![]() RELIABLE. ANSWERS. Citi Global Property CEO Conference March 4-6, 2013 Exhibit 99.1 |
![]() RELIABLE. ANSWERS. 2013 Duke Realty Corporation 2 40 Years Timeline |
![]() RELIABLE. ANSWERS. 2013 Duke Realty Corporation 3 Three-Pronged Strategy for Success Strategies for delivering shareholder value |
![]() RELIABLE. ANSWERS. 2013 Duke Realty Corporation Exceptional Real Estate Brand Duke Realty a Leading Real Estate Investment Company since 1972 4 Over 40 years history as an industrial, owner, operator and developer; Over 25 years as a medical office developer Top 57 leaders with over 15 years average experience at Duke Realty; 33 leaders involved in corporate leadership (“LEAD”) program Top tier Corporate Governance¹ Ranked as “best” place to work in various cities across the country. Significant corporate initiatives focused on employee inclusion and acceptance as well as involvement and support in the community. Over 80% tenant renewal with over 3,000, high credit quality, diversified customers Top three class-A market share in a majority of our industrial markets with one of the highest quality portfolios 20 years as a public company . . delivered 6.4 % dividend yield on average and 10.0% average annual total shareholder return since 1993. 20.8% total shareholder return in 2012. (1) 2013 ISS “Quickscore” rank in top decile of the avg of S&P500 companies. Leading REIT research firm corporate governance metric places DRE in the 97 percentile on avg 2008 thru 2012. th |
![]() 2013 Duke Realty Corporation OPERATIONS STRATEGY 5 |
![]() 2013 Duke Realty Corporation Consistent Operating Performance Stabilized Occupancy (%) Strong historical stabilized occupancy – fundamentals improving Lease Renewals (%) Strong lease renewal percentages Stabilized occupancy In-service occupancy Leasing Activity New Leases and Renewals – Consistent Execution (in millions of square feet) Lease Maturity Schedule Lease maturities are well balanced with no one year accounting for more than 12% Demonstrated ability to maintain consistency through economic cycles 95% 92% 92% 89% 88% 91% 91% 89% 89% 87% 6 OPERATIONS STRATEGY 93% 93% 72% 79% 77% 69% 83% 21.4 22.7 25.9 24.5 29.3 |
![]() 2013 Duke Realty Corporation Notes 1. Based on simple average of calendar year-over-year annual same-property cash NOI growth. Five year analysis measures 2008 - 2012 2. Suburban Office Peers include BDN, CLI, HIW, OFC and LRY; weighted by historical market cap 3. Industrial includes DCT, EGP, FR, AMB and PLD; weighted by historical market cap 1.4% (0.3%) (0.8%) 2.5% 1.0% 2.0% (1.0%) 0.0% 1.0% 2.0% 3.0% 4.0% Suburban Office Peers Industrial Peers 5-Year Avg. 1-Year Avg. Annual Same-Store NOI Growth (1) Sources SNL and company filings Duke Realty Suburban Office Peers (2) Industrial Peers (3) Consistent NOI Growth Outperformance Relative Performance vs. Peers OPERATIONS STRATEGY 7 |
![]() 2013 Duke Realty Corporation 8 Positioned for NAV Growth KEY NAV GROWTH DRIVERS Lease up existing vacancy Increased management & service fees Accretive future development Accretive future acquisitions Portfolio occupancy of 92.4% Strong leasing pipeline Demonstrated track record of 69-83% renewal rate over past 6 years Should benefit from uptick in third party and JV partners development and construction activity Property management and leasing fees - should trend higher as occupancy improves Current pipeline 3.1MM SF of industrial, 0.8MM SF of medical office and 0.5MM SF of suburban office 2013 estimated development starts of $400 to $500 million Acquisitions focused on achieving asset repositioning goals Industrial and medical office assets Higher rental rate growth markets Increase Rents/ Reduced Capex Rent roll downs burning off and positive same property NOI performance Forecasts of industrial market wide average annual rent growth of 3.2% from 2013-16 Sources: Duke Realty. Rent forecasts per PPR and Green Street OPERATIONS STRATEGY |
