Duke Realty Announces 4th Quarter, Revises Full Year 2020

INDIANAPOLIS, IN (STL.News) Duke Realty Corporation (NYSE: DRE, or the “Company”), the largest domestic-only logistics REIT, today announced significant development transactions since the start of the fourth quarter 2020.  As a result of this transaction activity, the Company has increased its full year guidance for 2020 development starts to a range of $775 to $850 million from the previous range of $650 to $800 million.

  • Executed two (2) leases in speculative development projects in the under construction pipeline, with scheduled project delivery dates not until the second quarter of 2021.  The following lease activity raises the pre-leasing level of the September 30th, 2020 under construction pipeline, to 76 percent, from the reported 63 percent level at the end of the third quarter period.
    – A 622,000 square foot lease in Northern New Jersey to a leading national home furnishings retailer seeking to expand its supply chain network, to take 100 percent of the space in the facility.
    – A 290,000 square foot lease in the Southern California South Bay sub-market to a major national beverage distributor, to take 100 percent of the space in the facility.
  • Started seven (7) development projects since the end of the third quarter, totaling $405 million that are 73 percent pre-leased in aggregate, comprised of:
    – Two (2) speculative developments totaling 649,000 square feet located in the Southern California Inland Empire West and San Gabriel Valley sub-markets.
    – Signed leases for five (5) build-to-suit development starts totaling 1.75 million square feet located in the Southern California, Northern California, Dallas, Columbus, and Indianapolis markets.  The leases were executed with existing customers in the e-commerce business, as well as a new customer in the global tire manufacturing and distribution business.

“As I indicated on our last earnings call, our build-to-suit prospect list, and the leasing prospects for our speculative developments in progress were looking very strong, so we’re pleased to announce this transaction activity,” said Jim Connor, Duke Realty chairman and CEO.  “The credit goes to our best-in-class regional operating teams for executing these significant transactions with both new and existing customers.  Even after these transactions we continue to have an active pipeline of build-to-suit prospects.  These leases and new developments will continue to drive strong earnings growth in 2021 and 2022 and make further progress in our strategic plan to grow in Tier 1 markets.”

“The announced transactions, including the year-to-date total as of September 30th, brings the Company’s total development starts for 2020 to 5.8 million square feet and a projected $780 million in total project costs, with an initial pre-leasing level of 64 percent,” Connor continued.  “With this increase in our development guidance, all of our metrics that were revised during the course of the year are now above our original 2020 guidance, which speaks volumes about the quality of our portfolio and the strength of our operating teams.”