360,424
 357,235
Weighted average number of common shares and potential dilutive securities367,271
 361,410
 365,343
 362,745
        
Comprehensive income:       
Net income$228,531
 $53,523
 $345,122
 $322,842
Other comprehensive loss:       
Unrealized losses on interest rate swap contracts(13,387) —
 (37,428) —
Comprehensive income$215,144
 $53,523
 $307,694
 $322,842
See accompanying Notes to Consolidated Financial Statements
4

DUKE REALTY CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
For the ninesix months ended SeptemberJune 30,
(in thousands)
(Unaudited)
Six Months Ended
2019 201820202019
Cash flows from operating activities:   Cash flows from operating activities:
Net income$345,122
 $322,842
Net income$59,880  $116,591  
Adjustments to reconcile net income to net cash provided by operating activities:   Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of buildings and tenant improvements202,261
 190,460
Depreciation of buildings and tenant improvements143,922  131,878  
Amortization of deferred leasing and other costs40,659
 41,756
Amortization of deferred leasing and other costs28,141  27,118  
Amortization of deferred financing costs4,606
 4,303
Amortization of deferred financing costs4,477  3,121  
Straight-line rental income and expense, net(15,627) (16,763)Straight-line rental income and expense, net(8,476) (10,466) 
Impairment chargesImpairment charges5,626  —  
Loss on debt extinguishment13
 240
Loss on debt extinguishment32,778  13  
Gain on involuntary conversion(2,259) —
Gain on involuntary conversion(1,283) (2,259) 
Gains on land and property sales(211,010) (205,119)
Gain on land and property salesGain on land and property sales(15,213) (33,383) 
Third-party construction contracts, net14,218
 (5,088)Third-party construction contracts, net(3,717) 15,645  
Other accrued revenues and expenses, net26,870
 43,627
Other accrued revenues and expenses, net11,460  10,021  
Equity in earnings in excess of operating distributions received from unconsolidated joint ventures(766) (4,609)
Operating distributions received in excess of (less than) equity in earnings from unconsolidated joint venturesOperating distributions received in excess of (less than) equity in earnings from unconsolidated joint ventures3,563  (487) 
Net cash provided by operating activities404,087
 371,649
Net cash provided by operating activities261,158  257,792  
Cash flows from investing activities:   Cash flows from investing activities:
Development of real estate investments(325,825) (459,513)Development of real estate investments(333,212) (205,315) 
Acquisition of real estate investments and related intangible assets(146,632) (208,914)
Acquisition of undeveloped land(223,547) (194,171)
Acquisition of buildings and related intangible assetsAcquisition of buildings and related intangible assets—  (108,201) 
Acquisition of land and other real estate assetsAcquisition of land and other real estate assets(95,859) (200,872) 
Second generation tenant improvements, leasing costs and building improvements(31,644) (34,311)Second generation tenant improvements, leasing costs and building improvements(17,062) (20,463) 
Other deferred leasing costs(28,551) (27,691)Other deferred leasing costs(17,306) (11,152) 
Other assets(9,104) (5,929)Other assets(10,289) (7,224) 
Proceeds from the repayments of notes receivable from property sales145,000
 149,913
Proceeds from the repayments of notes receivable from property sales110,000  130,000  
Proceeds from land and property sales, net379,774
 434,584
Proceeds from land and property sales, net34,509  97,526  
Capital distributions from unconsolidated joint ventures2,664
 19,176
Capital distributions from unconsolidated joint ventures13  —  
Capital contributions and advances to unconsolidated joint ventures(5,963) (2,728)Capital contributions and advances to unconsolidated joint ventures(4,833) (5,962) 
Net cash used for investing activities(243,828) (329,584)Net cash used for investing activities(334,039) (331,663) 
Cash flows from financing activities:   Cash flows from financing activities:
Proceeds from issuance of common shares, net222,672
 30,591
Proceeds from issuance of common shares, net76,678  42,128  
Proceeds from unsecured debt182,284
 450,000
Proceeds from unsecured debt663,123  —  
Payments on unsecured debt—
 (1,998)Payments on unsecured debt(546,972) —  
Proceeds from secured debt financingsProceeds from secured debt financings18,400  —  
Payments on secured indebtedness including principal amortization(44,652) (231,070)Payments on secured indebtedness including principal amortization(1,906) (43,502) 
Repayments on line of credit, net(30,000) —
Borrowings on line of credit, netBorrowings on line of credit, net—  222,000  
Distributions to common shareholders(232,323) (214,463)Distributions to common shareholders(173,131) (154,550) 
Distributions to noncontrolling interests, net(1,864) (1,746)Distributions to noncontrolling interests, net(1,566) (1,180) 
Tax payments on stock-based compensation awards(5,695) (8,389)Tax payments on stock-based compensation awards(4,051) (5,469) 
Change in book cash overdrafts(14,306) 22,669
Change in book cash overdrafts(14,444) 15,874  
Other financing activities(9,920) —
Other financing activities289  (9,920) 
Deferred financing costs(1,440) (8,485)Deferred financing costs(6,374) —  
Net cash provided by financing activities64,756
 37,109
Net cash provided by financing activities10,046  65,381  
Net increase in cash, cash equivalents and restricted cash225,015
 79,174
Net decrease in cash, cash equivalents and restricted cashNet decrease in cash, cash equivalents and restricted cash(62,835) (8,490) 
Cash, cash equivalents and restricted cash at beginning of period25,517
 193,627
Cash, cash equivalents and restricted cash at beginning of period121,431  25,517  
Cash, cash equivalents and restricted cash at end of period$250,532
 $272,801
Cash, cash equivalents and restricted cash at end of period$58,596  $17,027  
   
Non-cash activities:   Non-cash activities:
Liabilities and right-of-use assets - operating leases$38,826
 $—
Liabilities and right-of-use assets - operating leases$1,443  $37,810  
Carrying amount of pre-existing ownership interest in acquired property$—
 $5,034
Non-cash property contribution from noncontrolling interests$—
 $3,200
Conversion of Limited Partner Units to common shares$—
 $1,967
See accompanying Notes to Consolidated Financial Statements

5

DUKE REALTY CORPORATION AND SUBSIDIARIES
Consolidated Statements of Changes in Equity
For the three and ninesix months ended SeptemberJune 30, 20192020 and 20182019
(in thousands, except per share data)
(Unaudited)
Common Shareholders  
Common
Stock		Additional
Paid-in
Capital		Accumulated
Other
Comprehensive
Loss		Distributions
in Excess of
Net Income		Noncontrolling
Interests		Total
Balance at March 31, 2020Balance at March 31, 2020$3,684  $5,533,806  $(34,235) $(543,412) $67,219  $5,027,062  
Net incomeNet income—  —  —  39,820  400  40,220  
Other comprehensive incomeOther comprehensive income—  —  889  —  —  889  
Issuance of common sharesIssuance of common shares20  71,193  —  —  —  71,213  
Stock-based compensation plan activityStock-based compensation plan activity—  2,898  —  (274) 2,760  5,384  
Common Shareholders    
Common
Stock
 
Additional
Paid-in
Capital
 
Accumulated
Other
Comprehensive
Loss
 
Distributions
in Excess of
Net Income
 
Noncontrolling
Interests
 Total
Balance at June 30, 2019$3,606
 $5,290,382
 $(28,717) $(624,674) $61,524
 $4,702,121
Net income—
 —
 —
 226,566
 1,965
 228,531
Other comprehensive loss—
 —
 (13,387) —
 —
 (13,387)
Issuance of common shares55
 180,489
 —
 —
 —
 180,544
Stock-based compensation plan activity2
 1,639
 —
 (255) 534
 1,920
Distributions to common shareholders ($0.215 per share)—
 —
 —
 (77,773) —
 (77,773)
Distributions to common shareholders ($0.235 per share)Distributions to common shareholders ($0.235 per share)—  —  —  (86,569) —  (86,569) 
Distributions to noncontrolling interests—
 —
 —
 —
 (684) (684)Distributions to noncontrolling interests—  —  —  —  (783) (783) 
Balance at September 30, 2019$3,663
 $5,472,510
 $(42,104) $(476,136) $63,339
 $5,021,272
Balance at June 30, 2020Balance at June 30, 2020$3,704  $5,607,897  $(33,346) $(590,435) $69,596  $5,057,416  
Balance at December 31, 2019$3,680  $5,525,463  $(35,036) $(475,992) $62,145  $5,080,260  
Net income—  —  —  59,276  604  59,880  
Other comprehensive income—  —  1,690  —  —  1,690  
Issuance of common shares21  76,657  —  —  —  76,678  
Stock-based compensation plan activity3  5,777  —  (588) 8,413  13,605  
Distributions to common shareholders ($0.47 per share)—  —  —  (173,131) —  (173,131) 
Distributions to noncontrolling interests—  —  —  —  (1,566) (1,566) 
Balance at June 30, 2020$3,704  $5,607,897  $(33,346) $(590,435) $69,596  $5,057,416  
Common Shareholders  
Balance at December 31, 2018$3,589
 $5,244,375
 $(4,676) $(585,087) $55,042
 $4,713,243
Common
Stock		Additional
Paid-in
Capital		Accumulated
Other
Comprehensive
Loss		Distributions
in Excess of
Net Income		Noncontrolling
Interests		Total
Balance at March 31, 2019Balance at March 31, 2019$3,594  $5,250,157  $(14,018) $(618,123) $59,561  $4,681,171  
Net income—
 —
 —
 342,170
 2,952
 345,122
Net income—  —  —  71,053  615  71,668  
Other comprehensive loss—
 —
 (37,428) —
 —
 (37,428)Other comprehensive loss—  —  (14,699) —  —  (14,699) 
Issuance of common shares68
 222,604
 —
 —
 —
 222,672
Issuance of common shares12  37,624  —  —  —  37,636  
Contributions from noncontrolling interests—
 —
 —
 —
 312
 312
Stock-based compensation plan activity6
 5,531
 —
 (896) 7,209
 11,850
Stock-based compensation plan activity—  2,601  —  (291) 2,023  4,333  
Distributions to common shareholders ($0.645 per share)—
 —
 —
 (232,323) —
 (232,323)
Distributions to common shareholders ($0.215 per share)Distributions to common shareholders ($0.215 per share)—  —  —  (77,313) —  (77,313) 
Distributions to noncontrolling interests—
 —
 —
 —
 (2,176) (2,176)Distributions to noncontrolling interests—  —  —  —  (675) (675) 
Balance at September 30, 2019$3,663
 $5,472,510
 $(42,104) $(476,136) $63,339
 $5,021,272
Balance at June 30, 2019Balance at June 30, 2019$3,606  $5,290,382  $(28,717) $(624,674) $61,524  $4,702,121  

Balance at December 31, 2018$3,589  $5,244,375  $(4,676) $(585,087) $55,042  $4,713,243  
Net income—  —  —  115,604  987  116,591  
Other comprehensive loss—  —  (24,041) —  —  (24,041) 
Issuance of common shares13  42,115  —  —  —  42,128  
Stock-based compensation plan activity4  3,892  —  (641) 6,675  9,930  
Contributions from noncontrolling interests—  —  —  —  312  312  
Distributions to common shareholders ($0.43 per share)—  —  —  (154,550) —  (154,550) 
Distributions to noncontrolling interests—  —  —  —  (1,492) (1,492) 
Balance at June 30, 2019$3,606  $5,290,382  $(28,717) $(624,674) $61,524  $4,702,121  
 Common Shareholders    
 
Common
Stock
 
Additional
Paid-in
Capital
 
Distributions
in Excess of
Net Income
 
Noncontrolling
Interests
 Total
Balance at June 30, 2018$3,572
 $5,209,605
 $(552,685) $48,478
 $4,708,970
Net income—
 —
 53,025
 498
 53,523
Issuance of common shares10
 29,205
 —
 —
 29,215
Contributions from noncontrolling interests—
 —
 —
 3,475
 3,475
Stock-based compensation plan activity1
 1,656
 (301) 701
 2,057
Conversion of Limited Partner Units—
 29
 —
 (29) —
Distributions to common shareholders ($0.20 per share)—
 —
 (71,656) —
 (71,656)
Distributions to noncontrolling interests—
 —
 —
 (660) (660)
Balance at September 30, 2018$3,583
 $5,240,495
 $(571,617) $52,463
 $4,724,924
Balance at December 31, 2017$3,564
 $5,205,316
 $(676,036) $41,534
 $4,574,378
Net income—
 —
 319,833
 3,009
 322,842
Issuance of common shares11
 30,580
 —
 —
 30,591
Contributions from noncontrolling interests—
 —
 —
 3,475
 3,475
Stock-based compensation plan activity7
 2,633
 (951) 8,433
 10,122
Conversion of Limited Partner Units1
 1,966
 —
 (1,967) —
Distributions to common shareholders ($0.60 per share)—
 —
 (214,463) —
 (214,463)
Distributions to noncontrolling interests—
 —
 —
 (2,021) (2,021)
Balance at September 30, 2018$3,583
 $5,240,495
 $(571,617) $52,463
 $4,724,924

See accompanying Notes to Consolidated Financial Statements
6

DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES
Consolidated Balance Sheets
(in thousands)

September 30,
2019		 December 31, 2018June 30,
2020		December 31,
2019
(Unaudited)  (Unaudited)
ASSETS   ASSETS
Real estate investments:   Real estate investments:
Real estate assets$7,691,643
 $7,248,346
Real estate assets$8,293,907  $7,993,377  
Construction in progress469,218
 477,162
 Construction in progress584,138  550,926  
Investments in and advances to unconsolidated joint ventures110,815
 110,795
 Investments in and advances to unconsolidated joint ventures133,795  133,074  
Undeveloped land307,973
 360,816
 Undeveloped land350,226  254,537  
8,579,649
 8,197,119
9,362,066  8,931,914  
Accumulated depreciation(1,427,180) (1,344,176)Accumulated depreciation(1,590,546) (1,480,461) 
Net real estate investments7,152,469
 6,852,943
 Net real estate investments7,771,520  7,451,453  
   
Real estate investments and other assets held-for-sale23,739
 1,082
Real estate investments and other assets held-for-sale—  18,463  
   
Cash and cash equivalents121,233
 17,901
Cash and cash equivalents29,870  110,891  
Accounts receivable20,449
 14,254
Accounts receivable16,869  20,349  
Straight-line rent receivable123,689
 109,334
Straight-line rent receivable138,251  129,344  
Receivables on construction contracts, including retentions24,186
 41,215
Receivables on construction contracts, including retentions53,769  25,607  
Deferred leasing and other costs, net of accumulated amortization of $196,817 and $200,744315,579
 313,799
Deferred leasing and other costs, net of accumulated amortization of $211,458 and $203,857Deferred leasing and other costs, net of accumulated amortization of $211,458 and $203,857314,715  320,444  
Restricted cash held in escrow for like-kind exchange119,240
 —
Restricted cash held in escrow for like-kind exchange—  1,673  
Notes receivable from property sales127,550
 272,550
Notes receivable from property sales—  110,000  
Other escrow deposits and other assets234,820
 180,946
Other escrow deposits and other assets242,015  232,338  
$8,262,954
 $7,804,024
$8,567,009  $8,420,562  
LIABILITIES AND EQUITY   LIABILITIES AND EQUITY
Indebtedness:   Indebtedness:
Secured debt, net of deferred financing costs of $175 and $238$34,896
 $79,563
Unsecured debt, net of deferred financing costs of $17,314 and $26,0622,732,686
 2,548,938
Unsecured line of credit—
 30,000
Secured debt, net of deferred financing costs of $363 and $164Secured debt, net of deferred financing costs of $363 and $164$50,274  $34,023  
Unsecured debt, net of deferred financing costs of $33,828 and $19,258Unsecured debt, net of deferred financing costs of $33,828 and $19,2583,024,912  2,880,742  
2,767,582
 2,658,501
3,075,186  2,914,765  
   
Liabilities related to real estate investments held-for-sale2,515
 —
Liabilities related to real estate investments held-for-sale—  887  
   
Construction payables and amounts due subcontractors, including retentions70,310
 92,288
Construction payables and amounts due subcontractors, including retentions111,844  68,840  
Accrued real estate taxes85,684
 73,358
Accrued real estate taxes79,204  69,042  
Accrued interest28,680
 16,153
Accrued interest15,450  14,181  
Other liabilities242,744
 205,433
Other liabilities181,978  223,680  
Tenant security deposits and prepaid rents44,167
 45,048
Tenant security deposits and prepaid rents45,931  48,907  
Total liabilities3,241,682
 3,090,781
 Total liabilities3,509,593  3,340,302  
Partners' equity:   Partners' equity:
Common equity (366,295 and 358,851 General Partner Units issued and outstanding, respectively)5,000,037
 4,662,877
Limited Partners' common equity (3,141 and 2,920 Limited Partner Units issued and outstanding, respectively)58,736
 50,585
Common equity (370,366 and 367,950 General Partner Units issued and outstanding, respectively)Common equity (370,366 and 367,950 General Partner Units issued and outstanding, respectively)5,021,166  5,053,151  
Limited Partners' common equity (3,330 and 3,029 Limited Partner Units issued and outstanding, respectively)Limited Partners' common equity (3,330 and 3,029 Limited Partner Units issued and outstanding, respectively)64,948  57,575  
Accumulated other comprehensive loss(42,104) (4,676)Accumulated other comprehensive loss(33,346) (35,036) 
Total partners' equity5,016,669
 4,708,786
 Total partners' equity5,052,768  5,075,690  
Noncontrolling interests4,603
 4,457
Noncontrolling interests4,648  4,570  
Total equity5,021,272
 4,713,243
 Total equity5,057,416  5,080,260  
$8,262,954
 $7,804,024
$8,567,009  $8,420,562  
See accompanying Notes to Consolidated Financial Statements
7

DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES
Consolidated Statements of Operations and Comprehensive Income
For the three and ninesix months ended SeptemberJune 30,
(in thousands, except per unit amounts)
(Unaudited)
 Three Months Ended Nine Months Ended
 2019 2018 2019 2018
Revenues:       
Rental and related revenue$215,374
 $196,912
 $638,446
 $582,461
General contractor and service fee revenue25,955
 34,986
 104,838
 94,552
 241,329
 231,898
 743,284
 677,013
Expenses:       
Rental expenses19,158
 17,268
 57,423
 53,558
Real estate taxes31,739
 31,515
 96,556
 93,857
General contractor and other services expenses23,640
 33,730
 99,415
 89,392
Depreciation and amortization83,924
 78,855
 242,920
 232,216
 158,461
 161,368
 496,314
 469,023
Other operating activities:       
Equity in earnings of unconsolidated joint ventures3,736
 5,552
 12,594
 15,521
Gain on sale of properties173,646
 (107) 204,075
 194,741
Gain on land sales3,869
 3,915
 6,569
 7,221
Other operating expenses(874) (1,104) (4,515) (3,902)
Non-incremental costs related to successful leases(1,123) —
 (6,726) —
General and administrative expenses(13,720) (8,959) (49,123) (43,441)
 165,534
 (703) 162,874
 170,140
Operating income248,402
 69,827
 409,844
 378,130
Other income (expenses):       
Interest and other income, net2,085
 4,129
 7,377
 13,319
Interest expense(22,604) (21,462) (68,246) (62,137)
Loss on debt extinguishment—
 (89) (13) (240)
Gain on involuntary conversion—
 —
 2,259
 —
Income from continuing operations before income taxes227,883
 52,405
 351,221
 329,072
Income tax benefit (expense)536
 897
 (6,465) (9,495)
Income from continuing operations228,419
 53,302
 344,756
 319,577
Discontinued operations:       
Income before gain on sales—
 85
 —
 108
Gain on sale of properties112
 136
 366
 3,157
           Income from discontinued operations112
 221
 366
 3,265
Net income228,531
 53,523
 345,122
 322,842
Net loss (income) attributable to noncontrolling interests3
 (3) 19
 (7)
Net income attributable to common unitholders$228,534
 $53,520
 $345,141
 $322,835
Basic net income per Common Unit:       
Continuing operations attributable to common unitholders$0.62
 $0.15
 $0.95
 $0.88
Discontinued operations attributable to common unitholders—
 —
 —
 0.01
Total$0.62
 $0.15
 $0.95
 $0.89
Diluted net income per Common Unit:       
Continuing operations attributable to common unitholders$0.62
 $0.15
 $0.94
 $0.88
Discontinued operations attributable to common unitholders—
 —
 —
 0.01
Total$0.62
 $0.15
 $0.94
 $0.89
Weighted average number of Common Units outstanding365,558
 361,200
 363,542
 360,585
Weighted average number of Common Units and potential dilutive securities367,271
 361,410
 365,343
 362,745
Comprehensive income:       
Net income$228,531
 $53,523
 $345,122
 $322,842
Other comprehensive loss:       
Unrealized losses on interest rate swap contracts(13,387) —
 (37,428) —
Comprehensive income$215,144
 $53,523
 $307,694
 $322,842
Three Months EndedSix Months Ended
 2020201920202019
Revenues:
Rental and related revenue$226,374  $213,107  $445,129  $423,072  
General contractor and service fee revenue12,137  23,919  19,751  78,883  
238,511  237,026  464,880  501,955  
Expenses:
Rental expenses17,557  17,597  36,400  38,265  
Real estate taxes36,763  32,375  73,490  64,817  
General contractor and other services expenses10,406  23,189  16,974  75,775  
Depreciation and amortization86,704  83,004  172,063  158,996  
151,430  156,165  298,927  337,853  
Other operating activities:
Equity in earnings of unconsolidated joint ventures2,396  4,143  4,935  8,858  
Gain on sale of properties—  30,592  8,937  30,429  
Gain on land sales6,070  1,950  6,205  2,700  
Other operating expenses(1,546) (1,518) (2,658) (3,641) 
Impairment charges—  —  (5,626) —  
Non-incremental costs related to successful leases(4,034) (3,447) (6,559) (5,603) 
General and administrative expenses(13,606) (13,420) (35,369) (35,403) 
(10,720) 18,300  (30,135) (2,660) 
Operating income76,361  99,161  135,818  161,442  
Other income (expenses):
Interest and other income, net216  2,534  1,611  5,292  
Interest expense(22,841) (23,510) (46,335) (45,642) 
Loss on debt extinguishment(14,972) —  (32,778) (13) 
Gain on involuntary conversion1,283  —  1,283  2,259  
Income from continuing operations before income taxes40,047  78,185  59,599  123,338  
Income tax benefit (expense)150  (6,616) 210  (7,001) 
Income from continuing operations40,197  71,569  59,809  116,337  
Discontinued operations:
Gain on sale of properties23  99  71  254  
           Income from discontinued operations23  99  71  254  
Net income40,220  71,668  59,880  116,591  
Net (income) loss attributable to noncontrolling interests(44) 6  (78) 16  
Net income attributable to common unitholders$40,176  $71,674  $59,802  $116,607  
Basic net income per Common Unit:
Continuing operations attributable to common unitholders$0.11  $0.20  $0.16  $0.32  
Diluted net income per Common Unit:
Continuing operations attributable to common unitholders$0.11  $0.20  $0.16  $0.32  
Weighted average number of Common Units outstanding372,167  362,826  371,790  362,517  
Weighted average number of Common Units and potential dilutive securities372,573  362,926  372,197  362,615  
Comprehensive income:
Net income$40,220  $71,668  $59,880  $116,591  
Other comprehensive income (loss):
Unrealized losses on interest rate swap contracts—  (14,699) —  (24,041) 
Amortization of interest rate swap contracts889  —  1,690  —  
Comprehensive income$41,109  $56,969  $61,570  $92,550  