![]() 2013 Duke Realty Corporation 9 Land and Development Capabilities OPERATIONS STRATEGY $540 million HELD FOR DEVELOPMENT Industrial Office Midwest 25.8 2.8 Indianapolis, Chicago, Cincinnati, Columbus, Minneapolis, and St. Louis major positions East 3.8 2.3 New Jersey, Baltimore, Washington D.C. and Raleigh Southeast 9.0 1.2 Atlanta, Central Florida, and South Florida Southwest 8.0 1.6 Phoenix, Dallas, Houston and Nashville Total 46.6 million SF 7.9 million SF Attractive positions contribute to future development and value Development – Amounts in million SF |
![]() 2013 Duke Realty Corporation Chicago Industrial • Yusen Logistics build-to-suit • O’Hare submarket on 26 acre brownfield redevelopment • 230,000 square feet • 12 year lease term • $21.3 million project • 12-year projected average yield of 7.0% Select 2012 Industrial Development Starts 10 Columbus Industrial • Restoration Hardware expansion for Eastern U.S. Distribution Operations • West Jefferson submarket on 19 acres of our land • 418,000 square feet, as an addition to existing 805,000 square feet • 15 year lease term • $15 million project • 15-year projected average yield of 8.1% OPERATIONS STRATEGY Southern California Industrial • Speculative development on Duke Realty land in Chino, CA • Inland Empire West submarket • 421,000 square feet • $26 million project • 5-year projected average yield of 7.0% Atlanta Industrial • Kuehne & Nagel build-to-suit on Duke Realty land at Camp Creek • South Atlanta submarket near Hartsfield Airport • 211,000 square feet • 10 year lease term • $15 million project • 10-year projected average yield of 8.3% • Regional distribution center build-to-suit in greater Seattle for internet retailer • 1,016,000 square feet • 15 year lease term • $105 million project • 15 year projected average yield of 7.6% Greater Seattle Bulk Industrial Delaware Industrial • Regional distribution center build-to- suit in Delaware for internet retailer • 1,015,000 square feet • 12 year lease term • $77 million project • 12-year projected average yield of 8.1% |
![]() 2013 Duke Realty Corporation 2013 YTD Development Starts 11 OPERATIONS STRATEGY Nashville Industrial • Regional distribution center build-to-suit for Starbucks • 680,000 square feet • 7.5 year lease term • $26 million project • Projected average yield of 7.7% Dallas Medical Office • Three Baylor Emergency (ER) facilities in Metro Dallas (cities of Rockwell, Murphy and Burleson) • 38,000 square feet each (114,000 total square feet) • $15 million project cost each ($45 million total) • 15 year term • Projected average yield of 9.4% Dallas Office • Build-to-suit on Duke Realty Land • 200,000 square feet • > 15 year lease term • ~$40 million project • Projected average yield of 8.7% |
![]() RELIABLE. ANSWERS. 2013 Duke Realty Corporation Development Strategic Advantages Development platform creates value 12 Duke Realty 40 years of experience in development Recognized as one of the leading commercial developers in each of our 18 markets Land bank in strategic locations that can support approximately 55 million square feet of development is a significant value advantage going forward Capital deployed in development can generate 75 to 150 basis points of premium yield over comparable acquisition yields Risk management policies in place to govern maximum development pipeline size and speculative development starts |
![]() 2013 Duke Realty Corporation ASSET STRATEGY 13 |
![]() 2013 Duke Realty Corporation 14 Track Record Proven ability to execute and allocate investments in alignment with our strategy Flex Disposition $1 Billion 2005 2006 Savannah Washington DC 2007 Healthcare 2009 Asset Strategy 2010 Dugan CBRERT Premier Suburban Office disposition $1 Billion 2011 2012 MOB and Industrial acquisitions $800 Million ASSET STRATEGY |
![]() 2013 Duke Realty Corporation 2012 2013 15 Asset Strategy BY PRODUCT 2009 BY GEOGRAPHY ASSET STRATEGY 2009 2013 Southeast 21% Southeast 30% 2012 Southeast 22% |
![]() 2013 Duke Realty Corporation 16 New, High Quality Portfolio with Long-term Leases ASSET STRATEGY Premier portfolio of assets Portfolio average Bulk Industrial Suburban Office Medical Office Property age 11.1 years 14.0 years 7.1 years Property size 229,000 SF 118,000 SF 79,000 SF Lease term 7.2 years 7.3 years 11.2 years Tenant size 79,000 SF 12,000 SF 9,000 SF |
