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Duke Realty Grows Same Property NOI for Q4

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2018 was another outstanding year for Duke Realty. So said James Connor, chairman and CEO, during the firm’s Q4 earnings call. According to Connor, the REIT met or exceeded all of its 2018 goals, including its revised guidance throughout the year.

“We capped off the year with an excellent fourth quarter from an operational and financial perspective that sets us up for great 2019,” he explained. “We signed over 28 million square feet of leases, which is an all-time record for us. We improved in-service occupancy up 96.3%, which is up from 95.7% at year-end 2017, which is impressive when you consider we placed 4.5 million square feet of spec development in service during the year.”

He also noted that the company grew same property NOI at 4.3% and total industrial NOI at 15% over 2017. “We attained over 25% GAAP rent growth and 10% cash rent growth on second generation leases for the full year, respectively up from 19% and 7% growth from the previous full year.”

He explained that the company commenced $862 million in new development starts that were 57% pre-leased. “We completed $558 million of property dispositions and $353 million of acquisitions. We’ve refinanced $275 million of debt and reduced our overall borrowing costs by about 30 basis points. We grew FFO per share and AFFO on a share adjusted basis both by 7.3% and increased our regular quarter common dividend by 7.5%.”

Turning to some of the company’s leasing and development results for the fourth quarter, he said that the company had its strongest quarter of the year with 8.1 million square feet of leases executed. “We signed 21 leases in excess of 100,000 square feet, demonstrating the continued strong demand for mid-size and large spaces.”

He also touched on the company’s first generation spec leasing in the fourth quarter. “We placed four new projects in service late in the year, which increased our first generation space up to 2.5 million square feet, and our spec leasing was a little lighter in the fourth quarter.”


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