See accompanying Notes to Consolidated Financial Statements
8

DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES
Consolidated Statements of Cash Flows
For the ninesix months ended SeptemberJune 30,
(in thousands)
(Unaudited)
Six Months Ended
20202019
Cash flows from operating activities:
Net income$59,880  $116,591  
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of buildings and tenant improvements143,922  131,878  
Amortization of deferred leasing and other costs28,141  27,118  
Amortization of deferred financing costs4,477  3,121  
Straight-line rental income and expense, net(8,476) (10,466) 
Impairment charges5,626  —  
Loss on debt extinguishment32,778  13  
Gain on involuntary conversion(1,283) (2,259) 
Gain on land and property sales(15,213) (33,383) 
Third-party construction contracts, net(3,717) 15,645  
Other accrued revenues and expenses, net11,460  10,021  
Operating distributions received in excess of (less than) equity in earnings from unconsolidated joint ventures3,563  (487) 
Net cash provided by operating activities261,158  257,792  
Cash flows from investing activities:
Development of real estate investments(333,212) (205,315) 
Acquisition of buildings and related intangible assets—  (108,201) 
Acquisition of land and other real estate assets(95,859) (200,872) 
Second generation tenant improvements, leasing costs and building improvements(17,062) (20,463) 
Other deferred leasing costs(17,306) (11,152) 
Other assets(10,289) (7,224) 
Proceeds from the repayments of notes receivable from property sales110,000  130,000  
Proceeds from land and property sales, net34,509  97,526  
Capital distributions from unconsolidated joint ventures13  —  
Capital contributions and advances to unconsolidated joint ventures(4,833) (5,962) 
Net cash used for investing activities(334,039) (331,663) 
Cash flows from financing activities:
Proceeds from the General Partner76,678  42,128  
Proceeds from unsecured debt663,123  —  
Payments on unsecured debt(546,972) —  
Proceeds from secured debt financings18,400  —  
Payments on secured indebtedness including principal amortization(1,906) (43,502) 
Borrowings on line of credit, net—  222,000  
Distributions to common unitholders(174,697) (155,903) 
Contributions from noncontrolling interests, net—  173  
Tax payments on stock-based compensation awards(4,051) (5,469) 
Change in book cash overdrafts(14,444) 15,874  
Other financing activities289  (9,920) 
Deferred financing costs(6,374) —  
Net cash provided by financing activities10,046  65,381  
Net decrease in cash, cash equivalents and restricted cash(62,835) (8,490) 
Cash, cash equivalents and restricted cash at beginning of period121,431  25,517  
Cash, cash equivalents and restricted cash at end of period$58,596  $17,027  
Non-cash activities:
Liabilities and right-of-use assets - operating leases$1,443  $37,810  
 2019 2018
Cash flows from operating activities:   
Net income$345,122
 $322,842
Adjustments to reconcile net income to net cash provided by operating activities:   
Depreciation of buildings and tenant improvements202,261
 190,460
Amortization of deferred leasing and other costs40,659
 41,756
Amortization of deferred financing costs4,606
 4,303
Straight-line rental income and expense, net(15,627) (16,763)
Loss on debt extinguishment13
 240
Gain on involuntary conversion(2,259) —
Gains on land and property sales(211,010) (205,119)
Third-party construction contracts, net14,218
 (5,088)
Other accrued revenues and expenses, net26,870
 43,627
Equity in earnings in excess of operating distributions received from unconsolidated joint ventures(766) (4,609)
Net cash provided by operating activities404,087
 371,649
Cash flows from investing activities:   
Development of real estate investments(325,825) (459,513)
Acquisition of real estate investments and related intangible assets(146,632) (208,914)
Acquisition of undeveloped land(223,547) (194,171)
Second generation tenant improvements, leasing costs and building improvements(31,644) (34,311)
Other deferred leasing costs(28,551) (27,691)
Other assets(9,104) (5,929)
        Proceeds from the repayments of notes receivable from property sales145,000
 149,913
Proceeds from land and property sales, net379,774
 434,584
Capital distributions from unconsolidated joint ventures2,664
 19,176
Capital contributions and advances to unconsolidated joint ventures(5,963) (2,728)
Net cash used for investing activities(243,828) (329,584)
Cash flows from financing activities:   
Contributions from the General Partner222,672
 30,591
Proceeds from unsecured debt182,284
 450,000
Payments on unsecured debt—
 (1,998)
Payments on secured indebtedness including principal amortization(44,652) (231,070)
Repayments on line of credit, net(30,000) —
Distributions to common unitholders(234,352) (216,484)
Contributions from noncontrolling interests, net165
 275
Tax payments on stock-based compensation awards(5,695) (8,389)
Change in book cash overdrafts(14,306) 22,669
Other financing activities(9,920) —
Deferred financing costs(1,440) (8,485)
Net cash provided by financing activities64,756
 37,109
Net increase in cash, cash equivalents and restricted cash225,015
 79,174
Cash, cash equivalents and restricted cash at beginning of period25,517
 193,627
Cash, cash equivalents and restricted cash at end of period$250,532
 $272,801
    
Non-cash activities:   
Liabilities and right-of-use assets - operating leases$38,826
 $—
Carrying amount of pre-existing ownership interest in acquired property$—
 $5,034
Non-cash property contribution from noncontrolling interests$—
 $3,200
Conversion of Limited Partner Units to common shares of the General Partner$—
 $1,967
See accompanying Notes to Consolidated Financial Statements
9

DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES
Consolidated Statements of Changes in Equity
For the three and ninesix months ended SeptemberJune 30, 20192020 and 20182019
(in thousands, except per unit data)
(Unaudited)

Common Unitholders
GeneralLimitedAccumulated
  Partner'sPartners'OtherTotal  
 Common EquityCommon EquityComprehensive
Loss		Partners' EquityNoncontrolling
Interests		Total Equity
Balance at March 31, 2020$4,994,078  $62,615  $(34,235) $5,022,458  $4,604  5,027,062  
Net income39,820  356  —  40,176  44  40,220  
Other comprehensive income—  —  889  889  —  889  
Capital contribution from the General Partner71,213  —  —  71,213  —  71,213  
Stock-based compensation plan activity2,624  2,760  —  5,384  —  5,384  
Distributions to common unitholders ($0.235 per Common Unit)(86,569) (783) —  (87,352) —  (87,352) 
Balance at June 30, 2020$5,021,166  $64,948  $(33,346) $5,052,768  $4,648  $5,057,416  
Balance at December 31, 2019$5,053,151  $57,575  $(35,036) $5,075,690  $4,570  5,080,260  
Net income59,276  526  —  59,802  78  59,880  
Other comprehensive income—  —  1,690  1,690  —  1,690  
Capital contribution from the General Partner76,678  —  —  76,678  —  76,678  
Stock-based compensation plan activity5,192  8,413  —  13,605  —  13,605  
Distributions to common unitholders ($0.47 per Common Unit)(173,131) (1,566) —  (174,697) —  (174,697) 
Balance at June 30, 2020$5,021,166  $64,948  $(33,346) $5,052,768  $4,648  $5,057,416  
Common Unitholders
Common Unitholders    GeneralLimitedAccumulated
General Limited Accumulated        Partner'sPartners'OtherTotal  
 Partner's Partners' Other Total     Common EquityCommon EquityComprehensive
Loss		Partners' EquityNoncontrolling
Interests		Total Equity
Common Equity Common Equity 
Comprehensive
Loss
 Partners' Equity 
Noncontrolling
Interests
 Total Equity
Balance at June 30, 2019$4,669,314
 $56,910
 $(28,717) $4,697,507
 $4,614
 $4,702,121
Balance at March 31, 2019Balance at March 31, 2019$4,635,628  $54,941  $(14,018) $4,676,551  $4,620  $4,681,171  
Net income226,566
 1,968
 —
 228,534
 (3) 228,531
Net income71,053  621  —  71,674  (6) 71,668  
Other comprehensive loss—
 —
 (13,387) (13,387) —
 (13,387)Other comprehensive loss—  —  (14,699) (14,699) —  (14,699) 
Capital contribution from the General Partner180,544
 —
 —
 180,544
 —
 180,544
Capital contribution from the General Partner37,636  —  —  37,636  —  37,636  
Stock-based compensation plan activity1,386
 534
 —
 1,920
 —
 1,920
Stock-based compensation plan activity2,310  2,023  —  4,333  —  4,333  
Distributions to common unitholders ($0.215 per Common Unit)(77,773) (676) —
 (78,449) —
 (78,449)Distributions to common unitholders ($0.215 per Common Unit)(77,313) (675) —  (77,988) —  (77,988) 
Distributions to noncontrolling interests—
 —
 —
 —
 (8) (8)
Balance at September 30, 2019$5,000,037
 $58,736
 $(42,104) $5,016,669
 $4,603
 $5,021,272
Balance at June 30, 2019Balance at June 30, 2019$4,669,314  $56,910  $(28,717) $4,697,507  $4,614  $4,702,121  
Balance at December 31, 2018$4,662,877  $50,585  $(4,676) $4,708,786  $4,457  $4,713,243  
Net income115,604  1,003  —  116,607  (16) 116,591  
Other comprehensive loss—  —  (24,041) (24,041) —  (24,041) 
Capital contribution from the General Partner42,128  —  42,128  —  42,128  
Stock-based compensation plan activity3,255  6,675  —  9,930  —  9,930  
Contributions from noncontrolling interests—  —  —  —  312  312  
Distributions to common unitholders ($0.43 per Common Unit)(154,550) (1,353) —  (155,903) —  (155,903) 
Distributions to noncontrolling interests—  —  —  —  (139) (139) 
Balance at June 30, 2019$4,669,314  $56,910  $(28,717) $4,697,507  $4,614  $4,702,121  
Balance at December 31, 2018$4,662,877
 $50,585
 $(4,676) $4,708,786
 $4,457
 $4,713,243
Net income342,170
 2,971
 —
 345,141
 (19) 345,122
Other comprehensive loss—
 —
 (37,428) (37,428) —
 (37,428)
Capital contribution from the General Partner222,672
 —
 —
 222,672
 —
 222,672
Stock-based compensation plan activity4,641
 7,209
 —
 11,850
 —
 11,850
Contributions from noncontrolling interests—
 —
 —
 —
 312
 312
Distributions to common unitholders ($0.645 per Common Unit)(232,323) (2,029) —
 (234,352) —
 (234,352)
Distributions to noncontrolling interests—
 —
 —
 —
 (147) (147)
Balance at September 30, 2019$5,000,037
 $58,736
 $(42,104) $5,016,669
 $4,603
 $5,021,272



 Common Unitholders    
 General Limited      
  Partner's Partners' Total    
 Common Equity Common Equity Partners' Equity 
Noncontrolling
Interests
 Total Equity
Balance at June 30, 2018$4,660,492
 $47,503
 $4,707,995
 $975
 $4,708,970
Net income53,025
 495
 53,520
 3
 53,523
Capital contribution from the General Partner29,215
 —
 29,215
 —
 29,215
Stock-based compensation plan activity1,356
 701
 2,057
 —
 2,057
Contributions from noncontrolling interests—
 —
 —
 3,475
 3,475
Conversion of Limited Partner Units29
 (29) —
 —
 —
Distributions to common unitholders ($0.20 per Common Unit)(71,656) (660) (72,316) —
 (72,316)
Balance at September 30, 2018$4,672,461
 $48,010
 $4,720,471
 $4,453
 $4,724,924
Balance at December 31, 2017$4,532,844
 $40,563
 $4,573,407
 $971
 $4,574,378
Net income319,833
 3,002
 322,835
 7
 322,842
Capital contribution from the General Partner30,591
 —
 30,591
 —
 30,591
Stock-based compensation plan activity1,689
 8,433
 10,122
 —
 10,122
Contributions from noncontrolling interests—
 —
 —
 3,475
 3,475
Conversion of Limited Partner Units1,967
 (1,967) —
 —
 —
Distributions to common unitholders ($0.60 per Common Unit)(214,463) (2,021) (216,484) —
 (216,484)
Balance at September 30, 2018$4,672,461
 $48,010
 $4,720,471
 $4,453
 $4,724,924



See accompanying Notes to Consolidated Financial Statements
10

DUKE REALTY CORPORATION AND DUKE REALTY LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 
1. General Basis of Presentation
The interim consolidated financial statements included herein have been prepared by the General Partner and the Partnership. The 20182019 year-end consolidated balance sheet data included in this Report was derived from the audited financial statements in the combined Annual Report on Form 10-K of the General Partner and the Partnership for the year ended December 31, 20182019 (the "2018"2019 Annual Report"), but does not include all disclosures required by accounting principles generally accepted in the United States of America ("GAAP"). The financial statements have been prepared in accordance with GAAP for interim financial information and in accordance with Rule 10-01 of Regulation S-X of the Securities Exchange Act of 1934, as amended. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and revenue and expenses during the reporting period. Our actual results could differ from those estimates and assumptions. These financial statements should be read in conjunction with Management's Discussion and Analysis of Financial Condition and Results of Operations included herein and the consolidated financial statements and notes thereto included in the 20182019 Annual Report.
The General Partner was formed in 1985, and we believe that it qualifies as a REIT under the provisions of the Internal Revenue Code of 1986, as amended (the "Code"). The Partnership was formed on October 4, 1993, when the General Partner contributed all of its properties and related assets and liabilities, together with the net proceeds from an offering of additional shares of its common stock, to the Partnership. Simultaneously, the Partnership completed the acquisition of Duke Associates, a full-service commercial real estate firm operating in the Midwest whose operations began in 1972.
The General Partner is the sole general partner of the Partnership, owning approximately 99.1% of the Common Units at SeptemberJune 30, 2019.2020. The remaining 0.9% of the Common Units are owned by limited partners. As the sole general partner of the Partnership, the General Partner has full, exclusive and complete responsibility and discretion in the day-to-day management and control of the Partnership. The General Partner and the Partnership are operated as one enterprise. The management of the General Partner consists of the same members as the management of the Partnership. As the sole general partner with control of the Partnership, the General Partner consolidates the Partnership for financial reporting purposes, and the General Partner does not have any significant assets other than its investment in the Partnership. Therefore, the assets and liabilities of the General Partner and the Partnership are substantially the same.
Limited partners have the right to redeem their Limited Partner Units, subject to certain restrictions. Pursuant to the Fifth Amended and Restated Agreement of Limited Partnership, as amended (the "Partnership Agreement"), the General Partner is obligated to redeem the Limited Partner Units in shares of its common stock, unless it determines in its reasonable discretion that the issuance of shares of its common stock could cause it to fail to qualify as a REIT. Each Limited Partner Unit shall be redeemed for one share of the General Partner's common stock, or, in the event that the issuance of shares could cause the General Partner to fail to qualify as a REIT, cash equal to the fair market value of one share of the General Partner's common stock at the time of redemption, in each case, subject to certain adjustments described in the Partnership Agreement. The Limited Partner Units are not required, per the terms of the Partnership Agreement, to be redeemed in registered shares of the General Partner.
As of SeptemberJune 30, 2019,2020, we owned and operated a portfolio primarily consisting of industrial properties and provided real estate services to third-party owners. Substantially all of our Rental Operations (see Note 11) are conducted through the Partnership. We conduct our Service Operations (see Note 11) through Duke Realty Services, LLC, Duke Realty Services Limited Partnership and Duke Construction Limited Partnership ("DCLP"), which are consolidated entities that are 100% owned by a combination of the General Partner and the Partnership. DCLP is owned through a taxable REIT subsidiary. The consolidated financial statements include our accounts and the accounts of our majority-owned or controlled subsidiaries.  
11

2. New Accounting Pronouncements
Recently Adopted Accounting Pronouncements
Leases
On January 1, 2019, we adopted Accounting Standards Codification ("ASC") 842, Leases ("ASC 842"), utilizing the available election to adopt on a prospective basis. ASC 842 has superseded all previous GAAP guidance for accounting for leases.
As part of adoption, we elected the package of practical expedients available for implementation, which included: (i) relief from re-assessing whether an expired or existing contract meets the definition of a lease, (ii) relief from re-assessing the classification of expired or existing leases at the adoption date and (iii) allowing previously capitalized initial direct leasing costs to continue to be amortized. Due in large part to electing these practical expedients, the adoption of ASC 842 did not result in recording a cumulative adjustment to the opening balance of distributions in excess of net income.
Lessor Accounting
Our primary business is the development, acquisition, and operation of industrial real estate properties that are held for investment and leased to tenants. Due to electing the package of practical expedients that allow for relief from re-assessing the classification of existing leases at the adoption date, as well as based on the characteristics of our underlying assets and leases, all of our leases are classified as operating leases. We manage residual risk through investing in properties that we believe will appreciate in value over time. We also perform a credit analysis for tenants prior to leases being executed, and on an ongoing basis, to ensure collectability is probable prior to recognizing lease revenues on an accrual basis. For lessors, the accounting under ASC 842 remains largely unchanged with the notable exception that ASC 842 requires that lessors expense certain initial direct costs, which were capitalizable under prior leasing standards, as incurred. Under the new standard, only the incremental costs of signing a lease are capitalizable. As the result of this change, we recognized $1.1 million and $6.7 million of expense for internal costs related to successful leases for the three and nine months ended September 30, 2019, respectively, presented separately in the line item "Non-Incremental Costs Related to Successful Leases" on the Consolidated Statements of Operations and ComprehensiveLease Income which previously would have been capitalized. For the three and nine months ended September 30, 2018, we capitalized $852,000 and $9.2 million, respectively, of internal lease related costs which would have been expensed had ASC 842 been effective.
ASC 842 also requires lessors to exclude certain lessor costs, such as real estate taxes and insurance, that are paid directly by lessees to third parties from rental revenue and the associated rental expense. Lessor costs that are paid by the lessor and reimbursed by the lessee continue to be recorded through rental revenue and the associated rental expense.
ASC 842 provides lessors an additional practical expedient to not separate rental recovery revenue related to lease-related services from the associated rental revenue related to the lease when certain criteria are met. The lease-related services provided to our tenants include property management, common area maintenance ("CAM") and utilities. We assessed the applicable criteria, concluding that the timing and straight-line pattern of transfer to the lessees for rental recovery revenue from our lease-related services and revenue from the underlying leases are the same and that lease classification does not change, and elected to apply this additional practical expedient.
Our leases generally include scheduled rent increases, but do not include variable payments based on indexes. Our rental revenue is primarily based on fixed, non-cancelable leases. Our variable rental revenue primarily consists of amounts recovered from lessees for property tax, insurance and CAM.common area maintenance ("CAM").

If we conclude that collection of lease payments are not probable, any difference between the revenue that would have been recognized under the straight-line method and the lease payments that have been collected is recognized as a current period adjustment to rental revenues. Any other changes in collectability reserves for leases not subject to the collectability constraint are also recorded as a current period adjustment to rental revenues.

All revenues related to lease and lease-related services are included in, and comprise substantially all of, the caption "Rental and Related Revenue" on the Consolidated Statements of Operations and Comprehensive Income. The components of Rental and Related Revenue are as follows (in thousands):
Three Months Ended June 30,Six Months Ended June 30,
Three Months Ended September 30, 2019 Nine Months Ended September 30, 20192020201920202019
Rental revenue - fixed payments$163,516
 $481,674
Rental revenue - fixed payments$169,617  $161,483  $331,224  $318,157  
Rental revenue - variable payments (1)51,858
 156,772
Rental revenue - variable payments (1)56,757  51,624  113,905  104,915  
Rental and related revenue$215,374
 $638,446
Rental and related revenue$226,374  $213,107  $445,129  $423,072  
(1) Primarily includes tenant recoveries for real estate taxes, insurance and CAM.
Accounting for Lease Concessions Granted in Connection with the COVID-19 Outbreak
On April 8, 2020, the Financial Accounting Standard Board ("FASB") held a public meeting and shortly afterwards issued a question-and-answer ("Q&A") document which was intended to provide accounting relief for lease concessions related to the COVID-19 pandemic. The future minimumaccounting relief permits an entity to choose to forgo the evaluation of the enforceable rights and obligations of a lease contract, which is a requirement of Accounting Standards Codification Topic 842, Leases ("ASC 842"), as long as the total rent payments after the lease concessions are substantially the same, or less than, the total payments previously required by the lease. An entity may account for COVID-19 related lease concessions either (i) as if they were part of the enforceable rights and obligations of the parties under the existing lease contract; or (ii) as a lease modification. To the extent that a rent concession is granted as a deferral of payments, but the total lease payments are substantially the same, lessors are allowed to account for the concession as if no change had been made to the original lease contract.
Based on the Q&A, an entity is not required to account for all lease concessions related to the effects of the COVID-19 pandemic under one elected option, however, the entity is required to apply the elected option consistently to leases with similar characteristics and in similar circumstances. As of July 28, 2020, we have executed agreements with certain tenants allowing for the deferral of rental payments totaling $7.8 million. Some of these deferred amounts pertain to rents originally due subsequent to June 30, 2020. The substantial majority of these agreements required repayment of deferred amounts within twelve months of their execution.

The rental deferral agreements that we have executed, where the revised payment terms require repayment of deferred amounts within twelve months of their execution, are eligible for the alternate accounting treatment allowed through the Q&A. We have elected to account for these deferred rental agreements as if the deferral of rental payments was an enforceable right in the original lease agreements. This accounting election resulted in us under non-cancelable operatingnot modifying the pattern of revenue recognition for these leases, to the extent they are as follows (in thousands):collectable, and all deferred amounts related to leases to which we are applying this accounting treatment are classified within Accounts Receivable on the June 30, 2020 Consolidated Balance Sheets.