![]() 2013 Duke Realty Corporation 17 Premier Quality Industrial Portfolio ASSET STRATEGY Industry leading focus on newer built, modern bulk warehouse type with strong performance characteristics <100,000 100,000-500,000 >500,000 % Total Square Feet 9% 54% 37% Building Square Footage (000's) 10,000 60,000 41,000 No. of Buildings 155 277 54 Average Tenant Size 19,000 76,000 385,000 Occupancy (12/31/12) 90.4% 94.2% 96.2% Building Size Portfolio Metric |
![]() 2013 Duke Realty Corporation Select Industrial Acquisitions in 2011 & 2012 18 Southern California Industrial Staples Distribution Center 497,620 SF, 100% leased Atlanta Industrial Hartman Business Center V 569,674 SF, 100% leased Columbus Industrial Creekside XIV & XXII 1,076,625 SF, 86% leased Chicago Industrial Crate & Barrel Distribution Center 827,268 SF, 100% leased Chicago Industrial 940 North Enterprise 257,542 SF, 100% leased Southern California Industrial Pacer International Distribution 323,000 SF, 100% leased Dallas Industrial Lakeside Ranch 749,000 SF, 100% leased Dallas Industrial Seefried Portfolio 329,000 SF, 100% leased Premier Portfolio Industrial Pompano, FL 1,163,000 SF, 90% leased ASSET STRATEGY Note: % leased figures represent status at time of acquisition Houston Industrial 801 Seaco Court 135,000 SF, 100% leased Chicago Industrial 335 Crossroads Parkway 288,000 SF, 0% leased Northern California Industrial Delicato Wines Distribution Center 552,000 SF, 100% leased Northern California Industrial ConAgra Western Distribution Center 727,000 SF, 100% leased |
![]() 2013 Duke Realty Corporation 19 MEDICAL OFFICE STRATEGY & Performance Update |
![]() 2013 Duke Realty Corporation 20 Healthcare Trends The nation’s largest industry • More than 17% of GDP; predicted to exceed 23% by 2020 • U.S. population 65+ expected to approach 90 million by 2050 • Aging population driving increase in healthcare expenditures MEDICAL OFFICE STRATEGY Annual Healthcare Expenditures Source: U.S. Bureau of the Census Population 65+ by Age: 1960-2050 Source: U.S. Bureau of the Census Growing healthcare expenditures and demographics should drive long term MOB demand |
![]() ![]() 2013 Duke Realty Corporation 21 Healthcare Trends Affordable Care Act • People insured expected to increase by 30 to 50 million – increased demand for care • Number of physicians will increase – growing MOB space demand • Patient care shifting to more cost-efficient MOB settings with higher acuity of services • Reduced reimbursements will make real estate efficiency a priority – larger deals and floor plates • Healthcare system consolidation and physician employment by hospitals escalating MEDICAL OFFICE STRATEGY Projected U.S. Residents with Insurance in 2021 Source: U.S. Bureau of the Census and U.S. Center for Disease Control and Prevention Inpatient and Outpatient Trends Source: Avalere Health, American Hospital Association Annual Survey, U.S. Census Bureau Inpatient Days Outpatient Visits Affordable Care Act should further improve trend for demand for lowest- cost setting outpatient facilities such as Medical Office |
![]() 2013 Duke Realty Corporation 22 35% 47% 18% In-Service Under Development Total Properties 69 10 79 Investment $ $1.2 B $240 M $1.4 B Square Feet 5.4 M 884 K 6.3 M Leased Occupancy 91% 100% 93% Local Regional National Portfolio investment by product type Portfolio investment by hospital system 19% 5% 76% MOB On-Campus MOB Off-Campus Specialty Hospital Medical Office Portfolio at December 31, 2012 MEDICAL OFFICE STRATEGY |
![]() 2013 Duke Realty Corporation 23 3% 4% 1% 5% 5% 10% 0% 2% 4% 6% 8% 10% 2013 2014 2015 2016 2017 2018 Lease Expirations (% of In-Service Sq. Ft.) High credit tenants and limited lease maturity result in stable and growing cash flow Top Health System Relationships Health System Credit Rating (Moody's) Rentable SF Ascension Health Aa1 510,000 Baylor Health Care System Aa2 450,000 Scott & White Healthcare A1 404,000 Harbin Clinic Unrated 313,000 Franciscan Alliance, Inc. Aa3 288,000 Health & Hospital Corp Marion County Aa1 274,000 Trinity Health Aa2 259,000 Catholic Health Initiatives Aa2 250,000 Veterans Administration Aaa 224,000 Northside Hospital Unrated 223,000 MEDICAL OFFICE STRATEGY |