YearSeptember 30, 2019 December 31, 2018
2019$153,301
 $600,385
2020623,291
 586,609
2021600,850
 529,961
2022537,556
 463,462
2023466,514
 397,150
Thereafter2,058,372
 1,582,598
 $4,439,884
 $4,160,165
12

For deferred rental agreements where the revised terms do not require repayment of the full amount of deferred amounts within twelve months of their execution, even if such revised payment terms fall within the scope of the relief offered by the Q&A, we have continued to apply lease modification accounting as stipulated by ASC 842.

Lessee Accounting
ASC 842 requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase of the leased asset by the lessee. This classification determines whether the lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. A lessee is also required to record a right-of-use ("ROU") asset and a lease liability for all leases with a term of greater than 12 months regardless of classification.
As of SeptemberJune 30, 2019,2020, our lease arrangements, where we are the lessee, primarily consisted of office and ground leases. Adoption of the practical expedients resulted in the continued classification of our leases, which are classified as operating leases. Expense recognized onleases under ASC 842. A $40.8 million right-of-use asset related to these operating leases for the nine months ended September 30, 2019 was not material.
For these arrangements, we recognized a ROU asset and a corresponding lease liability at the January 1, 2019 adoption date of ASC 842, representing the discounted value of future lease payments required under our lease arrangements. A $38.8 million ROU asset, net of pre-existing lease related accruals, wasis included in Other Escrow Deposits and Other Assets, and a corresponding lease liability of $45.0$43.8 million, wasis included in Other Liabilities on our Consolidated Balance Sheets as of SeptemberJune 30, 2019.2020, and represents the discounted value of future lease payments required under our lease agreements. In determining these amounts we elected an available practical expedient that allows us, as a lessee, to not separate lease and non-lease components.

The following table summarizes the future operating lease payments (in thousands) to be made under our non-cancellable lease arrangements:
YearSeptember 30, 2019 December 31, 2018
2019$1,521
 $6,487
20208,037
 7,594
20213,595
 2,987
20222,877
 2,255
20232,585
 1,949
Thereafter86,040
 85,523
Total undiscounted operating lease payments$104,655
 $106,795
Less: imputed interest(59,634)  
Present value of operating lease payments$45,021
  

The weighted average remaining lease term for our lease arrangements, on a combined basis as of September 30, 2019, was 32.5 years. The weighted average discount rate for our lease arrangements as of September 30, 2019 was 4.55%. As the discount rates implied in our lease arrangements are not readily determinable, we utilized our current credit ratings and credit yields observed from market traded securities with similar credit ratings to form a reasonable basis to establish secured borrowing rates when determining the present value of future lease payments.
3. Reclassifications
CertainThere have been no amounts in the accompanying consolidated financial statements for 2018 have been2019 reclassified to conform to the 20192020 consolidated financial statement presentation.

4. Restricted Cash
In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows: Restricted Cash ("ASU 2016-18"). ASU 2016-18 requires entities to show the changes in the totalcash primarily consists of cash proceeds from dispositions but restricted only for qualifying like-kind exchange transactions and cash equivalentsheld in escrow related to acquisition and restricted cash in the statement of cash flows. As a result, entities will no longer present transfers between cash, cash equivalents and restricted cash in the statement of cash flows. We adopted this standard on January 1, 2018, on a retrospective basis, and the adoption did not have a material impact on our consolidated financial statements.
disposition holdbacks.  The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the Consolidated Balance Sheets that sum to the total of the same such amounts shown in the Consolidated Statements of Cash Flows (in thousands):
June 30, 2020December 31, 2019
Cash and cash equivalents$29,870  $110,891  
Restricted cash held in escrow for like-kind exchange—  1,673  
Restricted cash included in other escrow deposits and other assets28,726 ��8,867  
Total cash, cash equivalents, and restricted cash shown in the Consolidated Statements of Cash Flows$58,596  $121,431  
 September 30, 2019 December 31, 2018
Cash and cash equivalents$121,233
 $17,901
Restricted cash held in escrow for like-kind exchange119,240
 —
Restricted cash included in other escrow deposits and other assets10,059
 7,616
Total cash, cash equivalents, and restricted cash shown in the Consolidated Statements of Cash Flows$250,532
 $25,517

Restricted cash held in escrow for like-kind exchange on the Consolidated Balance Sheets includes cash received from the property dispositions but restricted only for qualifying like-kind exchange transactions.

5. Variable Interest Entities
Partnership
Due to the fact that the Limited Partners do not have kick out rights, or substantive participating rights, the Partnership is a variable interest entity ("VIE"). Because the General Partner holds majority ownership and exercises control over every aspect of the Partnership's operations, the General Partner has been determined as the primary beneficiary and, therefore, consolidates the Partnership.

The assets and liabilities of the General Partner and the Partnership are substantially the same, as the General Partner does not have any significant assets other than its investment in the Partnership. All of the Company's debt is an obligation of the Partnership.

Joint Ventures

We have equity interests in unconsolidated joint ventures that primarily own and operate rental properties or hold land for development. We consolidate those joint ventures that are considered to be VIEs where we are the primary beneficiary. We analyze our investments in joint ventures to determine if the joint venture is considered a VIE and would require consolidation. We (i) evaluate the sufficiency of the total equity investment at risk, (ii) review the voting rights and decision-making authority of the equity investment holders as a group and whether there are
13

limited partners (or similar owning entities) that lack substantive participating or kick out rights and (iii) establish whether or not activities within the venture are on behalf of an investor with disproportionately few voting rights in making this VIE determination.

To the extent that we own interests in a VIE and we (i) are the sole entity that has the power to direct the activities of the VIE and (ii) have the obligation or rights to absorb the VIE's losses or receive its benefits, then we would be determined to be the primary beneficiary and would consolidate the VIE. To the extent we own interests in a VIE, then at each reporting period, we re-assess our conclusions as to which, if any, party within the VIE is considered the primary beneficiary. Consolidated joint ventures that are VIEs are not significant in any period presented in these consolidated financial statements.

To the extent that our joint ventures do not qualify as VIEs, they are consolidated if we control them through majority ownership interests or if we are the managing entity (general partner or managing member) and the other partner does not have substantive participating rights. Control is further demonstrated by our ability to unilaterally make significant operating decisions, refinance debt and sell the assets of the joint venture without the consent of the non-managing entity and the inability of the non-managing entity to remove us from our role as the managing entity. Consolidated joint ventures that are not VIEs are not significant in any period presented in these consolidated financial statements.

There were no unconsolidated joint ventures, in which we have any recognized assets or liabilities or have retained any economic exposure to loss at SeptemberJune 30, 2019,2020, that met the criteria to be considered VIEs. Our maximum loss exposure for guarantees of unconsolidated joint venture indebtedness, none of which relate to VIEs, totaled $160.1$59.9 million at SeptemberJune 30, 2019.2020.

6. Acquisitions and Dispositions

Acquisitions and dispositions for the periods presented were completed in accordance with our strategy to reposition our investment concentration among the markets in which we operate and to increase our overall investments in quality industrial projects. Transaction costs related to asset acquisitions are capitalized and transaction costs related to business combinations and dispositions are expensed.




Acquisitions

We did not acquire any buildings during the six months ended June 30, 2020. We paid cash of $146.6 million and $208.9$108.2 million for assetbuilding acquisitions during the ninesix months ended September June 30, 2019 and 2018, respectively..

We acquired 4 properties during the nine months ended September 30, 2019. We determined that these 4 properties did not meet the definition of a business and, accordingly, we accounted for them as asset acquisitions as opposed to business combinations.

The following table summarizes amounts recognized for each major class of assets (in thousands) for these acquisitions during the nine months ended September 30, 2019:
Real estate assets$140,030
Lease related intangible assets9,331
Fair value of acquired net assets$149,361

The leases in the acquired properties had a weighted average remaining life at acquisition of approximately 6.3 years.

Fair Value Measurements
We determine the fair value of the individual components of real estate asset acquisitions primarily through calculating the "as-if vacant" value of a building, using an income approach, which relies significantly upon internally determined assumptions. We have determined that these estimates primarily rely upon level 3 inputs, which are unobservable inputs based on our own assumptions. The most significant assumptions used in calculating the "as-if vacant" value for acquisition activity during the nine months ended September 30, 2019 are as follows:
 LowHigh
Exit capitalization rate4.23%5.26%
Net rental rate per square foot$5.90$15.60

Capitalized acquisition costs were insignificant and the fair value of the 4 properties acquired during the nine months ended September 30, 2019 was substantially the same as the cost of acquisition.
Dispositions
Dispositions of buildings and undeveloped land generated net cash proceeds of $379.8$34.5 million and $434.6$97.5 million during the ninesix months ended SeptemberJune 30, 20192020 and 2018,2019, respectively.

In September 2019, we completedDuring the sale of 18 non-strategic industrial properties for $217.5 million in proceeds and recorded a gain on sale of $146.3 million. These properties totaled 4.1 million square feet and were located in primarily Midwest markets. Additionally, during the ninesix months ended SeptemberJune 30, 2019,2020, we collected $145.0the remaining $110.0 million of principal on our outstanding notes receivable, primarilywhich was related to the sale of our medical office portfolio (the "Medical Office Portfolio Disposition") during 2017. The number of buildings sold, as well as their classification between continuing and discontinued operations, is disclosed in Note 12.










14

7. Indebtedness

All debt is issued directly or indirectly by the Partnership. The General Partner does not have any indebtedness, but does guarantee some of the unsecured debt of the Partnership. The following table summarizes the book value and changes in the fair value of our debt (in thousands):
Book Value at 12/31/2019Book Value at 6/30/2020Fair Value at 12/31/2019Issuances and
Assumptions		Payments/PayoffsAdjustments
to Fair Value		Fair Value at 6/30/2020
Fixed rate secured debt$32,287  $48,737  $34,547  $18,400  $(1,906) $(9,450) $41,591  
Variable rate secured debt1,900  1,900  1,900  —  —  —  1,900  
Unsecured debt2,900,000  3,058,740  3,045,485  675,000  (516,260) 143,342  3,347,567  
Total$2,934,187  $3,109,377  $3,081,932  $693,400  $(518,166) $133,892  $3,391,058  
Less: Deferred financing costs19,422  34,191  
Total indebtedness as reported on the consolidated balance sheets$2,914,765  $3,075,186  
 Book Value at 12/31/2018 Book Value at 9/30/2019 Fair Value at 12/31/2018 
Issuances and
Assumptions
 Payments/Payoffs 
Adjustments
to Fair Value
 Fair Value at 9/30/2019
Fixed rate secured debt$77,601
 $33,171
 $80,238
 $—
 $(44,352) $(163) $35,723
Variable rate secured debt2,200
 1,900
 2,200
 —
 (300) —
 1,900
Unsecured debt2,575,000
 2,750,000
 2,549,963
 175,000
 —
 172,750
 2,897,713
Unsecured line of credit30,000
 —
 30,000
 —
 (30,000) —
 —
Total$2,684,801
 $2,785,071
 $2,662,401
 $175,000
 $(74,652) $172,587
 $2,935,336
Less: Deferred financing costs26,300
 17,489
          
Total indebtedness as reported on the consolidated balance sheets$2,658,501
 $2,767,582
          


Secured Debt

Because our fixed rate secured debt is not actively traded in any marketplace, we utilized a discounted cash flow methodology to determine its fair value. Accordingly, we calculated fair value by applying an estimate of the current market rate to discount the debt's remaining contractual cash flows. Our estimate of a current market rate, which is the most significant input in the discounted cash flow calculation, is intended to replicate debt of similar maturity and loan-to-value relationship. The estimated market rates ranged from 3.10% to 3.40%for all of our current fixed rate secured debt are between 2.20% and 2.90%, depending on the attributes of the specific loans. The current market rates we utilized were internally estimated; therefore, we have concluded that our determination of fair value for our fixed rate secured debt was primarily based upon level 3 inputs.

During the nine months ended September 30, 2019, we repaid threeIn February 2020, a consolidated joint venture obtained an $18.4 million secured loan from a third party financial institution, with a fixed rate secured loans, totaling $41.7 million, which had a weighted average statedannual interest rate of 7.76%.

3.41% and a maturity date of March 1, 2035.
Unsecured Debt

At SeptemberJune 30, 2019,2020, all of our unsecured debt bore interest at fixed rates and primarily consisted of unsecured notes that are publicly traded. We utilized broker estimates in estimating the fair value of our fixed rate unsecured debt. Our unsecured notes are thinly traded and, in certain cases, the broker estimates were not based upon comparable transactions. The broker estimates took into account any recent trades within the same series of our fixed rate unsecured debt, comparisons to recent trades of other series of our fixed rate unsecured debt, trades of fixed rate unsecured debt from companies with profiles similar to ours, as well as overall economic conditions. We reviewed these broker estimates for reasonableness and accuracy, considering whether the estimates were based upon market participant assumptions within the principal and most advantageous market and whether any other observable inputs would be more accurate indicators of fair value than the broker estimates. We concluded that the broker estimates were representative of fair value. We have determined that our estimation of the fair value of our fixed rate unsecured debt was primarily based upon level 3 inputs. The estimated trading values of our fixed rate unsecured debt, depending on the maturity and coupon rates, ranged from 102.00%99.00% to 131.00%136.00% of face value.
In August 2019,February 2020, we issued $175.0$325.0 million of senior unsecured notes bearing interest at a stated interest rate of 3.38%3.05% and maturing on December 15, 2027,March 1, 2050, at 104.16%97.35% of par value, resulting in an effective interest rate of 2.80%3.19%. Proceeds from the unsecured notes offering were primarily used to repay the borrowings under the unsecured line$300.0 million of credit. The notes were issued as additional notes under an indenture pursuant to which we previously issued $300.0 million4.38% senior unsecured notes due 20272022. In connection with the early redemption of these notes, we recognized a loss of $17.8 million consisting of a repayment premium and write-off of deferred financing costs.
15

In June 2020, we issued $350.0 million of senior unsecured notes bearing interest at a stated interest rate of 1.75% and maturing on July 1, 2030, at 99.07% of par value, resulting in December 2017. Thesean effective interest rate of 1.85%. Proceeds from the unsecured notes have substantially identical terms.offering were primarily used to repurchase and cancel $216.3 million of 3.88% senior unsecured notes due 2022 pursuant to a tender offer completed by the Partnership in June 2020. In connection with the early cancellation of these notes, we recognized a loss of $15.0 million consisting of a repayment premium and write-off of deferred financing costs.

The indentures (and related supplemental indentures) governing our outstanding series of unsecured notes also require us to comply with financial ratios and other covenants regarding our operations. We were in compliance with all such financial covenants at SeptemberJune 30, 2019.

2020.
Unsecured Line of Credit
Our unsecured line of credit at SeptemberJune 30, 20192020 is described as follows (in thousands):
DescriptionBorrowing
Capacity		Maturity DateOutstanding Balance at June 30, 2020
Unsecured Line of Credit - Partnership$1,200,000 January 30, 2022$— 
Description
Borrowing
Capacity
 Maturity Date Outstanding Balance at September 30, 2019
Unsecured Line of Credit - Partnership$1,200,000
 
January 30, 2022
 $—


The Partnership's unsecured line of credit has an interest rate on borrowings of LIBOR plus 0.875% and has a maturity date of January 30, 2022,, with options to extend until January 30, 2023. Subject to certain conditions, the terms also include an option to increase the facility by up to an additional $800.0 million, for a total of up to $2.00 billion. This line of credit provides us with an option to obtain borrowings from financial institutions that participate in the line at rates that may be lower than the stated interest rate, subject to certain restrictions.
This line of credit contains financial covenants that require us to meet certain financial ratios and defined levels of performance, including those related to fixed charge coverage, unsecured interest expense coverage and debt-to-asset value (with asset value being defined in the Partnership's unsecured line of credit agreement). At SeptemberJune 30, 2019, 2020, we were in compliance with all financial covenants under this line of credit.
To the extent there are outstanding borrowings, we utilize a discounted cash flow methodology in order to estimate the fair value of outstanding borrowings on our unsecured line of credit. To the extent that credit spreads have changed since the origination of the line of credit, the net present value of the difference between future contractual interest payments and future interest payments based on our estimate of a current market rate would represent the difference between the book value and the fair value. This estimate of a current market rate is based upon the rate, considering current market conditions and our specific credit profile, at which we estimate we could obtain similar borrowings. As our credit spreads have not changed appreciably, we believe that the contractual interest rate and the current market rate on any outstanding borrowings on the line of credit are the same. The current market rate is internally estimated and therefore is primarily based upon a level 3 input.

8. Shareholders' Equity of the General Partner and Partners' Capital of the Partnership
General Partner
The General Partner has an at the market ("ATM") equity program that allows it to issue and sell its common shares through sales agents from time to time. The current ATM program provides for the sale of up to $400.0 million of shares of the General Partner's common stock. Actual sales under the ATM equity program depend on a variety of factors to be determined by the General Partner, including, among others, market conditions, the trading price of the General Partner’s common stock, determinations by the General Partner of the appropriate sources of funding and potential uses of funding available.
In August 2019, the General Partner terminated its previous equity distribution agreement for the ATM equity program and entered into a new equity distribution agreement to sell shares of its common stock, $0.01 par value per share, from time to time, up to an aggregate offering price of $400.0 million.
During the ninesix months ended SeptemberJune 30, 2019,2020, the General Partner issued 6.62.0 million common shares pursuant to its ATM equity programs,program, generating gross proceeds of $218.1$71.6 million and, after deducting commissions and other costs, net proceeds of $215.6$70.7 million. The proceeds from these offeringssales were contributed to the Partnership and used to fund development activities.
16


Partnership
For each common share or preferred share that the General Partner issues, the Partnership issues a corresponding General Partner Unit or Preferred Unit, as applicable, to the General Partner in exchange for the contribution of the proceeds from the stock issuance. Similarly, when the General Partner redeems or repurchases common shares or preferred shares, the Partnership redeems the corresponding General Partner Units or Preferred Units held by the General Partner at the same price.

9. Related Party Transactions
We provide property management, asset management, leasing, construction and other tenant-related services to unconsolidated joint ventures in which we have equity interests. We recorded the corresponding fees based on contractual terms that approximate market rates for these types of services and have eliminated our ownership percentage of these fees in the consolidated financial statements. The following table summarizes the fees earned from these joint ventures, prior to the elimination of our ownership percentage (in thousands): 
Three Months Ended June 30,Six Months Ended June 30,
Three Months Ended September 30, Nine Months Ended September 30,
2019 2018 2019 2018 2020201920202019
Management fees$452
 $462
 $1,318
 $1,359
Management fees$396  $443  $744  $865  
Leasing fees759
 430
 1,315
 1,622
Leasing fees$—  $408  $451  $556  
Construction and development fees582
 1,128
 4,520
 2,804
Construction and development fees$860  $1,742  $1,221  $3,938  

10. Net Income per Common Share or Common Unit
Basic net income per common share or Common Unit is computed by dividing net income attributable to common shareholders or common unitholders, less dividends or distributions on share-based awards expected to vest (referred to as "participating securities" and primarily composed of unvested restricted stock units), by the weighted average number of common shares or Common Units outstanding for the period.


17

Diluted net income per common share is computed by dividing the sum of net income attributable to common shareholders and the noncontrolling interest in earnings allocable to Limited Partner Units (to the extent the Limited Partner Units are dilutive), less dividends or distributions on participating securities that are anti-dilutive, by the sum of the weighted average number of common shares outstanding and, to the extent they are dilutive, weighted average number of Limited Partner Units outstanding and any potential dilutive securities for the period. Diluted net income per Common Unit is computed by dividing the net income attributable to common unitholders, less dividends or distributions on participating securities that are anti-dilutive, by the sum of the weighted average number of Common Units outstanding and any potential dilutive securities for the period. The following table reconciles the components of basic and diluted net income per common share or Common Unit (in thousands): 
 Three Months Ended September 30, Nine Months Ended September 30,
 2019 2018 2019 2018
General Partner       
Net income attributable to common shareholders$226,566
 $53,025
 $342,170
 $319,833
Less: dividends on participating securities(350) (394) (1,125) (1,249)
Basic net income attributable to common shareholders$226,216
 $52,631
 $341,045
 $318,584
Add back dividends on dilutive participating securities350
 —
 1,125
 1,249
Noncontrolling interest in earnings of common unitholders1,968
 495
 2,971
 3,002
Diluted net income attributable to common shareholders$228,534
 $53,126
 $345,141
 $322,835
Weighted average number of common shares outstanding362,416
 357,898
 360,424
 357,235
Weighted average Limited Partner Units outstanding3,142
 3,302
 3,118
 3,350
Other potential dilutive shares1,713
 210
 1,801
 2,160
Weighted average number of common shares and potential dilutive securities367,271
 361,410
 365,343
 362,745
        
Partnership       
Net income attributable to common unitholders$228,534
 $53,520
 $345,141
 $322,835
Less: distributions on participating securities(350) (394) (1,125) (1,249)
Basic net income attributable to common unitholders$228,184
 $53,126
 $344,016
 $321,586
Add back distributions on dilutive participating securities350
 —
 1,125
 1,249
Diluted net income attributable to common unitholders$228,534
 $53,126
 $345,141
 $322,835
Weighted average number of Common Units outstanding365,558
 361,200
 363,542
 360,585
Other potential dilutive units1,713
 210
 1,801
 2,160
Weighted average number of Common Units and potential dilutive securities367,271
 361,410
 365,343
 362,745

 Three Months Ended June 30,Six Months Ended June 30,
 2020201920202019
General Partner
Net income attributable to common shareholders$39,820  $71,053  $59,276  $115,604  
Less: dividends on participating securities(356) (388) (712) (777) 
Basic net income attributable to common shareholders$39,464  $70,665  $58,564  $114,827  
Add back dividends on dilutive participating securities—  —  —  —  
Noncontrolling interest in earnings of common unitholders356  621  526  1,003  
Diluted net income attributable to common shareholders$39,820  $71,286  $59,090  $115,830  
Weighted average number of common shares outstanding368,836  359,681  368,513  359,412  
Weighted average Limited Partner Units outstanding3,331  3,145  3,277  3,105  
Other potential dilutive shares406  100  407  98  
Weighted average number of common shares and potential dilutive securities372,573  362,926  372,197  362,615  
Partnership
Net income attributable to common unitholders$40,176  $71,674  $59,802  $116,607  
Less: distributions on participating securities(356) (388) (712) (777) 
Basic net income attributable to common unitholders$39,820  $71,286  $59,090  $115,830  
Add back distributions on dilutive participating securities—  —  —  —  
Diluted net income attributable to common unitholders$39,820  $71,286  $59,090  $115,830  
Weighted average number of Common Units outstanding372,167  362,826  371,790  362,517  
Other potential dilutive units406  100  407  98  
Weighted average number of Common Units and potential dilutive securities372,573  362,926  372,197  362,615  
The following table summarizes the data that is excluded from the computation of net income per common share or Common Unit as a result of being anti-dilutive (in thousands): 
 Three Months Ended June 30,Six Months Ended June 30,
 2020201920202019
General Partner and Partnership
Other potential dilutive shares or units:
Anti-dilutive outstanding potential shares or units under fixed stock option and other stock-based compensation plans—  —  —  —  
Anti-dilutive outstanding participating securities1,660  1,960  1,660  1,960  
 Three Months Ended September 30, Nine Months Ended September 30,
 2019 2018 2019 2018
General Partner and Partnership       
Other potential dilutive shares or units:       
Anti-dilutive outstanding potential shares or units under fixed stock option and other stock-based compensation plans—
 —
 —
 —
Anti-dilutive outstanding participating securities—
 2,147
 —
 —
18


11. Segment Reporting
Reportable Segments
As of SeptemberJune 30, 2019,2020, we had 2 reportable operating segments, the first consisting of the ownership and rental of industrial real estate investments. Our ongoing investments in new real estate investments are determined largely upon anticipated geographic trends in supply and demand for industrial buildings, as well as the real estate needs of our major tenants that operate on a national level. Our strategic initiatives and our allocation of resources have been historically based upon allocation among product types, which was consistent with our designation of reportable segments, and after having sold nearly all of our office and medical office properties we intendcontinue to increase our investment in industrial properties and treat them as a single operating and reportable segment. Properties not included in our reportable segments, because they are not industrial properties and do not by themselves meet the quantitative thresholds for separate presentation as a reportable segment, are generally referred to as non-reportable Rental Operations. Our non-reportable Rental Operations primarily include our remaining office properties and medical office property at SeptemberJune 30, 2019.2020. The operations of our industrial properties, as well as our non-reportable Rental Operations, are collectively referred to as "Rental Operations."

Our second reportable segment consists of various real estate services such as property management, asset management, maintenance, leasing, development, general contracting and construction management to third-party property owners and joint ventures, and is collectively referred to as "Service Operations." The Service Operations segment is identified as one single operating segment because the lowest level of financial results reviewed by our chief operating decision maker are the results for the Service Operations segment in total. Further, our reportable segments are managed separately because each segment requires different operating strategies and management expertise.

Revenues by Reportable Segment

The following table shows the revenues for each of the reportable segments, as well as a reconciliation to consolidated revenues (in thousands): 
 Three Months Ended June 30,Six Months Ended June 30,
 2020201920202019
Revenues
Rental Operations:
Industrial$224,472  $211,004  $441,424  $419,407  
Non-reportable Rental Operations1,383  1,478  2,911  2,930  
Service Operations12,137  23,919  19,751  78,883  
Total segment revenues237,992  236,401  464,086  501,220  
Other revenue519  625  794  735  
Consolidated revenue$238,511  $237,026  $464,880  $501,955  
 Three Months Ended September 30, Nine Months Ended September 30,
 2019 2018 2019 2018
Revenues       
Rental Operations:       
Industrial$213,819
 $194,922
 $633,226
 $574,866
Non-reportable Rental Operations1,471
 1,481
 4,401
 6,300
Service Operations25,955
 34,986
 104,838
 94,552
Total segment revenues241,245
 231,389
 742,465
 675,718
Other revenue84
 509
 819
 1,295
Consolidated revenue from continuing operations241,329
 231,898
 743,284
 677,013
Discontinued operations—
 85
 —
 117
Consolidated revenue$241,329
 $231,983
 $743,284
 $677,130



Supplemental Performance Measure

Property-level net operating income on a cash basis ("PNOI") is the non-GAAP supplemental performance measure that we use to evaluate the performance of, and to allocate resources among, the real estate investments in the reportable and operating segments that comprise our Rental Operations. PNOI for our Rental Operations segments is comprised of rental revenues from continuing operations less rental expenses and real estate taxes from continuing operations, along with certain other adjusting items (collectively referred to as "Rental Operations revenues and expenses excluded from PNOI," as shown in the following table). Additionally, we do not allocate interest expense, depreciation expense and certain other non-property specific revenues and expenses (collectively referred to as "Non-Segment Items," as shown in the following table) to our individual operating segments.

19

We evaluate the performance of our Service Operations reportable segment using net income or loss, as allocated to that segment ("Earnings from Service Operations").

The most comparable GAAP measure to PNOI is income from continuing operations before income taxes. PNOI excludes expenses that materially impact our overall results of operations and, therefore, should not be considered as a substitute for income from continuing operations before income taxes or any other measures derived in accordance with GAAP. Furthermore, PNOI may not be comparable to other similarly titled measures of other companies.
The following table shows a reconciliation of our segment-level measures of profitability to consolidated income from continuing operations before income taxes (in thousands and excluding discontinued operations): 
 Three Months Ended June 30,Six Months Ended June 30,
 2020201920202019
PNOI
Industrial$160,966  $149,369  $317,305  $292,251  
Non-reportable Rental Operations1,053  862  2,872  1,740  
PNOI, excluding all sold properties162,019  150,231  320,177  293,991  
PNOI from sold properties included in continuing operations(3) 5,952  111  11,944  
PNOI, continuing operations$162,016  $156,183  $320,288  $305,935  
Earnings from Service Operations1,731  730  2,777  3,108  
Rental Operations revenues and expenses excluded from PNOI:
Straight-line rental income and expense, net6,774  4,762  8,476  10,466  
Revenues related to lease buyouts2,033  —  2,426  19  
Amortization of lease concessions and above and below market rents1,540  1,542  4,097  2,804  
Intercompany rents and other adjusting items(703) 60  (375) 103  
Non-Segment Items:
Equity in earnings of unconsolidated joint ventures2,396  4,143  4,935  8,858  
Interest expense(22,841) (23,510) (46,335) (45,642) 
Depreciation and amortization expense(86,704) (83,004) (172,063) (158,996) 
Gain on sale of properties—  30,592  8,937  30,429  
Impairment charges—  —  (5,626) —  
Interest and other income, net216  2,534  1,611  5,292  
General and administrative expenses(13,606) (13,420) (35,369) (35,403) 
Gain on land sales6,070  1,950  6,205  2,700  
Other operating expenses(1,546) (1,518) (2,658) (3,641) 
Loss on extinguishment of debt(14,972) —  (32,778) (13) 
Gain on involuntary conversion1,283  —  1,283  2,259  
Non-incremental costs related to successful leases(4,034) (3,447) (6,559) (5,603) 
Other non-segment revenues and expenses, net394  588  327  663  
Income from continuing operations before income taxes$40,047  $78,185  $59,599  $123,338  
  Three Months Ended September 30, Nine Months Ended September 30,
  2019 2018 2019 2018
PNOI        
Industrial $151,906
 $136,456
 $446,446
 $391,645
Non-reportable Rental Operations 883
 1,312
 2,623
 4,029
PNOI, excluding all sold properties 152,789
 137,768
 449,069
 395,674
PNOI from sold properties included in continuing operations 3,119
 5,546
 12,774
 24,668
PNOI, continuing operations $155,908
 $143,314
 $461,843
 $420,342
         
Earnings from Service Operations 2,315
 1,256
 5,423
 5,160
  
 
 
 
Rental Operations revenues and expenses excluded from PNOI:        
Straight-line rental income and expense, net 5,537
 5,832
 16,003
 16,763
Revenues related to lease buyouts 1,089
 —
 1,108
 23
Amortization of lease concessions and above and below market rents 1,741
 593
 4,545
 1,599
Intercompany rents and other adjusting items 77
 48
 180
 206
Non-Segment Items:        
Equity in earnings of unconsolidated joint ventures 3,736
 5,552
 12,594
 15,521
Interest expense (22,604) (21,462) (68,246) (62,137)
Depreciation and amortization expense (83,924) (78,855) (242,920) (232,216)
Gain on sale of properties 173,646
 (107) 204,075
 194,741
Interest and other income, net 2,085
 4,129
 7,377
 13,319
General and administrative expenses (13,720) (8,959) (49,123) (43,441)
Gain on land sales 3,869
 3,915
 6,569
 7,221
Other operating expenses (874) (1,104) (4,515) (3,902)
Loss on extinguishment of debt —
 (89) (13) (240)
Gain on involuntary conversion —
 —
 2,259
 —
Non-incremental costs related to successful leases (1,123) —
 (6,726) —
Other non-segment revenues and expenses, net 125
 (1,658) 788
 (3,887)
Income from continuing operations before income taxes $227,883
 $52,405
 $351,221
 $329,072







20

12. Real Estate Assets, Discontinued Operations and Assets Held-for-Sale

Real Estate Assets
Real estate assets, excluding assets held-for-sale, consisted of the following (in thousands):
September 30, 2019 December 31, 2018June 30, 2020December 31, 2019
Buildings and tenant improvements$5,224,690
 $4,980,003
Buildings and tenant improvements$5,541,171  $5,295,336  
Land and improvements2,466,953
 2,268,343
Land and improvements2,617,697  2,532,541  
Other real estate investments (1)Other real estate investments (1)135,039  165,500  
Real estate assets$7,691,643
 $7,248,346
Real estate assets$8,293,907  $7,993,377  
(1) Consists of underutilized in-fill sites, which may have had buildings/structures on site when we acquired them, that are either (i) under lease to a third party and, after the lease ends, are expected to be redeveloped or will require significant capital expenditures before re-leasing; or (ii) industrial/logistics properties that we intend to re-lease after significant retrofitting and/or environmental remediation is completed.

Discontinued Operations
The following table illustrates the number of sold or held-for-sale properties in this report, all of which were excluded from discontinued operations:
 Held-for-Sale at September 30, 2019 Sold Year-to-Date in 2019 Sold in 2018 Total
    
    
 Properties sold or classified as held-for-sale1 27 15 43
Held-for-Sale at June 30, 2020Sold Year-to-Date in 2020Sold in 2019Total
 Properties sold or classified as held-for-sale—12829

The following table illustrates the operational results of the buildings reflected in discontinued operations (in thousands):
 Three Months Ended September 30, Nine Months Ended September 30,
 2019 2018 2019 2018
Revenues$—
 $85
 $—
 $117
Operating expenses—
 —
 —
 (9)
Operating income—
 85
 —
 108
Gain on sale of properties112
 136
 366
 3,157
Income from discontinued operations$112
 $221
 $366
 $3,265

The amounts classified in discontinued operations for the three and nine months ended September 30, 2019 and 2018 were comprised of true-up activity related to properties sold in previous years that were classified as discontinued operations.
Allocation of Noncontrolling Interests - General Partner
The following table illustrates the General Partner's share of the income attributable to common shareholders from continuing operations and discontinued operations, reduced by the allocation of income between continuing and discontinued operations to the noncontrolling interests (in thousands):
 Three Months Ended September 30, Nine Months Ended September 30,
 2019 2018 2019 2018
Income from continuing operations attributable to common shareholders$226,455
 $52,806
 $341,807
 $316,598
Income from discontinued operations attributable to common shareholders111
 219
 363
 3,235
Net income attributable to common shareholders$226,566
 $53,025
 $342,170
 $319,833

Three Months Ended June 30,Six Months Ended June 30,
 2020201920202019
Income from continuing operations attributable to common shareholders$39,797  $70,955  $59,206  $115,352  
Income from discontinued operations attributable to common shareholders23  98  70  252  
Net income attributable to common shareholders$39,820  $71,053  $59,276  $115,604  
Allocation of Noncontrolling Interests - Partnership
Substantially all of the income from discontinued operations for all periods presented in the Partnership's Consolidated Statements of Operations and Comprehensive Income is attributable to the common unitholders.

21

Assets Held-for-Sale
The following table illustrates aggregate balance sheet information for assets held-for-sale (in thousands):
Held-for-Sale Properties Included in Continuing Operations
June 30, 2020December 31, 2019
Land and improvements$— $4,561 
Buildings and tenant improvements— 18,840 
Undeveloped land— — 
Accumulated depreciation— (7,132)
Deferred leasing and other costs, net— 2,100 
Other assets— 94 
Total assets held-for-sale$— $18,463 
Total liabilities related to assets held-for-sale$— $887 
 Held-for-Sale Properties Included in Continuing Operations
 September 30, 2019 December 31, 2018
Land and improvements$1,268
 $—
Buildings and tenant improvements26,879
 —
Undeveloped land—
 1,966
Accumulated depreciation(7,931) (884)
Deferred leasing and other costs, net3,057
 —
Other assets466
 —
Total assets held-for-sale$23,739
 $1,082
    
Accrued expenses$761
 $—
Other liabilities1,754
 —
Total liabilities related to assets held-for-sale$2,515
 $—

13.    Financial Instruments
We are exposed to capital market risk, such as changes in interest rates. In an effort to manage interest rate risk, we may enter into interest rate hedging arrangements from time to time. We do not utilize derivative financial instruments for trading or speculative purposes.

As of September 30, 2019 and December 31, 2018, the following forward-starting interest rate swaps designated as cash flow hedges (in thousands) were outstanding:
  Asset (Liability) Fair Value
Notional Amount September 30, 2019 December 31, 2018
$125,000
 $(16,630) $(2,914)
75,000
 (9,993) (1,762)
75,000
 (7,914) —
50,000
 (5,283) —
25,000
 (2,284) —
$350,000
 $(42,104) $(4,676)


We entered into these interest rate swap contracts to hedge our exposure to the changes in the interest rates on the debt issuances, meeting certain criteria, which occur between August 1, 2019 and December 31, 2020.

We determined the fair values of these interest rate swaps by using standard market conventions and techniques such as discounted cash flow analysis, option pricing models and termination cost at each balance sheet date. The inputs used to value these interest rate swaps fall within level 2 of the fair value hierarchy. We have recorded the fair values of our interest rate swap contracts, which totaled $42.1 million and $4.7 million as of September 30, 2019 and December 31, 2018, respectively, as liabilities, included in Other Liabilities and Accumulated Other Comprehensive Loss on our Consolidated Balance Sheets.


14. Subsequent Events
Declaration of Dividends/Distributions
The General Partner's board of directors declared the following dividends/distributions at its regularly scheduled board meeting held on October 30, 2019:July 29, 2020:
Class of stock/unitsQuarterly Amount per Share or UnitRecord DatePayment Date
Common - Quarterly$0.235August 14, 2020August 31, 2020
Class of stock/unitsQuarterly Amount per Share or UnitRecord DatePayment Date
Common - Quarterly$0.235
November 14, 2019
November 29, 2019
COVID-19 Pandemic
We are closely monitoring the impact of the COVID-19 pandemic on all aspects of our business and geographies, including how it will impact our tenants and business partners. Through July 28, 2020, we have collected over 97.0% of originally scheduled July rent payments while 2.6% of originally scheduled July rent payments have been deferred to later periods pursuant to executed agreements with tenants.
While the COVID-19 outbreak did not have a material impact on our financial statements during the six months ended June 30, 2020, we are unable to predict the impact that it will have on our financial condition, results of operations and cash flows in future periods due to numerous uncertainties.
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Redemption of Unsecured Notes
On October 24, 2019, we redeemed $250.0 million of unsecured notes that were scheduled to mature in February 2021. We paid a prepayment premium of approximately $6.0 million in connection with the redemption of these notes.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
The following Management's Discussion and Analysis of Financial Condition and Results of Operations is intended to help the reader understand our operations and our present business environment. Management's Discussion and Analysis is provided as a supplement to, and should be read in conjunction with, our consolidated financial statements and the notes thereto contained in Part I, Item 1 of this Report, and the consolidated financial statements and notes thereto contained in Part IV, Item 15 of our 20182019 Annual Report.
Cautionary Notice Regarding Forward-Looking Statements
Certain statements contained in or incorporated by reference into this Report, including, without limitation, those related to our future operations and those related to our expectations concerning the effects of the COVID-19 pandemic on our future operations and balance sheet, constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The words "believe," "estimate," "expect," "anticipate," "intend," "plan," "strategy," "continue," "seek," "may," "could" and similar expressions or statements regarding future periods are intended to identify forward-looking statements, although not all forward-looking statements may contain such words.
These forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause our actual results, performance or achievements, or industry results, to differ materially from any predictions of future results, performance or achievements that we express or imply in this Report or in the information incorporated by reference into this Report. Some of the risks, uncertainties and other important factors that may affect future results include, among others:
•The impact of the COVID-19 pandemic on our business, our tenants and the economy in general, including the measures taken by governmental authorities to address it;
•Changes in general economic and business conditions, including the financial condition of our tenants and the value of our real estate assets;
•The General Partner's continued qualification as a REIT for U.S. federal income tax purposes;
•Heightened competition for tenants and potential decreases in property occupancy;
•Potential changes in the financial markets and interest rates;
•Volatility in the General Partner's stock price and trading volume;
•Our continuing ability to raise funds on favorable terms, or at all;
•Our ability to successfully identify, acquire, develop and/or manage properties on terms that are favorable to us;
•Potential increases in real estate construction costs;costs including construction cost increases as the result of trade disputes and tariffs on goods imported in the United States;
•Our real estate asset concentration in the industrial sector and potential volatility in this sector;
•Our ability to successfully dispose of properties on terms that are favorable to us;
•Our ability to successfully integrate our acquired properties;
•Our ability to retain our current credit ratings;
•Inherent risks related to disruption of information technology networks and related systems and cyber security attacks and new system implementation;attacks;
•Inherent risks in the real estate business, including, but not limited to, tenant defaults, potential liability relating to environmental matters and liquidity of real estate investments; and
•Other risks and uncertainties described herein, as well as those risks and uncertainties discussed from time to time in our other reports and other public filings with the Securities and Exchange Commission (the "SEC").
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Although we presently believe that the plans, expectations and anticipated results expressed in or suggested by the forward-looking statements contained in or incorporated by reference into this Report are reasonable, all forward-looking statements are inherently subjective, uncertain and subject to change, as they involve substantial risks and uncertainties, including those beyond our control. New factors emerge from time to time, and it is not possible for us to predict the nature, or assess the potential impact, of each new factor on our business. Given these uncertainties, we caution you not to place undue reliance on these forward-looking statements. We undertake no obligation to update or revise any of our forward-looking statements for events or circumstances that arise after the statement is made, except as otherwise may be required by law.


The above list of risks and uncertainties is only a summary of some of the most important factors and is not intended to be exhaustive. Additional information regarding risk factors that may affect us is included in our 20182019 Annual Report and in Part II, Item 1A, "Risk Factors" in this Report. The risk factors contained in our 2019 Annual Report are updated by us from time to time in Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other filings that we make with the SEC. 
Business Overview
The General Partner and Partnership collectively specialize in the ownership, management and development of industrial real estate.
The General Partner is a self-administered and self-managed REIT that began operations in 1986 and is the sole general partner of the Partnership. The Partnership is a limited partnership formed in 1993, at which time all of the properties and related assets and liabilities of the General Partner, as well as proceeds from a secondary offering of the General Partner's common shares, were contributed to the Partnership. Simultaneously, the Partnership completed the acquisition of Duke Associates, a full-service commercial real estate firm operating in the Midwest whose operations began in 1972. We operate the General Partner and the Partnership as one enterprise, and therefore, our discussion and analysis refers to the General Partner and its consolidated subsidiaries, including the Partnership, collectively. A more complete description of our business, and of management's philosophy and priorities, is included in our 20182019 Annual Report.
At SeptemberJune 30, 2019,2020, we:
•Owned or jointly controlled 516521 primarily industrial properties, of which 497507 properties with 148.0149.6 million square feet were in service and 1914 properties with 7.26.7 million square feet were under development. The 497507 in-service properties were comprised of 457468 consolidated properties with 135.3138.5 million square feet and 4039 unconsolidated joint venture properties with 12.711.1 million square feet. The 1914 properties under development consisted of 1813 consolidated properties with 7.16.4 million square feet and one unconsolidated joint venture property with 133,000358,000 square feet.
•Owned directly, or through ownership interests in unconsolidated joint ventures (with acreage not adjusted for our percentage ownership interest), approximately 1,5001,350 acres of land and controlled approximately 1,000900 acres through purchase options.
Our overall strategy is to continue to increase our investment in quality industrial properties primarily through development, on both a speculative and build-to-suit basis, supplemented with acquisitions in higher barrier markets with the highest growth potential.

COVID-19

As the result of the COVID-19 pandemic, we have made various changes to our operations in order to support the health and safety of our associates and the communities in which we operate. The pandemic has had a far-reaching impact on the global economy but the demand for industrial real estate continues to be healthy, especially as the demand for industrial space to support e-commerce has accelerated.
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As of July 28, 2020, we have executed deferral agreements with certain tenants that will eventually allow for $7.8 million of total scheduled rental payments to be deferred and repaid in future periods. Some of these deferred amounts pertain to rents originally due subsequent to June 30, 2020. The substantial majority of these agreements required repayment of the deferred amounts within twelve months of their execution. Through July 28, 2020, we have collected over 97.0% of originally scheduled July rent payments while 2.6% of originally scheduled July rent payments have been deferred to later periods pursuant to executed agreements with tenants.

We have not started any new speculative development projects since the beginning of the pandemic. We have been able to continue leasing our existing speculative space through the second quarter of 2020 and, depending on future economic conditions, we may resume speculative developments in certain markets.

The pandemic's impact on the overall global economy is continuing and the ultimate impact is unknown at this time. Please see Part II, Item 1A, "Risk Factors" below for additional information about the potential impacts the pandemic may have on our business and results of operations.