![]() 2013 Duke Realty Corporation 24 14 19 26 35 61 0 10 20 30 40 50 60 70 2008 2009 2010 2011 2012 Medical office portfolio projected to exceed 15% of total asset base by 2013 NOI in $millions Annual NOI 88.0% 78.4% 85.8% 90.1% 91.3% 70% 75% 80% 85% 90% 95% 2008 2009 2010 2011 2012 In-Service Portfolio Occupancy As of 12/31/2012 Medical Office NOI and Portfolio Occupancy MEDICAL OFFICE STRATEGY |
![]() 2013 Duke Realty Corporation 25 Healthcare Development Pipeline MEDICAL OFFICE STRATEGY VA Tampa Tampa, FL 117,000 SF, 100% preleased Scott and White MOB Marble Falls, TX 67,000 SF, 100% preleased Wishard Health FOB Indianapolis, IN 275,000 SF, 100% preleased Scott & White MOB College Station, TX 119,000 SF, 100% preleased Tri Health Cardiology Cincinnati, OH 21,000 SF, 100% preleased Centerre Community Rehab Indianapolis, IN 60,000 SF, 100% preleased NSH Cherokee Towne Lake MOB Atlanta, GA 101,000 SF, 100% preleased Scott & White Bone and Joint Institute Temple, TX 78,000 SF, 100% preleased Baylor ED at Keller Keller, TX 38,000 SF, 100% preleased Bethesda Imaging/ED Expansion Cincinnati, OH 11,000 SF, 100% preleased |
![]() 2013 Duke Realty Corporation Goal: Grow Medical Office Primarily through Development Our Plan Existing healthcare assets $1.4 Billion New developments projected $200 Million in 2013 Lease-up space for growth – 92.5% leased at December 31, 2012 . . . projected to increase in 2013 26 MEDICAL OFFICE STRATEGY Our Focus On-campus assets Major hospital system relationships |
![]() 2013 Duke Realty Corporation Strategic Benefits to Duke Realty Medical office to provide solid NOI growth and lower volatility 27 • Reliable NOI growth with long term leases averaging over 11 years with very high tenant retention o Typical lease includes 2-3% annual rent escalators and expenses passed through • Strong credit tenants, with over 95% of the portfolio leased or affiliated with major hospital systems, a majority credit-rated single A or double AA • 76% of portfolio on-campus • The newest portfolio in REIT sector with an average age of 7 years • Total portfolio occupancy 92.5%, December 31, 2012. Projected to increase by December 2013 • Medical office development starts solid with approximately $200 million projected for 2013, majority 100% leased • Growth industry, defensive asset class MEDICAL OFFICE STRATEGY |
![]() 2013 Duke Realty Corporation CAPITAL STRATEGY AND 2013 GUIDANCE 28 |
![]() 2013 Duke Realty Corporation Capital Strategy Focus 29 Reducing leverage Increasing coverage ratios Maintaining size and quality of unencumbered asset base Executing portfolio repositioning in alignment with capital strategy objectives Further improve balance sheet strength and ratings CAPITAL STRATEGY 1 2 3 4 |
![]() 2013 Duke Realty Corporation 30 Key Metrics & Goals 2009 Actual 2010 Actual 2011 Actual Proforma 2012* Goal Debt to Gross Assets 44.5% 46.3% 46.8% 45.5% 45.0% Debt + Preferred to Gross Assets 54.9% 55.5% 55.6% 51.7% 50.0% Fixed Charge Coverage Ratio 1.79 : 1 1.79 : 1 1.82 : 1 1.81 : 1 2.00 : 1 Debt + Preferred/EBITDA 8.47 8.88 8.58 8.20 7.75 CAPITAL STRATEGY Progressing toward strategic plan goals *Proforma 2012 includes common equity offering January 2013. |
![]() RELIABLE. ANSWERS. 2013 Duke Realty Corporation Relative Performance of Duke Realty Notes 1. DRE stock price as of end of trading 2/27/13, @ $16.06 2. Total return for comparable companiescalculatedon a market cap weighted basis 3. Comparables include PLD, BDN, CLI, DCT, HIW, LRY, FR, OFC, and EGP; PLD and AMB are included historically; figures shown on a market cap weighted basis 31 |
![]() 2013 Duke Realty Corporation 32 CAPITAL STRATEGY Executing on capital strategy objectives CAPITAL SOURCE 2008 2009 2010 2011 2012 TOTAL Common Stock - $575 $311 - $241 $1,127 Preferred Stock $300 - - - - $300 Unsecured Debt $325 $500 $250 - $600 $1,675 Secured Debt - $270 - - - $270 Asset Dispositions $475 $300 $533 $1,650 $153 $3,111 TOTAL $1,100 $1,645 $1,094 $1,650 $994 $6,483 • Investment grade rated debt for over 15 years • Proven access to multiple capital sources • Available line of credit - $850 million capacity • Conservative AFFO payout ratio (81%) Continue to strengthen balance sheet ($ in millions) |
![]() 2013 Duke Realty Corporation Duke Realty 2012 Transactions Lowering Cost of Capital with Highly Efficient Bond Offering Executions 33 CAPITAL STRATEGY |
![]() 2013 Duke Realty Corporation January 10, 2013 34 Duke Realty $590MM Overnight Marketed Offering Source Morgan Stanley CAPITAL STRATEGY Summary of Deal Terms Post Over-Allotment Option Launch Date January9, 2013(Post-Close) Pricing Date January10, 2013(Pre-Open) Offer Price $14.25 % File/ Offer Discount -2.1% Days Trading 21.0x % of TSO 14.8% Shares Offered (Post-greenshoe) 41.4MM Amount Offered (Post-greenshoe) $590MM Bookrunners Morgan Stanley, USB Institutions 79% Other Retail 10% MS Retail 10% Allocation Breakdown By Investor Type (%) Real Estate 65% Hedge Fund 18% Index 8% Mutual Fund 5% Other 3% Value 1% Allocation Breakdown By Investor Style (%) • Duke Realty Corp. issued $590MM (post -greenshoe) of common equity via an overnight marketed offering to repay outstanding balance on revolving credit facility ($285MM) and redeem Series O Preferred shares callable in February 2013 • The offering priced at the tight end of the range at $14.25, which represents a file / offer discount of -2.1% – 2012 REIT overnight offerings priced at an average file / offer discount of -3.4% • This represents DRE’s largest follow -on offering ever • The company conducted 5 1x1 calls and a group call for investors at the time of the launch • The orderbook was oversubscribed by high -quality real estate investors with ~80% of the deal allocated to institutions and the remaining ~20% to retail investors – The offering was upsized a full 20% from 30MM shares to 36MM shares given a well oversubscribed orderbook • The offering traded up 3.5% on the first trade date |
![]() 2013 Duke Realty Corporation 35 Liquidity Position ($ in millions) CAPITAL STRATEGY Manageable debt maturities $667 $383 $559 $2,493 Debt Maturity and Amortization Schedule December 31, 2012 |
![]() RELIABLE. ANSWERS. 2013 Duke Realty Corporation 2013 Range of Estimates Metrics 2012 Actual Pessimistic Optimisti Key Assumptions Core FFO per share $1.02 $1.03 $1.11 - Continued improvement in operating fundamentals - Development projects - Growth in asset base from repositioning actitivies AFFO Payout Ratio 83% 83% 76% - Annual dividend maintained at $0.68 per share Average Occupancy - In-Service 92.2% 92.0% 94.0% - Positive momentum continued, although slower pace - Expirations only 9% of portfolio Same Property NOI Growth 2.5% 1.0% 4.0% - Occupancy growth slowing - Slightly improved rental rate assumptions Building Acquisitions $801 $300 $500 - Remain selective regarding property type and location in alignment with long-term strategy Building Dispositions $141 $400 $600 - Continue to prune remaining office and retail Land Sale Proceeds $12 $15 $25 - Selling identified non-strategic parcels - Demand still sluggish Development Starts $520 $400 $500 - Comprised of industrial and medical office - Substantially pre-leased Service Operations Income $22 $16 $24 - Consistent third party volumes anticipated General & Administrative expense $44 $43 $37 - Continued efficiency gains 2013 Range of Estimates $ in millions 36 |
![]() RELIABLE. ANSWERS 2013 Duke Realty Corporation 37 WHY DUKE REALTY? ¦ Quality portfolio improving with asset strategy ¦ Solid balance sheet improving with capital strategy ¦ Unmatched ability to execute on daily operations ¦ Development capabilities in place with existing land bank ¦ Talent and leadership depth to execute Delivering on what we say we will do |
![]() 2013 Duke Realty Corporation APPENDIX 38 |