Key Performance Indicators
Our operating results depend primarily upon rental income from our Rental Operations. The following discussion highlights the areasmetrics that drive the performance of our Rental Operations, which management uses to operate the business, and that we consider to be critical drivers of future revenues.
Occupancy Analysis
Occupancy is an important metric for management and our investors for understanding our financial performance. Our ability to maintain high occupancy rates is aamong the principal driverdrivers of maintaining and increasing rental revenue. The following table sets forth percent leased and average net effective rent information regarding our in-service portfolio of rental properties at SeptemberJune 30, 20192020 and 2018,2019, respectively:
Total Square Feet
(in thousands)
 
Percent of
Total Square Feet
 Percent Leased* Average Annual Net Effective Rent** Total Square Feet
(in thousands)		Percent of
Total Square Feet		Percent Leased*Average Annual Net Effective Rent**
Type2019 2018 2019 2018 2019 2018 2019 2018Type20202019202020192020201920202019
Industrial135,096
 130,425
 99.8% 99.8% 96.1% 97.0% $4.90 $4.64Industrial138,241  138,504  99.8 %99.8 %96.8 %95.8 %$5.10$4.82
Non-reportable Rental Operations211
 309
 0.2% 0.2% 77.3% 55.0% $24.76 $24.16Non-reportable Rental Operations211  211  0.2 %0.2 %80.5 %77.3 %$24.27$24.75
Total Consolidated135,307
 130,734
 100.0% 100.0% 96.0% 96.9% $4.93 $4.67Total Consolidated138,452  138,715  100.0 %100.0 %96.8 %95.7 %$5.12$4.85
Unconsolidated Joint Ventures12,656
 11,583
     97.6% 93.7% $4.10 $4.25Unconsolidated Joint Ventures11,109  12,867  95.7 %90.8 %$4.23$4.12
Total Including Unconsolidated Joint Ventures147,963
 142,317
     96.2% 96.6% Total Including Unconsolidated Joint Ventures149,561  151,582  96.7 %95.3 %
* Represents the percentage of total square feet leased based on executed leases and without regard to whether the leases have commenced. * Represents the percentage of total square feet leased based on executed leases and without regard to whether the leases have commenced. * Represents the percentage of total square feet leased based on executed leases and without regard to whether the leases have commenced.
**Average annual net effective rent represents average annual base rental payments per leased square foot, on a straight-line basis for the term of each lease, from space leased to tenants at the end of the most recent reporting period. This amount excludes additional amounts paid by tenants as reimbursement for operating expenses.**Average annual net effective rent represents average annual base rental payments per leased square foot, on a straight-line basis for the term of each lease, from space leased to tenants at the end of the most recent reporting period. This amount excludes additional amounts paid by tenants as reimbursement for operating expenses.**Average annual net effective rent represents average annual base rental payments per leased square foot, on a straight-line basis for the term of each lease, from space leased to tenants at the end of the most recent reporting period. This amount excludes additional amounts paid by tenants as reimbursement for operating expenses.
The lowerhigher leased percentage in our industrial portfolio at SeptemberJune 30, 2020, compared to June 30, 2019, comparedwas due to September 30, 2018, resulted from newleasing up speculative developments being placed in service, partially offset by net absorption of previously vacant space.developments.
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Vacancy Activity
The following table sets forth vacancy activity, shown in square feet, from our in-service rental properties for the ninesix months ended SeptemberJune 30, 20192020 (in thousands):
Consolidated PropertiesUnconsolidated Joint Venture PropertiesTotal Including Unconsolidated Joint Venture Properties
Vacant square feet at December 31, 20194,540  406  4,946  
  Vacant space in completed developments972  —  972  
  Expirations1,213  68  1,281  
  Early lease terminations1,280  —  1,280  
  Property structural changes/other14  —  14  
  Leasing of previously vacant space(3,535) —  (3,535) 
Vacant square feet at June 30, 20204,484  474  4,958  
 Consolidated Properties Unconsolidated Joint Venture Properties Total Including Unconsolidated Joint Venture Properties
Vacant square feet at December 31, 20184,847
 591
 5,438
  Acquisitions162
 —
 162
  Vacant space in completed developments2,508
 645
 3,153
  Dispositions(573) (95) (668)
  Expirations3,512
 93
 3,605
  Early lease terminations680
 24
 704
  Property structural changes/other5
 —
 5
  Leasing of previously vacant space(5,772) (955) (6,727)
Vacant square feet at September 30, 20195,369
 303
 5,672


Total Leasing Activity
Our ability to maintain and improve occupancy and net effective rents primarily depends upon our continuing ability to lease vacant space. The volume and quality of our leasing activity is closely scrutinized by management in operation of the business and provides useful information regarding future performance. The initial leasing of development projects or vacant space in acquired properties is referred to as first generation lease activity. Our ability to maintain and improve occupancy rates and net effective rents primarily depends upon our continuing ability to re-lease expiring space. The leasing of such space that we have previously held under lease to a tenant is referred to as second generation lease activity. Second generation lease activity may be in the form of renewals of existing leases or new second generation leases of previously leased space. The total leasing activity for our consolidated and unconsolidated industrial rental properties, expressed in square feet of leases signed, is as follows (in thousands):
Three Months Ended June 30,Six Months Ended June 30,
2020201920202019
New Leasing Activity - First Generation1,7013,7073,0344,664
New Leasing Activity - Second Generation1,3145541,573857
Renewal Leasing Activity1,9393,0832,5954,586
Early Renewal Leasing Activity *
1,2531,4541,3111,915
Short-Term New Leasing Activity **
4143371,069708
Short-Term Renewal Leasing Activity **
86037938619
Non-Reportable Rental Operations Leasing Activity1—11
Total Consolidated Leasing Activity7,4829,17210,52113,350
Unconsolidated Joint Venture Leasing Activity1531371,128210
Total Including Unconsolidated Joint Venture Leasing Activity7,6359,30911,64913,560
* Early renewals represent renewals executed more than two years in advance of a lease's originally scheduled end date.
** Short-term leases represent leases with a term of less than twelve months.
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 Three Months Ended September 30, Nine Months Ended September 30,
 2019 2018 2019 2018
New Leasing Activity - First Generation Industrial2,111
 1,601
 6,775 7,281
New Leasing Activity - Second Generation Industrial984
 556
 1,841 3,879
Renewal Leasing Activity - Industrial3,131
 2,637
 7,717 6,149
Non-reportable Rental Operations Leasing Activity3
 —
 4 4
Total Consolidated Leasing Activity6,229
 4,794
 16,337 17,313
Unconsolidated Joint Venture Leasing Activity1,322
 375
 1,532 2,599
Total Including Unconsolidated Joint Venture Leasing Activity7,551
 5,169
 17,869 19,912





















Second Generation Leases
The following table sets forth the estimated costs of tenant improvements and leasing commissions, on a per square foot basis, that we are obligated to fulfill under the second generation industrial leases signed for our rental properties during the three and ninesix months ended SeptemberJune 30, 20192020 and 2018:2019:
Square Feet of Leases
(in thousands)
 Percent of Expiring Leases Renewed Average Term in Years Estimated Tenant Improvement Cost per Square Foot Leasing Costs per Square Foot Square Feet of Leases
(in thousands)		Percent of Expiring Leases RenewedAverage Term in YearsEstimated Tenant Improvement Cost per Square FootLeasing Costs per Square Foot
2019 2018 2019 2018 2019 2018 2019 2018 2019 20182020201920202019202020192020201920202019
Three Months          Three Months
Consolidated - New Second Generation984
 556
     5.5
 5.2 $2.21 $2.04 $2.10 $1.64Consolidated - New Second Generation1,314  554  4.15.0$1.92$1.43$1.89$1.32
Unconsolidated Joint Ventures - New Second Generation49
 38
     10.2
 5.5 $3.49 $3.58 $4.57 $2.27Unconsolidated Joint Ventures - New Second Generation—  70  —6.7—1.87—2.41
Total - New Second Generation1,033
 594
     5.7
 5.2 $2.27 $2.13 $2.22 $1.68Total - New Second Generation1,314  624  4.15.2$1.92$1.47$1.89$1.44
          
Consolidated - Renewal3,131
 2,637
 82.2% 82.5% 4.3
 4.3 $0.46 $0.47 $1.14 $1.08Consolidated - Renewal1,939  3,083  75.1 %82.3 %5.24.8$1.04$0.83$1.76$1.57
Unconsolidated Joint Ventures - Renewal459
 284
 90.3% 85.1% 5.9
 5.0 $0.95 $0.10 $2.29 $1.53Unconsolidated Joint Ventures - Renewal—  67  — %60.6 %—6.3—0.48—2.65
Total - Renewal3,590
 2,921
 83.1% 82.7% 4.5
 4.4 $0.52 $0.43 $1.29 $1.12Total - Renewal1,939  3,150  75.1 %81.7 %5.24.9$1.04$0.83$1.76$1.59
          
Nine Months          
Six MonthsSix Months
Consolidated - New Second Generation1,841
 3,879
     5.7
 6.3 $2.75 $1.62 $2.22 $1.82Consolidated - New Second Generation1,573  857  4.15.8$2.24$3.37$1.90$2.36
Unconsolidated Joint Ventures - New Second Generation165
 215
     7.2
 8.5 $1.82 $2.24 $2.75 $2.91Unconsolidated Joint Ventures - New Second Generation—  115  —6.1—1.12—1.98
Total - New Second Generation2,006
 4,094
     5.8
 6.4 $2.67 $1.65 $2.26 $1.88Total - New Second Generation1,573  972  4.15.8$2.24$3.10$1.90$2.31
          
Consolidated - Renewal7,717
 6,149
 82.3% 77.2% 4.4
 4.4 $0.71 $0.77 $1.30 $1.18Consolidated - Renewal2,595  4,586  70.1 %82.4 %5.04.5$1.10$0.88$1.61$1.41
Unconsolidated Joint Ventures - Renewal554
 395
 85.6% 63.9% 6.0
 5.3 $0.92 $0.40 $2.32 $1.67Unconsolidated Joint Ventures - Renewal497  95  87.9 %68.4 %4.46.00.480.781.722.43
Total - Renewal8,271
 6,544
 82.5% 76.2% 4.5
 4.4 $0.72 $0.75 $1.37 $1.21Total - Renewal3,092  4,681  72.4 %82.1 %4.94.5$1.00$0.88$1.62$1.43
Growth in average annual net effective rents for new second generation and renewal leases, on a combined basis, for our consolidated and unconsolidated industrial rental properties, is as follows:
Three Months Ended June 30,Six Months Ended June 30,
Ownership Type2020201920202019
Consolidated properties26.6 %28.0 %26.9 %26.5 %
Unconsolidated joint venture properties— %37.6 %44.1 %28.9 %
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 Three Months Ended September 30, Nine Months Ended September 30,
Ownership Type2019 2018 2019 2018
Consolidated properties22.5% 27.4% 25.0% 25.0%
Unconsolidated joint venture properties44.9% 33.8% 38.2% 33.8%


Lease Expirations
The table below reflects our consolidated in-service portfolio lease expiration schedule at SeptemberJune 30, 20192020 (in thousands, except percentage data and number of leases):
 Total Consolidated PortfolioIndustrialNon-Reportable
Year of
Expiration		Square
Feet		Annual Rental
Revenue*		Number of LeasesSquare
Feet		Annual Rental
Revenue*		Square
Feet		Annual Rental
Revenue*
Remainder of 20203,989$19,552  533,988$19,546  1$6  
202112,35658,522  13712,35658,522  ——  
202218,55478,822  15018,53778,630  17192  
202313,73169,820  14713,71069,528  21292  
202414,39471,908  13614,38971,846  562  
202514,45374,311  12614,45174,286  225  
202610,21249,047  5510,21249,047  ——  
20278,28439,479  338,27939,422  557  
20288,28354,363  328,16450,876  1193,487  
20298,42845,436  268,42845,436  ——  
2030 and Thereafter21,284125,023  6421,284125,023  ——  
Total Leased133,968$686,283  959133,798$682,162  170$4,121  
Total Portfolio Square Feet138,452138,241211
Percent Leased96.8 %96.8 %80.5 %
* Annualized rental revenue represents average annual base rental payments, on a straight-line basis for the term of each lease, from space leased to tenants at the end of the most recent reporting period. Annualized rental revenue excludes additional amounts paid by tenants as reimbursement for operating expenses.
 Total Consolidated Portfolio Industrial Non-reportable
Year of
Expiration		Square
Feet		 Annual Rental
Revenue*		 Number of Leases Square
Feet		 Annual Rental
Revenue*		 Square
Feet		 Annual Rental
Revenue*
Remainder of 2019816
 $4,676
 14 816
 $4,676
 —
 $—
20209,929
 46,552
 122 9,923
 46,478
 6
 74
202112,085
 57,071
 137 12,085
 57,071
 —
 —
202219,158
 80,475
 145 19,141
 80,283
 17
 192
202313,035
 65,408
 137 13,019
 65,187
 16
 221
202414,795
 74,772
 137 14,790
 74,710
 5
 62
202512,148
 60,201
 76 12,148
 60,201
 —
 —
20269,791
 45,773
 48 9,791
 45,773
 —
 —
20276,729
 29,901
 22 6,729
 29,901
 —
 —
20287,750
 50,779
 27 7,631
 47,292
 119
 3,487
2029 and Thereafter23,701
 125,112
 66 23,701
 125,112
 —
 —
Total Leased129,937
 $640,720
 931 129,774
 $636,684
 163
 $4,036
              
Total Portfolio Square Feet135,307
     135,096
   211
  
Percent Leased96.0%     96.1%   77.3%  
* Annualized rental revenue represents average annual base rental payments, on a straight-line basis for the term of each lease, from space leased to tenants at the end of the most recent reporting period. Annualized rental revenue excludes additional amounts paid by tenants as reimbursement for operating expenses.

Building Acquisitions
Our decision process in determining whether or not to acquire a property or portfolio of properties involves several factors, including expected rent growth, multiple yield metrics, property locations and expected demographic growth in each location, current occupancy of the properties, tenant profile and remaining terms of the in-place leases in the properties. We pursue both brokered and non-brokered acquisitions, and itIt is difficult to predict which markets may present acquisition opportunities that align with our strategy. Because of the numerous factors considered in our acquisition decisions, we do not establish specific target yields for future acquisitions.
We
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No buildings were acquired four buildings during the ninesix months ended SeptemberJune 30, 2019,2020, and ninesix buildings were acquired during the year ended December 31, 2018.2019. The following table summarizes the acquisition price, percent leased at time of acquisition and in-place yields by product type, for theseof industrial building acquisitions (in thousands, except percentage data):
Year-to-Date 2020 AcquisitionsFull Year 2019 Acquisitions
TypeAcquisition Price*In-Place Yield**Percent Leased at Acquisition Date***Acquisition Price*In-Place Yield**Percent Leased at Acquisition Date***
Industrial$—  — %— %$217,106  4.1 %88.4 %
* Includes fair value of real estate assets and net acquired lease-related intangible assets, including above or below market leases, but excludes other acquired working capital assets and liabilities.
** In-place yields of completed acquisitions are calculated as the current annualized net rental payments from space leased to tenants at the date of acquisition, divided by the acquisition price of the acquired real estate. Annualized net rental payments are comprised of base rental payments, excluding additional amounts payable by tenants as reimbursement for operating expenses, less current annualized operating expenses not recovered through tenant reimbursements.
*** Represents percentage of total square feet leased based on executed leases and without regard to whether the leases have commenced, at the date of acquisition.
 Year-to-Date 2019 Acquisitions Full Year 2018 Acquisitions
TypeAcquisition Price* In-Place Yield** Percent Leased at Acquisition Date*** Acquisition Price* In-Place Yield** Percent Leased at Acquisition Date***
Industrial$149,361
 3.9% 82.7% $352,617
 4.2% 100.0%
            
* Includes fair value of real estate assets and net acquired lease-related intangible assets, including above or below market leases, but excludes other acquired working capital assets and liabilities.
** In-place yields of completed acquisitions are calculated as the current annualized net rental payments from space leased to tenants at the date of acquisition, divided by the acquisition price of the acquired real estate. Annualized net rental payments are comprised of base rental payments, excluding additional amounts payable by tenants as reimbursement for operating expenses, less current annualized operating expenses not recovered through tenant reimbursements.
*** Represents percentage of total square feet leased based on executed leases and without regard to whether the leases have commenced, at the date of acquisition.


Building Dispositions
We regularly work to identify, consider and pursue opportunities to dispose of properties on an opportunistic basis and on a basis that is generally consistent with our strategic plans. Our ability to dispose of properties, from time to time, on favorable terms is a key performance indicator from the perspective of management, as a source of capital to fund future investment, and we believe that evaluating our disposition activity is also useful to investors.
We sold 27one consolidated buildingsbuilding during the ninesix months ended SeptemberJune 30, 20192020 and 1528 consolidated buildings during the year ended December 31, 2018.2019. The following table summarizes the sales prices, in-place yields and percent leased by product type, of these buildingsindustrial building dispositions (in thousands, except percentage data):
Year-to-Date 2020 DispositionsFull Year 2019 Dispositions
TypeSales PriceIn-Place Yield*Percent Leased**Sales PriceIn-Place Yield*Percent Leased**
Industrial$27,450  6.4 %100.0 %$425,767  5.6 %91.4 %
*   In-place yields of completed dispositions are calculated as annualized net operating income from space leased to tenants at the date of sale on a lease-up basis, including full rent from all executed leases, even if currently in a free rent period, divided by the sales price. Annualized net operating income is comprised of base rental payments, excluding reimbursement of operating expenses, less current annualized operating expenses not recovered through tenant reimbursements.
** Represents percentage of total square feet leased based on executed leases and without regard to whether the leases have commenced, at the date of sale.

 Year-to-Date 2019 Dispositions Full Year 2018 Dispositions
TypeSales Price In-Place Yield* Percent Leased** Sales Price In-Place Yield*��Percent Leased**
Industrial$371,067
 5.6% 89.9% $384,137
 5.8% 97.3%
Non-reportable Rental Operations—
 —% —% 121,077
 4.2% 80.1%
Total$371,067
 5.6% 89.9% $505,214
 5.4% 95.8%
            
*   In-place yields of completed dispositions are calculated as annualized net operating income from space leased to tenants at the date of sale on a lease-up basis, including full rent from all executed leases, even if currently in a free rent period, divided by the sales price. Annualized net operating income is comprised of base rental payments, excluding reimbursement of operating expenses, less current annualized operating expenses not recovered through tenant reimbursements.
** Represents percentage of total square feet leased based on executed leases and without regard to whether the leases have commenced, at the date of sale.
Development

We expect to generate future earnings from Rental Operations as development properties are placed in service and leased. Development activities, and our ability to lease those developments, are viewed by management as key indicators of future earnings growth and provide useful information to investors for the same reasons. At SeptemberJune 30, 2019,2020, we had 7.26.7 million square feet of property under development with total estimated costs upon completion of $933.8$856.8 million compared to 10.66.4 million square feet with total estimated costs upon completion of $893.1$835.0 million at SeptemberJune 30, 2018.2019. The square footage and estimated costs include both consolidated properties and unconsolidated joint venture development activity at 100%.
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The following table summarizes our properties under development at SeptemberJune 30, 20192020 (in thousands, except percentage data): 
Ownership Type
Square
Feet
 
Percent
Leased
 
Total
Estimated
Project Costs
 
Total
Incurred
to Date
 
Amount
Remaining
to be Spent
Ownership TypeSquare
Feet		Percent
Leased		Total
Estimated
Project Costs		Total
Incurred
to Date		Amount
Remaining
to be Spent
Consolidated properties7,023
 45% $925,607
 $448,789
 $476,818
Consolidated properties6,37263 %$835,787  $559,803  $275,984  
Unconsolidated joint venture properties133
 100% 8,181
 348
 7,833
Unconsolidated joint venture properties358100 %21,037  10,322  10,715  
Total7,156
 46% $933,788
 $449,137
 $484,651
Total6,73065 %$856,824  $570,125  $286,699  


Results of Operations
A summary of our operating results and property statistics is as follows (in thousands, except number of properties and per share or Common Unit data):
 Three Months Ended June 30,Six Months Ended June 30,
 2020201920202019
Rental and related revenue from continuing operations$226,374  $213,107  $445,129  $423,072  
General contractor and service fee revenue12,137  23,919  19,751  78,883  
Operating income76,361  99,161  135,818  161,442  
General Partner
Net income attributable to common shareholders$39,820  $71,053  $59,276  $115,604  
Weighted average common shares outstanding368,836  359,681  368,513  359,412  
Weighted average common shares and potential dilutive securities372,573  362,926  372,197  362,615  
Partnership
Net income attributable to common unitholders$40,176  $71,674  $59,802  $116,607  
Weighted average Common Units outstanding372,167  362,826  371,790  362,517  
Weighted average Common Units and potential dilutive securities372,573  362,926  372,197  362,615  
General Partner and Partnership
Basic income per common share or Common Unit:
Continuing operations$0.11  $0.20  $0.16  $0.32  
Diluted income per common share or Common Unit:
Continuing operations$0.11  $0.20  $0.16  $0.32  
Number of in-service consolidated properties at end of period468476468476
In-service consolidated square footage at end of period138,452138,715138,452138,715
Number of in-service unconsolidated joint venture properties at end of period39433943
In-service unconsolidated joint venture square footage at end of period11,10912,86711,10912,867


 Three Months Ended September 30, Nine Months Ended September 30,
 2019 2018 2019 2018
Rental and related revenue from continuing operations$215,374
 $196,912
 $638,446
 $582,461
General contractor and service fee revenue25,955
 34,986
 104,838
 94,552
Operating income248,402
 69,827
 409,844
 378,130
General Partner       
Net income attributable to common shareholders$226,566
 $53,025
 $342,170
 $319,833
Weighted average common shares outstanding362,416
 357,898
 360,424
 357,235
Weighted average common shares and potential dilutive securities367,271
 361,410
 365,343
 362,745
Partnership       
Net income attributable to common unitholders$228,534
 $53,520
 $345,141
 $322,835
Weighted average Common Units outstanding365,558
 361,200
 363,542
 360,585
Weighted average Common Units and potential dilutive securities367,271
 361,410
 365,343
 362,745
General Partner and Partnership       
Basic income per common share or Common Unit:       
Continuing operations$0.62
 $0.15
 $0.95
 $0.88
Discontinued operations$—
 $—
 $—
 $0.01
Diluted income per common share or Common Unit:       
Continuing operations$0.62
 $0.15
 $0.94
 $0.88
Discontinued operations$—
 $—
 $—
 $0.01
Number of in-service consolidated properties at end of period:457
 455
 457
 455
In-service consolidated square footage at end of period135,307
 130,734
 135,307
 130,734
Number of in-service unconsolidated joint venture properties at end of period40
 41
 40
 41
In-service unconsolidated joint venture square footage at end of period12,656
 11,583
 12,656
 11,583






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Supplemental Performance Measures
In addition to net income computed in accordance with GAAP, we assess and measure the overall operating results of the General Partner and the Partnership using certain non-GAAP supplemental performance measures, which include (i) Funds From Operations ("FFO"), (ii) PNOI and (iii) Same-Property Net Operating Income - Cash Basis ("SPNOI").
These non-GAAP metrics are commonly used by industry analysts and investors as supplemental operating performance measures of REITs and are viewed by management to be useful indicators of operating performance. Historical cost accounting for real estate assets in accordance with GAAP implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, many industry analysts and investors have considered presentation of operating results for real estate companies that use historical cost accounting to be insufficient by themselves. Management believes that the use of FFO, PNOI and SPNOI, combined with net income (which remains the primary GAAP measure of performance), improves the understanding of operating results of REITs among the investing public and makes comparisons of REIT operating results more meaningful.
The most comparable GAAP measure to FFO is net income (loss) attributable to common shareholders or common unitholders, while the most comparable GAAP measure to PNOI and SPNOI is income (loss) from continuing operations before income taxes.