![]() RELIABLE. ANSWERS. 2013 Duke Realty Corporation Strategic Focus 2012 Goals and Objectives 2012 Update • Lease-up portfolio, manage cap ex; reach positive same property income growth • Balance execution with capital strategy relative to level and quality of cash flow and same property NOI • Development starts of $ 150 to $250MM focus on medical office and build-to-suit • Total portfolio occupancy at year end 92.4%, up 1.7% from 2011; industrial portfolio at 93.8% • More than 29 million square feet of leases completed • Debt to EBITDA @ 7.0x¹; 2.5% Same Property NOI growth • $520MM development starts. Nine 77% pre-leased (on average) bulk industrial projects (at 7.2% weighted yield), nine 100% pre-leased medical office projects (7.1% yield) and one speculative office project (9%+ expected yield) • Continue strong momentum from 2011 on repositioning of portfolio • Pursue acquisitions of medical and industrial assets • Continue pruning suburban office primarily in Midwest • Closed on approximately $800MM of acquisitions during the year, weighted 66% healthcare and 34% industrial • $153MM in dispositions of non-core assets • Total suburban office portfolio 85.9% occupied, preparing non- strategic assets for sale • Opportunistically access capital markets . . push out maturity schedule further • Continue improving coverage ratios • Maintain minimal balance on line of credit • Fixed charge ratio of 1.81x, down from 1.82x at year end 2011 • Issued $322MM of equity through ATM program at a $14.19 share price • $285MM balance on credit facility at 12/31/12 • Issued $572MM of equity through a marketed follow-on offering at a $14.25 price in January 2013 to delever and fund growth Asset Strategy Operations Strategy Capital Strategy Solid 2012 performance across all three aspects of our strategy (1) Proforma $572 (net) common equity offering executed January 2013 39 |
![]() RELIABLE. ANSWERS. 2013 Duke Realty Corporation 40 U.S. Rail and Highway Logistics Routes & Corridors Duke Realty’s Primary Markets Strategically Placed in Key Distribution Corridors Note: Duke Realty Primary Industrial Markets in Bold Blue; Rail lines in medium blue, Interstate highway system in red lines |
![]() 2013 Duke Realty Corporation 41 Midwest Expansion - Industrial Restoration Hardware Columbus 418,655 SF Term 15 years Renewal & Expansion – Industrial McGraw-Hill Companies Columbus 668,000 SF Weighted Term 5.5 years MARKET OVERVIEW & KEY POINTS Committed to Midwest because we perform… Midwest remains a key component to our industrial strategy Renewal - Industrial Crossroads Centers Indianapolis 601,000 SF Term 5 years MIDWEST OVERVIEW Acquisition - Industrial 335 Crossroads Parkway Chicago 288,000 SF 66% leased Strong distribution base: Over 30% of U.S. population within one day’s drive 74 Fortune 500 headquarters High growth and return opportunities, particularly in Chicago, Columbus, and Indianapolis Duke Realty’s roots and a position of strength Original location – since 1972 Low basis product Dominant market position |
![]() 2013 Duke Realty Corporation 42 Midwest Overview Location Product Type Industrial Office Average Age 12.4 years 17.2 years Average Building Size 259,000 SF 126,000 SF Total Square Footage 57.7 million 12.3 million Current Occupancy 95.7% 83.8% Indianapolis 94.3% 92.3% Chicago 96.9% 90.2% Cincinnati 94.5% 84.6% St. Louis 93.6% 74.0% Columbus 100% 90.9% Minneapolis 93.7% 91.9% MIDWEST OVERVIEW |
![]() 2013 Duke Realty Corporation 43 Midwest Focus DOMINANT POSITION BULK INDUSTRIAL REDUCE OFFICE CONCENTRATION MIDWEST OVERVIEW Enhancing dominant industrial position in Midwest |
![]() 2013 Duke Realty Corporation EAST & SOUTHEAST OVERVIEW Performance Update 44 |
![]() 2013 Duke Realty Corporation RECENT TRANSACTIONS 45 East & Southeast Overview Disposition – Industrial CapTrust Tower Raleigh 300,00 SF Leased: 95% MARKET OVERVIEW & KEY POINTS New/Renewal - Office Liberty Center II Washington, D.C. Scitor Corp 159,000 SF Term: 10 years Renewal - Industrial Port City Logistics, Inc. Savannah 332,000 SF Term: 7 years Renewal – Industrial Ford Motor Company Orlando 275,000 SF 5 year term Strong presence East and Southeast cities among top growth markets in country… strong in-migration Diversified economies; Government, healthcare, finance and education Eastern cities maintained highest employment rate through downturn Atlanta and Northeast corridor strong in bulk industrial EAST & SOUTHEAST OVERVIEW |