FFO, PNOI and SPNOI each exclude expenses that materially impact our overall results of operations and, therefore, should not be considered as a substitute for net income (loss) attributable to common shareholders or common unitholders, income (loss) from continuing operations before income taxes, or any other measures derived in accordance with GAAP. Furthermore, these metrics may not be comparable to other similarly titled measures of other companies.
Funds From Operations
The National Association of Real Estate Investment Trusts ("NAREIT") created FFO as a non-GAAP supplemental measure of REIT operating performance. FFO, as defined by NAREIT, represents GAAP net income (loss), excluding gains or losses from sales of real estate assets (including real estate assets incidental to our business) and related taxes, gains and losses from change in control, impairment charges related to real estate assets (including real estate assets incidental to our business) plus certain non-cash items such as real estate asset depreciation and amortization, and after similar adjustments for unconsolidated partnerships and joint ventures. We calculate FFO in accordance with the definition that was adopted by the Board of Governors of NAREIT.
Management believes that the use of FFO as a performance measure enables investors and analysts to readily identify the operating results of the long-term assets that form the core of a REIT's activity and assists them in comparing these operating results between periods or between different companies that use the NAREIT definition of FFO.
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The following table shows a reconciliation of net income attributable to common shareholders or common unitholders to the calculation of FFO attributable to common shareholders or common unitholders (in thousands):
Three Months Ended September 30, Nine Months Ended September 30, Three Months Ended June 30,Six Months Ended June 30,
2019 2018 2019 2018 2020201920202019
Net income attributable to common shareholders of the General Partner$226,566
 $53,025
 $342,170
 $319,833
Net income attributable to common shareholders of the General Partner$39,820  $71,053  $59,276  $115,604  
Add back: Net income attributable to noncontrolling interests - common limited partnership interests in the Partnership1,968
 495
 2,971
 3,002
Add back: Net income attributable to noncontrolling interests - common limited partnership interests in the Partnership356  621  526  1,003  
Net income attributable to common unitholders of the Partnership228,534
 53,520
 345,141
 322,835
Net income attributable to common unitholders of the Partnership40,176  71,674  59,802  116,607  
Adjustments:       Adjustments:
Depreciation and amortization83,924
 78,855
 242,920
 232,216
Depreciation and amortization86,704  83,004  172,063  158,996  
Company share of unconsolidated joint venture depreciation, amortization and other adjustments2,858
 2,367
 7,628
 6,647
Company share of unconsolidated joint venture depreciation, amortization and other adjustments2,306  2,417  4,500  4,770  
Gain on sale of properties(173,758) (29) (204,441) (197,898)
Gains on sale of propertiesGains on sale of properties(23) (30,691) (9,008) (30,683) 
Gain on land sales(3,869) (3,915) (6,569) (7,221)Gain on land sales(6,070) (1,950) (6,205) (2,700) 
Impairment chargesImpairment charges—  —  5,626  —  
Income tax (benefit) expense triggered by sales of real estate assets(536) (897) 6,465
 9,495
Income tax (benefit) expense triggered by sales of real estate assets(150) 6,616  (210) 7,001  
Gains on sales of real estate assets - share of unconsolidated joint ventures(332) (2,008) (4,859) (8,186)Gains on sales of real estate assets - share of unconsolidated joint ventures334  (2,028) 308  (4,527) 
FFO attributable to common unitholders of the Partnership$136,821
 $127,893
 $386,285
 $357,888
FFO attributable to common unitholders of the Partnership$123,277  $129,042  $226,876  $249,464  
Additional General Partner Adjustments:       Additional General Partner Adjustments:
Net income attributable to noncontrolling interests - common limited partnership interests in the Partnership(1,968) (495) (2,971) (3,002)Net income attributable to noncontrolling interests - common limited partnership interests in the Partnership(356) (621) (526) (1,003) 
Noncontrolling interest share of adjustments788
 (680) (353) (326) Noncontrolling interest share of adjustments(744) (496) (1,474) (1,138) 
FFO attributable to common shareholders of the General Partner$135,641
 $126,718
 $382,961
 $354,560
FFO attributable to common shareholders of the General Partner$122,177  $127,925  $224,876  $247,323  

Property-Level Net Operating Income - Cash Basis
PNOI is comprised of rental revenues from continuing operations less rental expenses and real estate taxes from continuing operations, along with certain other adjusting items. As a performance metric that consists of only the cash-based revenues and expenses directly related to ongoing real estate rental operations, PNOI is narrower in scope than NAREIT FFO.

PNOI, as we calculate it, may not be directly comparable to similarly titled, but differently calculated, measures for other REITs. We believe that PNOI is another useful supplemental performance measure, as it is an input in many REIT valuation models and it provides a means by which to evaluate the performance of the properties within our Rental Operations segments. The operations of our industrial properties, as well as our non-reportable Rental Operations (our residual non-industrial properties that have not yet been sold, referred to throughout as "non-reportable"), are collectively referred to as "Rental Operations."
The major factors influencing PNOI are occupancy levels, acquisitions and sales, development properties that achieve stabilized operations, rental rate increases or decreases, and the recoverability of operating expenses.
Note 11 to the consolidated financial statements included in Part I, Item 1 of this Report shows a calculation of our PNOI for the three and ninesix months ended SeptemberJune 30, 20192020 and 20182019 and provides a reconciliation of PNOI for our Rental Operations segments to income from continuing operations before income taxes.
Same Property


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Same-Property Net Operating Income - Cash Basis
We also evaluate the performance of our properties, including our share of properties we jointly control, on a "same"same- property" basis, using a metric referred to as SPNOI. We view SPNOI as a useful supplemental performance measure because it improves comparability between periods by eliminating the effects of changes in the composition of our portfolio.
On an individual property basis, SPNOI is generally computed in a consistent manner as PNOI.
Effective January 1, 2018, weWe define our "same property""same-property" population once a year at the beginning of the current calendar year and include buildings that were stabilized (the term "stabilized" means properties that have reached 90% leased or that have been in-service for at least one year since development completion or acquisition) as of January 1 of the prior calendar year. The "same property""same-property" pool is also adjusted to remove properties that were sold subsequent to the beginning of the current calendar year. As such, the "same property""same-property" population for the period ended SeptemberJune 30, 20192020 includes all properties that we owned or jointly controlled at January 1, 2019,2020, which had both been owned or jointly controlled and had reached stabilization by January 1, 2018,2019, and have not been sold.
A reconciliation of income from continuing operations before income taxes to SPNOI is presented as follows (in thousands, except percentage data):
Three Months Ended September 30,Percent Nine Months Ended September 30,PercentThree Months Ended June 30,PercentSix Months Ended June 30,Percent
2019 2018Change 2019 2018Change20202019Change20202019Change
Income from continuing operations before income taxes$227,883
 $52,405

 $351,221
 $329,072
 Income from continuing operations before income taxes$40,047  $78,185  $59,599  $123,338  
Share of SPNOI from unconsolidated joint ventures4,277
 4,063
  12,696
 12,014
  Share of SPNOI from unconsolidated joint ventures4,677  4,542  9,319  8,986  
PNOI excluded from the "same property" population(25,717) (14,074)  (69,386) (33,762) 
PNOI excluded from the "same-property" population PNOI excluded from the "same-property" population(12,917) (8,305) (23,687) (13,937) 
Earnings from Service Operations(2,315) (1,256)  (5,423) (5,160)  Earnings from Service Operations(1,731) (730) (2,777) (3,108) 
Rental Operations revenues and expenses excluded from PNOI(11,563) (12,019)  (34,610) (43,259)  Rental Operations revenues and expenses excluded from PNOI(9,641) (12,316) (14,735) (25,336) 
Non-Segment Items(61,216) 98,638
  137,881
 115,021
  Non-Segment Items133,344  85,092  278,090  199,097  
SPNOI$131,349
 $127,757
2.8% $392,379
 $373,926
4.9%SPNOI$153,779  $146,468  5.0 %$305,809  $289,040  5.8 %
The composition of the line items titled "Rental Operations revenues and expenses excluded from PNOI" and "Non-Segment Items" from the table above are shown in greater detail in Note 11 to the consolidated financial statements included in Part I, Item 1 of this Report.


We believe that the factors that impact SPNOI are generally the same as those that impact PNOI. The following table details the number of properties, square feet, average commencement occupancy and average cash rental ratesrate for the properties included in SPNOI for the respective periods:
Three Months Ended June 30,Six Months Ended June 30,
2020201920202019
Number of properties455455455455
Square feet (in thousands) (1)127,744127,744127,744127,744
Average commencement occupancy percentage (2)98.6%98.2%98.5%97.9%
Average rental rate - cash basis (3)$4.80$4.66$4.78$4.64
(1) Includes the total square feet of the consolidated properties that are in the "same-property" population as well as 4.9 million square feet of space for unconsolidated joint ventures, which represents our ratable share of the 9.8 million total square feet of space for buildings owned by unconsolidated joint ventures that are in the "same-property" population.
(2) Commencement occupancy represents the percentage of total square feet where the leases have commenced.
(3) Represents the average annualized contractual rent per square foot for tenants in occupancy in properties in the "same-property" population. Cash rent does not include the tenant's obligation to pay property operating expenses and real estate taxes. If a tenant was within a free rent period, its rent would equal zero for purposes of this metric.

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 Three Months Ended September 30, Nine Months Ended September 30,
 2019 2018 2019 2018
Number of properties424 424 424 424
Square feet (in thousands) (1)115,893 115,893 115,893 115,893
Average commencement occupancy percentage (2)98.3% 98.9% 98.6% 98.3%
Average rental rate - cash basis (3)$4.56 $4.42 $4.53 $4.40
(1) Includes the total square feet of the consolidated properties that are in the "same property" population as well as 4.5 million square feet of space for unconsolidated joint ventures, which represents our ratable share of the 9.1 million total square feet of space for buildings owned by unconsolidated joint ventures that are in the "same property" population.
(2) Commencement occupancy represents the percentage of total square feet where the leases have commenced.
(3) Represents the average annualized contractual rent per square foot for tenants in occupancy in properties in the "same property" population. Cash rent does not include the tenant's obligation to pay property operating expenses and real estate taxes. If a tenant was within a free rent period, its rent would equal zero for purposes of this metric.

Comparison of Three Months Ended SeptemberJune 30, 20192020 to Three Months Ended SeptemberJune 30, 20182019
Rental and Related Revenue
The following table sets forth rental and related revenue from continuing and discontinued operations (in thousands): 
Three Months Ended September 30, Three Months Ended June 30,
2019 2018 20202019
Rental and related revenue:   Rental and related revenue:
Industrial$213,819
 $194,922
Industrial$224,472  $211,004  
Non-reportable Rental Operations and non-segment revenues1,555
 1,990
Non-reportable Rental Operations and non-segment revenues1,902  2,103  
Total rental and related revenue from continuing operations$215,374
 $196,912
Total rental and related revenue from continuing operations$226,374  $213,107  
Rental and related revenue from discontinued operations—
 85
Total rental and related revenue from continuing and discontinued operations$215,374
 $196,997
The primary reasons for the increase in rental and related revenue from continuing operations were:
•We acquired 13six properties and placed 3530 developments in service from January 1, 20182019 to SeptemberJune 30, 2019,2020, which provided incremental revenues from continuing operations of $16.7$12.7 million during the three months ended SeptemberJune 30, 2019,2020, as compared to the same period in 2018.2019.
•The increase in rental revenue included $4.0 million of higher expense recoveries primarily related to increased recoverable real estate taxes compared to the same period in 2019.
•Increases in rental rates and occupancy within our "same property""same-property" portfolio, as well as the lease up of properties that were placed in service prior to January 1, 20182019 but were not in the "same property""same-property" portfolio, also contributed to the increase to rental and related revenue from continuing operations.
•The sale of 4229 in-service properties since January 1, 2018,2019, which did not meet the criteria to be classified within discontinued operations, resulted in a decrease of $2.7$7.9 million to rental and related revenue from continuing operations in the three months ended SeptemberJune 30, 2019,2020, as compared to the same period in 2018,2019, which partially offset the aforementioned increases to rental and related revenue from continuing operations.

Rental Expenses and Real Estate Taxes
The following table sets forth rental expenses and real estate taxes from continuing operations (in thousands):
 Three Months Ended June 30,
 20202019
Rental expenses:
Industrial$17,017  $17,190  
Non-reportable Rental Operations and non-segment expenses540  407  
Total rental expenses from continuing operations$17,557  $17,597  
Real estate taxes:
Industrial$36,628  $32,220  
Non-reportable Rental Operations and non-segment expenses135  155  
Total real estate tax expense from continuing operations$36,763  $32,375  
 Three Months Ended September 30,
 2019 2018
Rental expenses:   
Industrial$18,928
 $15,692
Non-reportable Rental Operations and non-segment expenses230
 1,576
Total rental expenses from continuing operations$19,158
 $17,268
Real estate taxes:   
Industrial$31,503
 $30,681
Non-reportable Rental Operations and non-segment expenses236
 834
Total real estate tax expense from continuing operations$31,739
 $31,515


Rental expensesOverall, real estate tax expense from continuing operations increased by $1.9$4.4 million during the three months ended SeptemberJune 30, 2019,2020, compared to the same period in 2018.2019. The increase to rental expensesreal estate tax expense was primarilymainly due to higher real estate tax assessments in certain of our markets and the result of acquisitions and developments placed in service from January 1, 20182019 to SeptemberJune 30, 2019,2020. These increases were partially offset by the impact of property sales that did not meet the criteria to be classified within discontinued operations.

Real estate tax expense from continuing operations increased by $224,000 during the three months ended September 30, 2019, compared to the same period in 2018. The increase to real estate tax expense was mainly the result of acquisitions and developments placed in service from January 1, 2018 to September 30, 2019, partially offset by the impact of the adoption of ASC 842, for certain tenants that pay real estate taxes directly to taxing authorities, and the impact of property sales that did not meet the criteria to be classified within discontinued operations.
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Depreciation and Amortization
Depreciation and amortization expense from continuing operations was $83.9$86.7 million and $78.9$83.0 million for the three months ended SeptemberJune 30, 20192020 and 2018,2019, respectively. The increase in depreciation and amortization expense for the three months ended SeptemberJune 30, 20192020 was mainly the result of continued growth in our portfolio through development and acquisition.development.
Gain on Sale of Properties - Continuing Operations
The $173.6$30.6 million recognized as gain on sale of properties in continuing operations for the three months ended SeptemberJune 30, 2019 was primarily the result of the sale of 26 propertiesone property that did not meet the criteria for inclusion in discontinued operations.
There were no sales of consolidated propertiesbuilding dispositions during the three months ended SeptemberJune 30, 2018.
Non-Incremental Costs Related to Successful Leases
As the result of adoption of the new lease standard on January 1, 2019 (see Note 2 to the consolidated financial statements included in Part I, Item 1 of this Report), $1.1 million of non-incremental costs related to successful leases were expensed for the three months ended September 30, 2019. As we have adopted the standard on a prospective basis, there was no adjustment to non-incremental costs previously capitalized for the three months ended September 30, 2018.

2020.
General and Administrative Expenses
General and administrative expenses consist of two components. The first component includes general corporate expenses, and the second component represents the indirect operating costs not allocated to, or absorbed by, either the development, leasing and operation of our consolidated properties or our Service Operations. Such indirect operating costs are primarily comprised of employee compensation, including related costs such as benefits and wage-related taxes, but also include other ancillary costs such as travel and information technology support. Total indirect operating costs, prior to any allocation or absorption, and general corporate expenses are collectively referred to as our overall pool of overhead costs.
Those indirect costs not allocated to or absorbed by these operations are charged to general and administrative expenses. We regularly review our total overhead cost structure relative to our leasing, development and construction volume and adjust the level of total overhead, generally through changes in our level of staffing in various functional departments, as necessary, in order to control overall general and administrative expense.
General and administrative expenses were $13.7$13.6 million and $9.0$13.4 million for the three months ended SeptemberJune 30, 20192020 and 2018,2019, respectively. The following table sets forth the factors that led to the increased general and administrative expenses (in millions):
General and administrative expenses - three months ended September 30, 2018$9.0
  Decrease to overall pool of overhead costs(0.8)
  Decreased absorption of costs by consolidated leasing and development activities (1)5.8
  Increased allocation of costs to Service Operations and Rental Operations(0.3)
General and administrative expenses - three months ended September 30, 2019$13.7
General and administrative expenses - three months ended June 30, 2019$13.4 
   Decrease to overall pool of overhead costs(1.2)
   Overhead restructuring charges (1)2.1 
   Increased absorption of costs by consolidated leasing and development activities (2)(2.9)
   Decreased allocation of costs to Service Operations and Rental Operations2.2 
General and administrative expenses - three months ended June 30, 2020$13.6 
(1) We recognized $2.1 million of overhead restructuring charges, primarily related to benefits provided to certain associates that terminated employment as part of a voluntary retirement package offered to certain eligible employees during the three months ended June 30, 2020.
(2) We capitalized $900,000$1.4 million and $5.8$9.5 million of our total overhead costs to leasing and development, respectively, for consolidated properties during the three months ended SeptemberJune 30, 2019,2020, compared to capitalizing $1.8$2.6 million and $11.9$6.0 million of such costs, respectively, for the three months ended SeptemberJune 30, 2018.2019. Combined overhead costs capitalized to leasing and development totaled 22.5%33.8% and 44.8%25.6% of our overall pool of overhead costs for the three months ended SeptemberJune 30, 2020 and 2019, and 2018, respectively. The decrease inrespectively, with the higher percentage being attributable to increased development volume during the three months ended June 30, 2020. Additionally, $4.0 million of our total overhead costs, capitalized to leasing was primarily due to $1.1 million of previouslywhich were not capitalizable, internal costs that were immediately expensed due to the adoption of ASC 842 (see Note 2 to the consolidated financial statements included in Part I, Item 1 of this Report)recorded as expenses and presented separately in the line item "Non-Incremental Costs Related to Successful Leases" on the Consolidated Statements of Operations.Operations during the three months ended June 30, 2020, compared to $3.4 million of such expenses during the three months ended June 30, 2019.

35

Interest Expense
Interest expense allocable tofrom continuing operations was $22.6$22.8 million and $21.523.5 million for the three months ended SeptemberJune 30, 2020 and 2019, and 2018, respectively. The increaseAlthough our overall level of borrowings increased from 2019, as we financed growth in interest expense from continuing operations for the three months ended Septemberour portfolio, we have reduced our overall cost of borrowing through refinancing $766.3 million of higher rate unsecured notes since June 30, 2019 was primarily due to increased overall borrowings, partially offset by lower average interest rates.2019.
We capitalized $6.2$6.8 million and $6.5$6.2 million of interest costs for the three months ended SeptemberJune 30, 2020 and 2019, and 2018, respectively.
Discontinued Operations
The property-specific components of earnings that are classified as discontinued operations include rental revenues, rental expenses, real estate taxes, allocatedrespectively, which also contributed to the lower interest expense and depreciation expense, as well as the net gain or loss on the disposition of the properties.from continuing operations.
We had no buildings classified as discontinued operations forDebt Extinguishment
During the three months ended SeptemberJune 30, 20192020, we repurchased and 2018. The amounts classifiedcanceled $216.3 million of unsecured notes, which had a stated interest rate of 3.88% pursuant to a tender offer completed by the Partnership. We recognized a loss of $15.0 million in discontinued operations forconnection with the cancellation of these notes including the repayment premium and write-off of the deferred financing costs.
We did not repurchase any unsecured notes during the three months ended SeptemberJune 30, 2019 and 2018 were comprised of true-up activity related to properties sold in previous years that were classified as discontinued operations. 

2019.

Comparison of NineSix Months Ended SeptemberJune 30, 20192020 to NineSix Months Ended SeptemberJune 30, 20182019
Rental and Related Revenue
The following table sets forth rental and related revenue from continuing and discontinued operations (in thousands): 
Nine Months Ended September 30, Six Months Ended June 30,
2019 2018 20202019
Rental and related revenue:   Rental and related revenue:
Industrial$633,226
 $574,866
Industrial$441,424  $419,407  
Non-reportable Rental Operations and non-segment revenues5,220
 7,595
Non-reportable Rental Operations and non-segment revenues3,705  3,665  
Total rental and related revenue from continuing operations$638,446
 $582,461
Total rental and related revenue from continuing operations$445,129  $423,072  
Rental and related revenue from discontinued operations—
 117
Total rental and related revenue from continuing and discontinued operations$638,446
 $582,578
The following factors contributed to the increase in rental and related revenue from continuing operations:

•We acquired 13six properties and placed 3530 developments in service from January 1, 20182019 to SeptemberJune 30, 2019,2020, which provided incremental revenues from continuing operations of $49.7$25.7 million in the ninesix months ended SeptemberJune 30, 2019,2020, as compared to the same period in 2018.2019.

•Increased occupancy and rental rates within our "same property""same-property" portfolio, as well as the lease up of properties that were placed in service prior to January 1, 20182019 but were not in the "same property""same-property" portfolio, also contributed to the increase to rental and related revenue from continuing operations. Average commencement occupancy and

•The increase in rental ratesrevenue included $7.4 million of higher expense recoveries primarily related to increased recoverable real estate taxes compared to the same period in our "same property" portfolio both increased from the nine months ended September 30, 2018.2019.

•The sale of 4229 in-service properties, since January 1, 2018,2019, which did not meet the criteria for inclusion within discontinued operations, resulted in a decrease of $13.5$15.9 million to rental and related revenue from continuing operations in the ninesix months ended SeptemberJune 30, 2019,2020, as compared to the same period in 2018,2019, which partially offset the aforementioned increases to rental and related revenue from continuing operations.


36

•The increase in rental revenue was also partially offset by a $5.1 million increase in collectability reserves for contractual and straight-line receivables, primarily as a result of current economic conditions caused by the COVID-19 pandemic during the six months ended June 30, 2020.

Rental Expenses and Real Estate Taxes
The following table sets forth rental expenses and real estate taxes from continuing and discontinued operations (in thousands):
Nine Months Ended September 30, Six Months Ended June 30,
2019 2018 20202019
Rental expenses:   Rental expenses:
Industrial$56,339
 $49,675
Industrial$35,538  $37,411  
Non-reportable Rental Operations and non-segment expenses1,084
 3,883
Non-reportable Rental Operations and non-segment expenses862  854  
Total rental expenses from continuing operations$57,423
 $53,558
Total rental expenses from continuing operations$36,400  $38,265  
Rental expenses from discontinued operations—
 (8)
Total rental expenses from continuing and discontinued operations$57,423
 $53,550
Real estate taxes:   Real estate taxes:
Industrial$96,031
 $91,720
Industrial$72,867  $64,528  
Non-reportable Rental Operations and non-segment expenses525
 2,137
Non-reportable Rental Operations and non-segment expenses623  289  
Total real estate tax expense from continuing operations$96,556
 $93,857
Total real estate tax expense from continuing operations$73,490  $64,817  
Real estate tax expense from discontinued operations—
 17
Total real estate tax expense from continuing and discontinued operations$96,556
 $93,874
Overall, rental expenses from continuing operations increaseddecreased by $3.9$1.9 million in the ninesix months ended SeptemberJune 30, 2019,2020, compared to the same period in 2018.2019. The increasedecrease to rental expenses from continuing operations was primarily due to lower snow removal costs compared to the result of acquisitions and developments placedsame period in service from January 1, 2018 to September 30, 2019, partially offset by the impact of property sales that did not meet the criteria to be classified within discontinued operations.2019.
Overall, real estate tax expense from continuing operations increased by $2.7$8.7 million in the ninesix months ended SeptemberJune 30, 2019,2020, compared to the same period in 2018.2019. The increase to real estate tax expense was mainly the result of acquisitions and developments placed in service from January 1, 20182019 to SeptemberJune 30, 20192020 and increased real estate taxes levied by the related taxing authority. Thetax assessments in certain of our markets. These increases were partially offset by the impact of the adoption of ASC 842, for certain tenants that pay real estate taxes directly to taxing authorities, and the impact of property sales that did not meet the criteria to be classified within discontinued operations.
Depreciation and Amortization
Depreciation and amortization expense was $242.9$172.1 million and $232.2$159.0 million for the ninesix months ended SeptemberJune 30, 20192020 and 20182019, respectively. The increase in depreciation and amortization expense for the ninesix months ended SeptemberJune 30, 20192020 was mainly the result of continued growth in our portfolio through development and acquisition.development.
Equity in Earnings of Unconsolidated Joint Ventures
Equity in earnings of unconsolidated joint ventures represents our ownership share of net income from investments in unconsolidated joint ventures that generally own and operate rental properties. Equity in earnings from unconsolidated joint ventures was $12.6 million and $15.5 million for the nine months ended September 30, 2019 and 2018, respectively. The decrease in equity in earnings from unconsolidated joint ventures for the nine months ended September 30, 2019 was primarily due to the timing of property dispositions within certain of our unconsolidated joint ventures.

Gain on Sale of Properties - Continuing Operations
The $204.1$8.9 million recognized as gain on sale of properties in continuing operations for the ninesix months ended SeptemberJune 30, 20192020 was primarily the result of the sale of 27 propertiesone consolidated property that did not meet the criteria for inclusion in discontinued operations.

The $194.7$30.4 million recognized as gain on sale of properties in continuing operations for the ninesix months ended SeptemberJune 30, 20182019 was primarily comprised of the gains from the sale of 13 propertiesone property that did not meet the criteria for inclusion in discontinued operations.
Non-Incremental Costs RelatedImpairment Charges

During the six months ended June 30, 2020, we recognized $5.6 million of impairment charges related to Successful Leases
Aswriting off pre-acquisition costs, primarily non-refundable purchase deposits, for certain planned purchases of undeveloped land that we no longer anticipate completing due to the result of adoptioneconomic impact of the new lease standard on January 1, 2019 (see Note 2 COVID-19 pandemic.

to
We did not recognize any impairment charges during the consolidated financial statements included in Part I, Item 1 of this Report), $6.7 million of non-incremental costs related to successful leases were expensed for the ninesix months ended SeptemberJune 30, 2019. As we have adopted the standard on a prospective basis, there was no adjustment to non-incremental costs previously capitalized for the nine months ended September 30, 2018.
37

General and Administrative Expense
General and administrative expenses were $49.1$35.4 million and$43.4 million for both the ninesix months ended SeptemberJune 30, 20192020 and 2018, respectively.2019. The following table sets forth the factors that led to the increasedimpacted general and administrative expenses (in millions):
General and administrative expenses - nine months ended September 30, 2018$43.4
Decrease to overall pool of overhead costs(5.3)
Decreased absorption of costs by consolidated leasing and development activities (1)11.1
Increased allocation of costs to Service Operations and Rental Operations(0.1)
General and administrative expenses - nine months ended September 30, 2019$49.1
General and administrative expenses - six months ended June 30, 2019$35.4 
Decrease to overall pool of overhead costs(0.1)
Overhead restructuring charges (1)2.1 
Increased absorption of costs by consolidated leasing and development activities (2)(7.1)
Decreased allocation of costs to Service Operations and Rental Operations (3)5.1 
General and administrative expenses - six months ended June 30, 2020$35.4 
(1) We recognized approximately $2.1 million of overhead restructuring charges, primarily related to benefits provided to certain associates that terminated employment as part of a voluntary retirement package offered to certain eligible employees during the six months ended June 30, 2020.
(2) We capitalized $4.1$2.3 million and $16.8$18.2 million of our total overhead costs to leasing and development, respectively, for consolidated properties during the ninesix months ended SeptemberJune 30, 2019,2020, compared to capitalizing $14.9$3.3 million and $23.9$11.0 million of such costs, respectively, for the ninesix months ended SeptemberJune 30, 2018.2019. Combined overhead costs capitalized to leasing and development totaled 29.0%28.5% and 36.2%11.9% of our overall pool of overhead costs for the ninesix months ended SeptemberJune 30, 2020 and 2019, and 2018, respectively. The decrease inrespectively, with the higher percentage being attributable to increased development volume for the six months ended June 30, 2020. Additionally, $6.6 million of our total overhead costs, capitalized to leasing was primarily due to lower leasing activitywhich were not capitalizable, were recorded as well as $6.7 million of previously capitalizable internal costs that were immediately expensed due to the adoption of ASC 842 (see Note 2 to the consolidated financial statements included in Part I, Item 1 of this Report)expenses and presented separately in the line item "Non-Incremental Costs Related to Successful Leases" on the Consolidated Statements of Operations.Operations during the six months ended June 30, 2020, compared to $5.6 million of such expenses during the six months ended June 30, 2019.
(3) The decrease in allocation of costs to Service Operations and Rental Operations resulted from a lower volume of third-party construction projects during the six months ended June 30, 2020.
Interest Expense
Interest expense allocable to continuing operations was $68.2$46.3 million and $62.145.6 million for the ninesix months ended SeptemberJune 30, 20192020 and 2018,2019, respectively. The increase in interest expense from continuing operations for the ninesix months ended SeptemberJune 30, 20192020 was primarily due to increased overall borrowings, partially offset by lower average interest rates.
We capitalized $19.1$13.7 million and $21.812.9 million of interest costs during the ninesix months ended SeptemberJune 30, 20192020 and 2018,2019, respectively.
Discontinued OperationsDebt Extinguishment
During the six months ended June 30, 2020, we redeemed $300.0 million of unsecured notes with a stated interest rate of 4.38% and repurchased and canceled $216.3 million of unsecured notes with a stated interest rate of 3.88% pursuant to a tender offer completed by the Partnership. In connection with redemption and repurchase of these unsecured notes, we recognized a total loss of $32.8 million including the redemption/repayment premium and write-off of the deferred financing costs.
We had no buildings classified as discontinued operations fordid not redeem or repurchase any unsecured notes during the ninesix months ended SeptemberJune 30, 2019 and 2018. The amounts classified in discontinued operations for the nine months ended September 30, 2019 and 2018 were comprised of true-up activity related to properties sold in previous years that were classified as discontinued operations. 2019.


Liquidity and Capital Resources

Sources of Liquidity
We expect to meet our short-term liquidity requirements over the next 12 months, includingwhich include payments of dividends and distributions, completion of development projects that are currently under construction and the capital expenditures needed to maintain our current real estate assets, primarily through working capital, and net cash provided by operating activities.activities and short term borrowings on the Partnership's unsecured line of credit. We had $29.9 million of cash on hand and no outstanding borrowings on the Partnership's $1.20 billion unsecured line of credit had $121.2 million of cash on hand and held $119.2 million of restricted cash for future like kind exchange transactions at SeptemberJune 30, 2019.2020.
38


In addition to our existing sources of liquidity, we expect to meet long-term liquidity requirements, such as scheduled mortgage and unsecured debt maturities, property acquisitions, financing of development activities (and, to a lesser extent, acquisitions) and other capital improvements, through multiple sources of capital including operating cash flow, proceeds from property dispositions and accessing the public debt and equity markets. At September 30, 2019, we also held $110.0 million of notes receivable from the various entities that purchased our medical office properties in 2017, as part of the Medical Office Portfolio Disposition, which are scheduled to mature in January 2020.

Rental Operations

Cash flows from Rental Operations is our primary source of liquidity and provides a stable source of cash flow to fund operational expenses. We believe that this cash-based revenue stream is substantially aligned with revenue recognition (except for items such as periodic straight-line rental income accruals and amortization of above or below market rents) as cash receipts from the leasing of rental properties are generally received in advance of, or a short time following, the actual revenue recognition.

We are subject to a number of risks, which have intensified as the result of the COVID-19 outbreak, related to general economic conditions, including reduced occupancy, tenant defaults and bankruptcies and potential reduction in rental rates upon renewal or re-letting of properties, any of which would result in reduced cash flow from operations.

Unsecured Debt and Equity Securities

We use the Partnership's unsecured line of credit (which is guaranteed by the General Partner) as a temporary source of capital to fund development activities, acquire additional rental properties and provide working capital.

In August 2019,February 2020, a consolidated joint venture obtained an $18.4 million secured loan from a third party financial institution, with a fixed annual interest rate of 3.41% and a maturity date of March 1, 2035.

Also in February 2020, we issued $175.0$325.0 million of senior unsecured notes, which bear interest at a stated interest rate of 3.38%3.05%, have an effective interest rate of 2.80%3.19%, and mature on December 15, 2027,March 1, 2050, for grosscash proceeds of $182.3$316.4 million.

In June 2020, we issued $350.0 million of senior unsecured notes, which bear interest at a stated interest rate of 1.75%, have an effective interest rate of 1.85%, and mature on July 1, 2030, for cash proceeds of $346.8 million.

The Partnership has issued debt securities pursuant to certain indentures and related supplemental indentures, which also require us to comply with financial ratios and other covenants regarding our operations. We were in compliance with all such covenants, as well as applicable covenants under our unsecured line of credit, at SeptemberJune 30, 2019.2020.

The Partnership's unsecured line of credit has an interest rate that is indexed to LIBOR. In 2017, the Alternative Reference Rates Committee ("ARRC") proposed that the Secured Overnight Funding Rate ("SOFR") replace LIBOR. Also ARRC also proposed that the transition to SOFR from LIBOR take place by the end of 2021. As the Partnership's unsecured line of credit agreement has provisions that allow for automatic transition to a new rate, the Partnership has no other material debt arrangements that are indexed to LIBOR, and has settled all of our outstanding interest rate swaps will have matured by end ofin November 2019, we believe that the transition will not have a material impact on our consolidated financial statements.


39

At SeptemberJune 30, 2019,2020, we had on file with the SEC an automatic shelf registration statement on Form S-3 relating to the offer and sale, from time to time, of an indeterminate amount of debt and equity securities (including guarantees of the Partnership's debt securities by the General Partner). Equity securities are offered and sold by the General Partner, and the net proceeds of such offerings are contributed to the Partnership in exchange for additional General Partner Units or Preferred Units. From time to time, we expect to issue additional securities under this automatic shelf registration statement to fund the repayment of long-term debt upon maturity and for other general corporate purposes.

On August 1, 2019, theThe General Partner and the Partnership terminated the equity distribution agreement for thehas an ATM equity program with an aggregate offering price of upthat allows it to $200.0 million. On August 2, 2019, the General Partner and the Partnership entered into aissue new equity distribution agreement to sellcommon shares of the General Partner’s common stock,at $0.01 par value per share, from time to time, up towith an aggregate offering price of up to $400.0 million. During the ninethree months ended SeptemberJune 30, 2019,2020, the General Partner issued 1.82.0 million common shares pursuant tounder its previous ATM equity program, resulting in net proceeds of $56.3$70.6 million after paying total compensation of $568,000$714,000 to the applicable sales agents. DuringIncluding 8,700 shares issued during the ninethree months ended September 30, 2019,March 31, 2020, the General Partner also issued 4.8a total of 2.0 million common shares pursuant tounder its current ATM equity program for the six months ended June 30, 2020, resulting in net proceeds of $159.6$70.9 million after paying total compensation of $1.6 million$717,000 to the applicable sales agents. Other fees related to these issuances, totaling $283,000,$204,000, were also paid during the ninesix months ended SeptemberJune 30, 2019. These issuances resulted in net proceeds2020. As of $215.6June 30, 2020, the ATM equity program still had $118.9 million under both ATM programs during the nine months ended September 30, 2019.worth of new common shares available to issue.

Sale of Real Estate Assets
We regularly work to identify, consider and pursue opportunities to dispose of non-strategic properties on an opportunistic basis and on a basis that is generally consistent with our strategic plans. Our ability to dispose of such properties on favorable terms, or at all, is dependent upon a number of factors including the availability of credit to potential buyers to purchase properties at prices that we consider acceptable. Although we believe that we have demonstrated our ability to generate significant liquidity through the disposition of non-strategic properties, potential future adverse changes to general market and economic conditions, including the uncertain economic outlook caused by the COVID-19 pandemic, could negatively impact our further ability to dispose of such properties.
Sales of land and depreciable properties provided $379.8$34.5 million and $434.6$97.5 million in net proceeds during the ninesix months ended SeptemberJune 30, 20192020 and 2018,2019, respectively.
Transactions with Unconsolidated Joint Ventures
Transactions with unconsolidated joint ventures also provide a source of liquidity. From time to time we will sell properties to unconsolidated joint ventures, while retaining a continuing interest in that entity, and receive proceeds commensurate to those interests that we do not own. Additionally, unconsolidated joint ventures will from time to time obtain debt financing or sell properties and will then distribute to us, and our joint venture partners, all or a portion of the proceeds from such transactions. During the nine months ended September 30, 2019 and 2018, our share of sale and capital distributions from unconsolidated joint ventures totaled $2.7 million and $19.2 million, respectively.

Uses of Liquidity
Our principal uses of liquidity include the following:
•property investment;
•leasing/capital costs;
•dividends and distributions to shareholders and unitholders;
•long-term debt maturities;
•opportunistic repurchases of outstanding debt; and
•other contractual obligations.

40

Property Investment
Our overall strategy is to continue to increase our investment in quality industrial properties, primarily through development, on both a speculative and build-to-suit basis, supplemented with acquisitions in higher barrier markets with the highest growth potential. Pursuant to this strategy, we evaluate development and acquisition opportunities based upon our market outlook, including general economic conditions, supply and long-term growth potential. Our ability to make future property investments is dependent upon identifying suitable acquisition and development opportunities, and our continued access to our longer-term sources of liquidity, including issuances of debt or equity securities as well as generating cash flow by disposing of selected properties.

Leasing/Capital Costs
Tenant improvements and lease-related costs pertaining to our initial leasing of newly completed space, or vacant space in acquired properties, are referred to as first generation expenditures. Such first generation expenditures for tenant improvements are included within "development of real estate investments" in our Consolidated Statements of Cash Flows, while such expenditures for capitalizable lease-related costs are included within "other deferred leasing costs."
Cash expenditures related to the construction of a building's shell, as well as the associated site improvements, are also included within "development of real estate investments" in our Consolidated Statements of Cash Flows.
Tenant improvements and leasing costs to renew or re-let rental space that we previously leased to tenants for new second generation leases are referred to as second generation expenditures. Building improvements that are not specific to any tenant but serve to improve integral components of our real estate properties are also second generation expenditures. One of the principal uses of our liquidity is to fund the second generation leasing/capital expenditures of our real estate investments.
The following table summarizes our second generation capital expenditures by type of expenditure, as well as capital expenditures for the development of real estate investments and for other deferred leasing costs (in thousands):
Six Months Ended June 30,
 20202019
Second generation tenant improvements$7,975  $6,999  
Second generation leasing costs7,297  11,511  
Building improvements1,790  1,953  
Total second generation capital expenditures$17,062  $20,463  
Development of real estate investments$333,212  $205,315  
Other deferred leasing costs$17,306  $11,152  
 Nine Months Ended September 30,
 2019 2018
Second generation tenant improvements$9,837
 $13,213
Second generation leasing costs15,478
 18,411
Building improvements6,329
 2,687
Total second generation capital expenditures$31,644
 $34,311
Development of real estate investments$325,825
 $459,513
Other deferred leasing costs$28,551
 $27,691
The capital expenditures in the table above include the capitalization of internal overhead costs. We capitalized $4.1$2.3 million and $14.9$3.3 million of overhead costs relatedthat are incremental to leasing activities,executing leases, including both first and second generation leases, during the ninesix months ended SeptemberJune 30, 20192020 and 2018,2019, respectively. We capitalized $16.8$18.2 million and $23.9$11.0 million of overhead costs related to development activities, including both development and tenant improvement projects on first and second generation space, during the ninesix months ended SeptemberJune 30, 20192020 and 2018,2019, respectively. Combined overhead costs capitalized to leasing and development totaled 29.0%28.5% and 36.2%11.9% of our overall pool of overhead costs for the ninesix months ended SeptemberJune 30, 2020 and 2019, and 2018, respectively.The decrease in the overhead costs capitalized to leasing for the nine months ended September 30, 2019 was primarily due to lower leasing activity and the expense impact of internal costs related to successful leasing which was not capitalizable as a result of the adoption of the new lease standard on January 1, 2019 (see Note 2 to the consolidated financial statements included in Part I, Item 1 of this Report) and was included in the line item "Non-Incremental Costs Related to Successful Leases" on the Consolidated Statement of Operations and Comprehensive Income for the nine months ended September 30, 2019.


Further discussion of the capitalization of overhead costs can be found herein, in the quarter-to-quarter and year-to-year comparisons of general and administrative expenses of this Item 2 as well as in the Critical Accounting Policies section of Management's Discussion and Analysis of Financial Condition and Results of Operations in our 20182019 Annual Report.

41

In addition to the capitalization of overhead costs, the totals for development of real estate assets in the table above include the capitalization of $19.1$13.7 million and $21.8$12.9 million of interest costs during the ninesix months ended SeptemberJune 30, 20192020 and 2018,2019, respectively.
Both our first and second generation expenditures vary significantly between leases on a per square foot basis, dependent upon several factors including the product type, the nature of a tenant's operations, the specific physical characteristics of each individual property and the market in which the property is located.

Dividend and Distribution Requirements
The General Partner is required to meet the distribution requirements of the Code in order to maintain its REIT status. We paid regular dividends or distributions of $0.215$0.235 per common share or Common Unit in the first second and thirdsecond quarters of 2019,2020, and the General Partner's board of directors declared dividends or distributions of $0.235 per common share or Common Unit for the fourththird quarter of 2019.2020.
We expect to continue to distribute at least an amount equal to our taxable earnings, to meet the requirements to maintain the General Partner's REIT status, and additional amounts as determined by the General Partner's board of directors. Distributions are declared at the discretion of the General Partner's board of directors and are subject to actual cash available for distribution, our financial condition, capital requirements and such other factors as the General Partner's board of directors deems relevant.
Debt Maturities
Debt outstanding at SeptemberJune 30, 20192020 had a face value totaling $2.78$3.11 billion with a weighted average interest rate of 3.87%3.38% and maturities at various dates through 2028.2050. Of this total amount, we had $2.75$3.06 billion of unsecured debt, $35.0$50.6 million of secured debt and no outstanding borrowings on our unsecured line of credit at SeptemberJune 30, 2019.2020. Scheduled principal amortization, maturities and early repayments of such debt totaled $74.7$518.2 million for the ninesix months ended SeptemberJune 30, 2019.2020.
The following table is a summary of the scheduled future amortization and maturities of our indebtedness at SeptemberJune 30, 20192020 (in thousands, except percentage data):
Future Repayments   Future Repayments
Year
Scheduled
Amortization
 Maturities Total 
Weighted Average Interest Rate of
Future Repayments
YearScheduled
Amortization		MaturitiesTotalWeighted Average Interest Rate of
Future Repayments
Remainder of 2019$863
 $—
 $863
 5.98%
20203,883
 —
 3,883
 5.63%
Remainder of 2020Remainder of 2020$2,404  $—  $2,404  4.94 %
20213,416
 259,047
 262,463
 3.99%20214,003  9,047  13,050  5.49 %
20223,611
 600,000
 603,611
 4.20%20224,217  83,740  87,957  3.99 %
20233,817
 250,000
 253,817
 3.75%20234,444  250,000  254,444  3.75 %
20244,036
 300,000
 304,036
 3.92%20244,685  300,000  304,685  3.92 %
20253,938
 —
 3,938
 5.58%20254,610  —  4,610  5.15 %
20262,029
 375,000
 377,029
 3.37%20262,724  375,000  377,724  3.37 %
2027358
 475,000
 475,358
 3.18%20271,077  475,000  476,077  3.18 %
2028—
 500,000
 500,000
 4.45%2028744  500,000  500,744  4.45 %
20292029770  400,000  400,770  2.88 %
20302030797  350,000  350,797  1.86 %
Thereafter—
 —
 —
 N/A
Thereafter3,705  332,402  336,107  3.20 %
$25,951
 $2,759,047
 $2,784,998
 3.87%$34,180  $3,075,189  $3,109,369  3.38 %


We anticipate generating capital to fund our debt maturities by using undistributed cash generated from our Rental Operations and property dispositions and by raising additional capital from future debt or equity transactions.

On October 24, 2019, we redeemed $250.0 million of unsecured notes that were scheduled to mature in February 2021.
42

Repayments of Outstanding Debt

To the extent that it supports our overall capital strategy, we may purchase or redeem some of our outstanding unsecured notes prior to their stated maturities.

In March 2020, we redeemed $300.0 million of unsecured notes that were scheduled to mature in June 2022.
During
In June 2020, we repurchased and canceled $216.3 million of unsecured notes that were scheduled to mature in October 2022 pursuant to a tender offer completed by the nine months ended September 30, 2019, we repaid three fixed rate secured loans, totaling $41.7 million, which had a weighted average stated interest rate of 7.76%.Partnership.

Contractual Obligations

Aside from repayments of long-term debt and the issuance of the $175.0 millionissuances of senior unsecured notes described above, there have been no other material changes in our outstanding commitments since December 31, 2018,2019, as previously discussed in our 20182019 Annual Report.