![]() 2013 Duke Realty Corporation 46 East & Southeast Overview Location Product Type Industrial Office Average Age 10.0 years 10.8 years Average Building Size 169,000 SF 114,000 SF Total Square Footage 30.0 million 9.4 million Current Occupancy 91.3% 88.5% Atlanta 87.9% 86.5% South Florida 89.8% 87.4% Raleigh 98.7% 94.5% Washington D.C./Baltimore 96.0% 82.5% Central Florida 98.4% 88.9% Savannah 90.6% NA EAST & SOUTHEAST OVERVIEW |
![]() 2013 Duke Realty Corporation 47 East & Southeast Focus BULK INDUSTRIAL/PORTS LEASE UP AND RENT GROWTH ACQUISITIONS & DEVELOPMENT EAST & SOUTHEAST OVERVIEW Maximize assets and market position |
![]() 2013 Duke Realty Corporation 48 SOUTH & WEST OVERVIEW Performance Update |
![]() 2013 Duke Realty Corporation 49 South & West Acquisition – Industrial Northern California Delicato Wines 552,000 SF Leased: 100% Acquisition - Industrial Northern California ConAgra 727,000 SF Leased: 100% MARKET OVERVIEW & KEY POINTS New Lease - Industrial Greater Seattle Area Internet Retailer 1,016,000 SF Term: 15 years Acquisition – Industrial Houston, TX 135,000 SF Leased: 100% Duke Realty one of top 3 owner/developers in Dallas/Ft.Worth 52 Fortune 500 headquarters Demographic drivers: modern transportation and infrastructure, population and job growth Strong industrial demand expected post-recovery Port, inland port and logistics key for bulk distribution markets Expand industrial presence by pursuing select acquisition opportunities in Houston, Phoenix and Southern California SOUTH & WEST OVERVIEW |
![]() 2013 Duke Realty Corporation 50 South & West Overview Location Product Type Industrial Office Average Age 9.3 years 8.3 years Average Building Size 291,000 SF 110,000 SF Total Square Footage 26.8 million 1.8 million Current Occupancy 92.6% 86.6% Dallas 90.8% 100.0% Nashville 95.8% 93.3% Houston 100.0% 61.2% Phoenix 98.1% N/A Southern California 85.0% N/A SOUTH & WEST OVERVIEW San Antonio 3% Austin 7% Southern CA 13% Dallas 37% Seattle 7% Houston 11% Nashville 18% Phoenix 4% |
![]() 2013 Duke Realty Corporation 51 South & West Focus DALLAS LEASE-UP HOUSTON INDUSTRIAL PORT DALLAS INLAND PORT SOUTHERN CALIFORNIA EXPANSION SOUTH & WEST OVERVIEW Grow |
![]() RELIABLE. ANSWERS. 2013 Duke Realty Corporation 89.2% 88.3% 90.0% 89.9% 93.0% 87.2% 92.1% 95.1% 94.2% 89.0% 94.6% 80% 83% 86% 89% 92% 95% 98% LRY HIW OFC BDN CLI DRE EGP PLD FR DCT $7,753 $3,678 $3,226 $2,543 $5,053 $4,574 $4,727 $4,951 $10,134 $0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 LRY HIW CLI BDN OFC DRE PLD DCT FR EGP 57.2% 41.8% 41.8% 45.1% 44.1% 39.5% 38.0% 44.5% 40.7% 32.2% 0% 20% 40% 60% 80% BDN CLI OFC HIW LRY DRE PLD FR DCT EGP $32,480 Total Market Cap ($ in millions) Total Debt / Total Market Cap In Service Portfolio Occupancy Net Debt / LTM EBITDA Duke Realty Benchmarking Statistics Duke Realty benchmarks as the second largest by total market capitalization among its comps, with above average leverage and improving occupancy Office Average: $5,411 Industrial Average: $10,482 Industrial Average: 7.0x Office Average: 6.6x Office Average: 44.7% Industrial Average: 39.1% DRE total in service portfolio DRE industrial in service portfolio Industrial Average: 92.1% Office Average: 89.4% Key: Office: LRY=Liberty; CLI=Mack-Cali; HIW=Highwoods; BDN=Brandywine; OFC = Corporate Office Industrial: PLD=Prologis; FR=First Industrial; DCT=DCT Industrial Trust; EGP=Eastgroup Medical Office Building: HR=Healthcare Realty; HTA=Healthcare Trust of America Source: SNL Financial, 2/22/13 1 1 (1) DRE proforma January 2013 $572 million (net) equity offering. PLD proforma Norges and J-REIT transactions, as estimated by Green Street Advisors, February 2013. 52 7.6x 7.1x 7.1x 7.7x 6.6x 7.2x 6.4x 6.4x 5.7x 6.2x 0.0x 3.0x 6.0x 9.0x 12.0x BDN OFC LRY HIW CLI DRE DCT PLD EGP FR |