Historical Cash Flows
Cash, cash equivalents and restricted cash were $250.5$58.6 million and $272.8$17.0 million at SeptemberJune 30, 20192020 and 2018,2019, respectively. The following table highlights significant changes in net cash associated with our operating, investing and financing activities (in millions): 
 Six Months Ended June 30,
 20202019
General Partner
Net cash provided by operating activities$261.2  $257.8  
Net cash used for investing activities$(334.0) $(331.7) 
Net cash provided by financing activities$10.0  $65.4  
Partnership
Net cash provided by operating activities$261.2  $257.8  
Net cash used for investing activities$(334.0) $(331.7) 
Net cash provided by financing activities$10.0  $65.4  
 Nine Months Ended September 30,
 2019 2018
General Partner   
Net cash provided by operating activities$404.1
 $371.6
Net cash used for investing activities$(243.8) $(329.6)
Net cash provided by financing activities$64.8
 $37.1
    
Partnership   
Net cash provided by operating activities$404.1
 $371.6
Net cash used for investing activities$(243.8) $(329.6)
Net cash provided by financing activities$64.8
 $37.1

Operating Activities

Cash flows from operating activities provide the cash necessary to meet our operational requirements and the receipt of rental income from Rental Operations continues to be our primary source of operating cash flows. The increase to net cash provided by operating activities, compared to the nine months ended September 30, 2018, was due to the timing of cash receipts on third party construction projects as well as increased cash flows from our Rental Operations.

Investing Activities

Highlights of significant cash sources and uses are as follows:
•During the ninesix months ended SeptemberJune 30, 2019,2020, we did not acquire any buildings. We paid cash of $146.6$108.2 million and $223.5for building acquisitions during the six months ended June 30, 2019. We paid cash of $95.9 million respectively, for real estate and undeveloped land acquisitions during the six months ended June 30, 2020, compared to $208.9$200.9 million and $194.2 million, respectively, for real estate and undeveloped land acquisitions induring the same period in 2018.2019.

•Real estate development costs were $325.8$333.2 million during the ninesix months ended SeptemberJune 30, 2019,2020, compared to $459.5$205.3 million forduring the same period in 2018.2019.
•Sales of land and depreciated properties provided $379.8$34.5 million in net proceeds forduring the ninesix months ended SeptemberJune 30, 2019,2020, compared to $434.6$97.5 million forduring the same period in 2018.2019.
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•During the ninesix months ended SeptemberJune 30, 2019,2020, we received repayments of $145.0$110.0 million on our notes receivable from property sales,related to the disposition of our medical office portfolio in 2017, compared to $149.9$130.0 million of repayments of notes receivable from property sales forduring the same period in 2018.2019.
•Second generation tenant improvements, leasing costs and building improvements totaled $31.6$17.1 million forduring the ninesix months ended SeptemberJune 30, 20192020 compared to $34.3$20.5 million for the same period in 2018.
For the nine months ended September 30, 2019, we received $2.7 million capital distributions from unconsolidated joint ventures, compared to $19.2 million received during the same period in 2018, primarily related to our share of distributions from the sale of properties owned by unconsolidated joint ventures.2019.
•For the ninesix months ended SeptemberJune 30, 2019,2020, we made capital contributions of $6.0$4.8 million to unconsolidated joint ventures, compared to $2.7$6.0 million during the same period in 2018.2019.
Financing Activities
The following items highlight significant capital transactions:
•
During the nine months ended September 30, 2019, the General Partner issued 6.6 million common shares pursuant to its ATM equity programs for net proceeds of $215.6 million, compared to 990,400 common shares for net proceeds of $28.4 million during the nine months ended September 30, 2018.
During the ninesix months ended SeptemberJune 30, 2019,2020, the Partnership repaid three secured loansGeneral Partner issued 2.0 million common shares pursuant to its ATM equity program for $41.7 million. The Partnership repaid three secured loansnet proceeds of $70.7 million, compared to 1.1 million common shares for $227.1net proceeds of $35.7 million during the same period in 2018.2019.
For•During the ninesix months ended SeptemberJune 30, 2019, we repaid $30.0 million of net borrowings on the Partnership's unsecured line of credit. There were no net borrowings or repayments on the Partnership's unsecured line of credit for the same period in 2018.
During the nine months ended September 30, 2019,2020, the Partnership issued $175.0$325.0 million of senior unsecured notes, which bear interest at a stated interest rate of 3.38%3.05%, have an effective interest rate of 2.8%3.19% and mature on December 15, 2027,March 1, 2050, for grosscash proceeds of $182.3$316.4 million. WeThe Partnership also issued $450.0$350.0 million of senior unsecured notes, which bear interest at a stated interest rate of 1.75%, have an effective interest rate of 1.85% and mature on July 1, 2030, for cash proceeds of $346.8 million. We did not issue any senior unsecured notes during the ninesame period in 2019.
•During the six months ended SeptemberJune 30, 2018.2020, the Partnership paid total cash of $547.0 million for the early redemption of $300.0 million of senior unsecured notes that were scheduled to mature in June 2022 and the early repurchase and cancellation of $216.3 million of senior unsecured notes due in October 2022. We did not repurchase or redeem any senior unsecured notes during the six months ended June 30, 2019.
•
•During the six months ended June 30, 2020, a consolidated joint venture of the Partnership obtained a secured loan from a third party financial institution for gross proceeds of $18.4 million. We did not obtain any secured loans during the same period in 2019.
•During the six months ended June 30, 2019, the Partnership repaid three secured loans for $41.7 million. We did not repay secured loans during the six months ended June 30, 2020.
•We increased borrowings on the Partnership's unsecured line of credit by $222.0 million during the six months ended June 30, 2019. For the six months ended June 30, 2020, we did not have any net borrowings on the unsecured line of credit.
•We paid regular cash dividends totaling $173.1 million and $154.6 million during the six months ended June 30, 2020 and 2019, respectively.
•$232.3 million and $214.5 million for the nine months ended September 30, 2019 and 2018, respectively.
Changes in book cash overdrafts are classified as financing activities within our Consolidated Statements of Cash Flows. Book cash overdrafts were $59.1$30.2 million at SeptemberJune 30, 2018.2019. We did not have any book cash overdrafts at SeptemberJune 30, 2019.
•
During the nine months ended September 30, 2019 we paid off a special assessment bond for $9.9 million which was reflected within Other Financing Activities on our Consolidated Statements of Cash Flows. We did not make similar significant repayments during the nine months ended2020.September 30, 2018.

•We paid off a special assessment bond for $9.9 million which was reflected within Other Financing Activities on our Consolidated Statements of Cash Flows during six months endedJune 30, 2019. We did not make similar significant repayments during the six months ended June 30, 2020.

Off Balance Sheet Arrangements - Investments in Unconsolidated Joint Ventures
We analyze our investments in unconsolidated joint ventures to determine if they meet the criteria for classification as a VIE and would require consolidation. We (i) evaluate the sufficiency of the total equity at risk, (ii) review the voting rights and decision-making authority of the equity investment holders as a group and whether there are limited partners (or similar owning entities) that lack substantive participating or kick out rights and (iii) establish whether or not activities within the venture are on behalf of an investor with disproportionately few voting rights in making this VIE determination. To the extent that we (i) are the sole entity that has the power to direct the activities of the VIE and (ii) have the obligation or rights to absorb the VIE's losses or receive its benefits, then we would be determined to be the primary beneficiary of the VIE and would consolidate it. At the end of each reporting period,

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we re-assess our conclusions as to which, if any, party within the VIE is considered the primary beneficiary. To the extent that our joint ventures do not qualify as VIEs, we further assess each joint venture partner's substantive participating rights to determine if the venture should be consolidated. There were no unconsolidated joint ventures that met the criteria to be a VIE at SeptemberJune 30, 2019.2020.
We have equity interests in unconsolidated partnerships and limited liability companies that primarily own and operate rental properties and hold land for development. These unconsolidated joint ventures are primarily engaged in the operation and development of industrial real estate properties. These investments provide us with increased market share and tenant and property diversification. The equity method of accounting is used for these investments in which we have the ability to exercise significant influence, but not control, over operating and financial policies. As a result, the assets and liabilities of these entities are not included on our balance sheet. Our investments in and advances to unconsolidated joint ventures represented approximately 1%2% of our total assets at SeptemberJune 30, 20192020 and December 31, 2018.2019. Total assets of our unconsolidated joint ventures were $486.1$421.6 million and $489.5$419.1 million at SeptemberJune 30, 20192020 and December 31, 2018,2019, respectively. The combined revenues of our unconsolidated joint ventures totaled $45.8$13.7 million and $45.2$30.0 million for the ninesix months ended SeptemberJune 30, 20192020 and 2018,2019, respectively.
We have guaranteed the repayment of certain secured and unsecured loans of our unconsolidated joint ventures. The outstanding balances on the guaranteed portion of these loans totaled $160.1$59.9 million and $110.9$150.8 million at SeptemberJune 30, 20192020 and 2018,2019, respectively.
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Item 3. Quantitative and Qualitative Disclosures About Market Risk
We are exposed to interest rate changes primarily as a result of our line of credit and our long-term borrowings. Our interest rate risk management objective is to limit the impact of interest rate changes on earnings and cash flows and to lower overall borrowing costs. To achieve our objectives, we borrow primarily at fixed rates and may enter into derivative financial instruments such as interest rate swaps, from time to time, in order to mitigate our interest rate risk.risk on a related financial instrument. We do not enter into derivative or interest rate transactions for speculative purposes.
Our interest rate risk is monitored using a variety of techniques. The table below provides information about our financial instruments that are sensitive to changes in interest rates, including long-term debt and interest rate swaps. For long-term debt, the table presents the principal amounts (in thousands) of the expected annual maturities, weighted average interest rates for the average debt outstanding in the specified period and fair values (in thousands). For interest rate swaps, the table presents notional amount and fair value (in thousands).
 Remainder of 2019 2020 2021 2022 2023 Thereafter Face Value Fair Value
Long-Term Debt:               
Fixed rate
secured debt
$863
 $3,583
 $12,163
 $3,311
 $3,517
 $9,661
 $33,098
 $35,723
Weighted average
interest rate
5.98% 5.98% 5.73% 6.06% 6.06% 6.07% 5.93%  
Variable rate
secured debt
$—
 $300
 $300
 $300
 $300
 $700
 $1,900
 $1,900
Weighted average
interest rate
N/A
 1.52% 1.52% 1.52% 1.52% 1.52% 1.52%  
Fixed rate
unsecured debt
$—
 $—
 $250,000
 $600,000
 $250,000
 $1,650,000
 $2,750,000
 $2,897,713
Weighted average
interest rate
N/A
 N/A
 3.91% 4.20% 3.72% 3.73% 3.85%  
Interest Rate Swaps:               
Fixed to variable$350,000
 $—
 $—
 $—
 $—
 $—
 $350,000
 $(42,104)


Following the end of the period covered by this Report, on October 24, 2019, we redeemed $250.0 million of unsecured notes that were scheduled to mature in February 2021.
Remainder of 20202021202220232024ThereafterFace ValueFair Value
Long-Term Debt:
Fixed rate
secured debt		$2,104  $12,750  $3,917  $4,144  $4,385  $21,429  $48,729  $41,591  
Weighted average
interest rate		5.63 %5.62 %5.65 %5.66 %5.67 %4.15 %4.98 %
Variable rate
secured debt		$300  $300  $300  $300  $300  $400  $1,900  $1,900  
Weighted average
interest rate		0.14 %0.14 %0.14 %0.14 %0.14 %0.14 %0.14 %
Fixed rate
unsecured debt		$—  $—  $83,740  $250,000  $300,000  $2,425,000  $3,058,740  $3,347,567  
Weighted average
interest rate		N/AN/A3.93 %3.72 %3.90 %3.23 %3.35 %
As the above table incorporates only those exposures that existed at SeptemberJune 30, 2019,2020, it does not consider those exposures or positions that could arise after that date. As a result, the ultimate impact of interest rate fluctuations will depend on future exposures that arise, our hedging strategies at that time, to the extent we are party to interest rate derivatives, and interest rates. Interest expense on our unsecured line of credit, to the extent we have outstanding borrowings, will be affected by fluctuations in the LIBOR indices or applicable replacement rates as well as changes in our credit rating. The interest rate at such point in the future as we may renew, extend or replace our unsecured line of credit will be heavily dependent upon the state of the credit environment.
As of September 30, 2019, we held an aggregate $350.0 million notional amount of five forward-starting interest rate swaps with a weighted average pay rate of 2.87% to hedge interest rates on an anticipated debt offering in late 2019. The fair value of these swaps was $42.1 million in a liability position at September 30, 2019.



Item 4. Controls and Procedures
Controls and Procedures (General Partner)
(a) Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. These disclosure controls and procedures are further designed to ensure that such information is accumulated and communicated to management, including the Chief Executive Officer and the Chief Financial Officer, to allow timely decisions regarding required disclosure.
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We carried out an evaluation, under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rules 13a-15 and 15d-15. Based upon the foregoing, the Chief Executive Officer and the Chief Financial Officer concluded that, as of the end of the period covered by this Report, our disclosure controls and procedures were effective.
(b) Changes in Internal Control over Financial Reporting
Other than as noted below, thereThere have been no changes in our internal control over financial reporting during the period covered by this Report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

In August 2019, the General Partner completed implementation of the first phase of a new enterprise resource planning (ERP) system, which is designed to replace certain internal financial and operating systems. In connection with the ERP implementation, in August 2019, we updated the processes and controls that comprise our internal control over financial reporting, as necessary, to accommodate related changes to our accounting procedures and business processes.

Controls and Procedures (Partnership)

(a) Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. These disclosure controls and procedures are further designed to ensure that such information is accumulated and communicated to management, including the General Partner's Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.
We carried out an evaluation, under the supervision and with the participation of management, including the General Partner's Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rules 13a-15 and 15d-15. Based upon the foregoing, the General Partner's Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this Report, our disclosure controls and procedures were effective.
(b) Changes in Internal Control over Financial Reporting
Other than as noted below, thereThere have been no changes in our internal control over financial reporting during the period covered by this Report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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In August 2019, the Partnership completed implementation of the first phase of a new enterprise resource planning (ERP) system, which is designed to replace certain internal financial and operating systems. In connection with the ERP implementation, in August 2019, we updated the processes and controls that comprise our internal control over financial reporting, as necessary, to accommodate related changes to our accounting procedures and business processes.



Part II - Other Information
 
Item 1. Legal Proceedings
From time to time, we are parties to a variety of legal proceedings and claims arising in the ordinary course of our businesses. While these matters generally are covered by insurance, there is no assurance that our insurance will cover any particular proceeding or claim. We are not subject to any material pending legal proceedings other than routine litigation arising in the ordinary course of business. We presently believe that all of the proceedings to which we were subject as of SeptemberJune 30, 2019,2020, taken as a whole, will not have a material adverse effect on our liquidity, business, financial condition or results of operations.
Item 1A. Risk Factors
In addition to the information set forth in this Report, you also should carefully review and consider the information contained in our other reports and periodic filings that we make with the SEC, including, without limitation, the information contained under the caption "Item 1A. Risk Factors" in our 20182019 Annual Report. The risks and uncertainties described in our 20182019 Annual Report are not the only risks that we face. Additional risks and uncertainties not currently known to us, or that we presently deem to be immaterial, also may materially adversely affect our business, financial condition and results of operations. There have not been any material changes to theSignificant additional risk factors that we face since our 20182019 Annual Report.Report are described below:
The full effects of the COVID-19 pandemic are highly uncertain and cannot be predicted.
An outbreak of COVID-19, a respiratory disease caused by a novel corona virus, has spread internationally, including in the United States where we operate. In March 2020, the World Health Organization declared the outbreak to be a pandemic, and the President of the United States declared it a national emergency. Globally, population movement and trade have been restricted to varying degrees. Within the United States, various state and local governmental authorities have issued stay-at-home orders, proclamations and/or directives aimed at minimizing the spread of COVID-19. Many of these measures have been scaled back using various phased re-opening plans but, due to surges in infections in several major geographic areas, some of these re-opening plans have been halted or have not proceeded according to their original schedules. We do not yet know the duration of the pandemic or all of its future effects, but it has already had negative effects on global health and the world economy.
The economic consequences of the COVID-19 pandemic have affected substantially all of our tenant base in various ways and with varying magnitudes. We have executed rent deferral agreements with certain of our tenants to assist them in maintaining viable operations through the pandemic. The total amount of rental payments deferred pursuant to these arrangements is slightly less than 1.0% of annualized gross rental revenues. The substantial majority of these deferral agreements have repayment terms of one year or less, which results in many of the deferred amounts having revised payment dates in the second half of 2020. Some of the tenants with whom we have entered into deferral arrangements may have received government assistance. We cannot predict the continued viability of the tenants with whom we've executed these agreements. There is a risk that they will default and the amounts deferred, along with future amounts due under the leases, will not ultimately be collectible.
As the result of current uncertain economic conditions, even tenants that are now in sound financial condition may be adversely affected over the longer term if the economic recession caused by the pandemic extends for a long period of time. These possible events could in turn disrupt, or further disrupt, our tenants' businesses and their ability to satisfy rental payments. Such a prolonged recession could also adversely impact our ability to lease vacant space.
We have not started any new speculative development projects since the beginning of the pandemic. Our ability to pursue further development opportunities will depend on future events, including the duration and severity of the pandemic, the length of time it takes for normal economic and operating conditions to resume, additional governmental actions that may be taken and/or extensions of time for restrictions that have been imposed to date, and numerous other uncertainties which we cannot predict at this time.
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A prolonged COVID-19 outbreak could negatively impact our operations and financial condition.
Should the major public health issues caused by the COVID-19 outbreak persist for an extended period of time, we could be adversely affected by actions limiting trade and population movement, the movement of goods through the supply chain, and other impacts to business and consumer demand that may diminish the demand and rents for our properties. To date, only an insignificant portion of our tenant base has declared bankruptcy as the result of the COVID-19 pandemic. In the event of the default or insolvency of a significant number of our tenants, we may experience a substantial loss of rental revenue and/or delays in collecting rent and incur substantial costs in enforcing our rights as landlord. If a tenant files for bankruptcy protection, a court could allow the tenant to reject and terminate its lease with us.
As a result, our financial condition, results of operations and distributable cash flow would be adversely affected if a significant number of our tenants became unable to meet their obligations to us, became insolvent or declared bankruptcy, and if we are unable to promptly renew the leases or relet the space, or if the rental rates upon such renewal or reletting are significantly lower than current rates.
Our stock price could be negatively impacted by COVID-19.
The COVID-19 outbreak has resulted in significant market volatility, including large swings in global stock prices that have adversely affected trade and global and local economies. These conditions may worsen in future periods and negatively impact our share price.
COVID-19 could adversely affect our ability to finance our operations.
The outbreak has also adversely impacted financial institutions which could, in future periods, negatively impact their willingness to extend credit or result in adverse changes to the terms at which credit is extended. The United States Federal Government has taken certain measures to support continued liquidity and availability of capital, but there is no guarantee that these measures will continue to be successful. These potential risks could negatively impact our future ability to access capital, which would negatively impact our liquidity and our ability to execute our strategic plans.
The ability of our employees to work may be adversely impacted by COVID-19.
Our workforce, including key employees, could be adversely impacted by the outbreak in future periods. Currently, some of our employees are working remotely and some are working on-site. The impacts of the outbreak could, among other things, negatively affect (i) the operation of our properties, (ii) the timeliness of our strategic decision making, (iii) the operation of an effective cyber security function, (iv) the operation of our key information systems, (v) our ability to make timely filings with the SEC and (vi) our ability to maintain an effective control environment.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

(a) Unregistered Sales of Equity Securities
None
(b) Use of Proceeds
None
(c) Issuer Purchases of Equity Securities
From time to time, we repurchase our securities under a repurchase program that initially was approved by the General Partner's board of directors and publicly announced in October 2001 (the "Repurchase Program").
On January 30, 2019,29, 2020, the General Partner's board of directors adopted a resolution that amended and restated the Repurchase Program and delegated authority to management to repurchase a maximum of $300.0 million of the
49

General Partner's common shares, $500.0$750.0 million of the Partnership's debt securities and $500.0 million of the General Partner's preferred shares, subject to the prior notification of the Chairman of the Finance Committeefinance committee of the board of directors of planned repurchases within these limits. We did not repurchase any equity securities through the Repurchase Program during the three months ended SeptemberJune 30, 2019.2020.

Item 3. Defaults upon Senior Securities

During the period covered by this Report, we did not default under the terms of any of our material indebtedness.

Item 4. Mine Safety Disclosures

Not applicable. 

Item 5. Other Information

During the period covered by this Report, there was no information required to be disclosed by us in a Current Report on Form 8-K that was not so reported, nor were there any material changes to the procedures by which our security holders may recommend nominees to the General Partner's board of directors.



Item 6. Exhibits
(a) Exhibits
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3.1 
3.1
3.2
Fifth Amended and Restated Bylaws of the General Partner (filed as Exhibit 3.1 to the General Partner's Current Report on Form 8-K as filed with the SEC on October 26, 2017, and incorporated herein by this reference).
3.3
3.4 (i)
3.4 (ii)
3.4 (iii)
3.4 (iv)
3.4 (v)
3.4 (vi)
10.14.1 
11.1
Statement Regarding Computation of Earnings.***
31.1
31.1 
31.2
31.3
31.4
32.1
32.2
32.3
32.4
101.Def
Definition Linkbase Document
101.Pre
Presentation Linkbase Document
101.Lab
Labels Linkbase Document
101.Cal
Calculation Linkbase Document
101.Sch
Schema Document
101.Ins
Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
104
Cover Page Interactive Data File (embedded within the Inline XBRL document and contained in Exhibit 101)



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*
*Filed herewith.
**The certifications attached as Exhibits 32.1, 32.2, 32.3 and 32.4 accompany this Quarterly Report on Form 10-Q and are "furnished" to the Securities and Exchange Commission pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed "filed" by the General Partner or the Partnership, respectively, for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

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***Data required by Financial Accounting Standards Board Auditing Standards Codification No. 260 is provided in Note 10 to the Consolidated Financial Statements included in this Report.


SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
DUKE REALTY CORPORATION
/s/ James B. Connor
James B. Connor
Chairman and Chief Executive Officer
/s/ Mark A. Denien
Mark A. Denien
Executive Vice President and Chief Financial Officer

DUKE REALTY LIMITED PARTNERSHIP
By: DUKE REALTY CORPORATION, its general partner
/s/ James B. Connor
James B. Connor
Chairman and Chief Executive Officer of the General Partner
/s/ Mark A. Denien
Mark A. Denien
Executive Vice President and Chief Financial Officer of the General Partner
Date:November 1, 2019July 31, 2020


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