![]() RELIABLE. ANSWERS. 2013 Duke Realty Corporation Industrial Average: 18.9x Office Average: 12.4x 14.7x 13.9x 14.6x 23.2x 9.1x 13.3x 17.6x 10.8x 18.2x 16.8x 6.0x 10.0x 14.0x 18.0x 22.0x 26.0x LRY OFC HIW CLI BDN DRE PLD EGP FR DCT Industrial Average: 25.6x Industrial Average: 3.4% Office Average: 18.0x Office Average: 5.0% Office Average: 7.6% Price / 2013E FFO Implied Cap Rate (1) Dividend Yield Price / 2013E AFFO Key: Office: LRY=Liberty; CLI=Mack-Cali; HIW=Highwoods; BDN=Brandywine; OFC=Corporate Office Industrial: PLD=Prologis; FR=First Industrial; DCT=DCT Industrial Trust; EGP=Eastgroup Source: SNL Financial, 2/22/13 (1) Per Wall Street research as of 2/14/13 Duke Realty Valuation Statistics Duke Realty still undervalued by most levered and NAV metrics Industrial Average: 6.2% 20.2x 18.8x 18.8x 29.8x 25.1x 16.4x 24.1x 23.4x 18.3x 16.4x 10.0x 14.0x 18.0x 22.0x 26.0x 30.0x 34.0x LRY OFC HIW CLI BDN DRE PLD DCT FR EGP 9.1% 7.2% 7.3% 7.4% 7.4% 5.7% 5.7% 6.1% 6.9% 7.4% 4.0% 4.5% 5.0% 5.5% 6.0% 6.5% 7.0% 7.5% 8.0% 8.5% 9.0% 9.5% 10.0% CLI BDN OFC HIW LRY DRE FR DCT EGP PLD 6.5% 2.1% 3.7% 3.9% 4.3% 4.2% 2.8% 4.5% 4.7% 4.9% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% CLI LRY HIW BDN OFC DRE DCT EGP PLD FR 53 |
![]() RELIABLE. ANSWERS. 2013 Duke Realty Corporation Historical Barra Beta Analysis 2002-2013 Current (1) 1 Year Avg 5 Year Avg 10 Year Avg 12/31/11 DRE 1.19 1.28 1.55 1.16 1.49 Office Comps (2) 1.05 1.12 1.27 0.99 1.26 Industrial Comps (3)(4) 1.05 1.14 1.40 1.00 1.28 Healthcare Comps (5) 0.91 0.98 1.20 0.98 1.07 Notes 1. As of most recent Barra Beta published on January 31, 2013 2. Includes BDN, CUZ, CLI, CWH, HIW, LRY, OFC, PKY and WRE 3. Includes DCT, EGP, FR, LRY, and PLD 4. DCT’s beta only available since its IPO. Barra began tracking DCT’s beta in December 2006 5. Includes HCN, HCP, HR, HTA, and VTR Beta trends are slowly improving consistent with asset and capital strategy…. working on further lowering beta 54 Barra Beta Summary |
![]() RELIABLE. ANSWERS. 2013 Duke Realty Corporation Forward-Looking Statement This slide presentation contains statements that constitute “forward-looking statements” within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934 as amended by the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, among others, our statements regarding (1) strategic initiatives with respect to our assets, operations and capital and (2) the assumptions underlying our expectations. Prospective investors are cautioned that any such forward- looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements. A number of important factors could cause actual results to differ materially from those contemplated by forward-looking statements in this slide presentation. Many of these factors are beyond our ability to control or predict. Factors that could cause actual results to differ materially from those contemplated in this slide presentation include the factors set forth in our filings with the Securities and Exchange Commission, including our annual report on Form10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. We believe these forward-looking statements are reasonable, however, undue reliance should not be placed on any forward-looking statements, which are based on current expectations. We do not assume any obligation to update any forward-looking statements as a result of new information or future developments or otherwise. Certain of the financial measures appearing in this slide presentation are or may be considered to be non- GAAP financial measures. Management believes that these non-GAAP financial measures provide additional appropriate measures of our operating results. While we believe these non-GAAP financial measures are useful in evaluating our company, the information should be considered supplemental in nature and not a substitute for the information prepared in accordance with GAAP. We have provided for your reference supplemental financial disclosure for these measures, including the most directly comparable GAAP measure and an associated reconciliation in our most recent quarter supplemental report, which is available on our website at www.dukerealty.com. Our most recent quarter supplemental report also includes the information necessary to recalculate certain operational ratios and ratios of financial position. The calculation of these non-GAAP measures may differ from the methodology used by other REITs, and therefore, may not be comparable. 55 |