Duke Realty Corp. (DRE): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report

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Summary:
After posting in-line results in the past quarter, Duke Realty's second quarter 2014 core FFO per share came above both the Zacks Consensus Estimate and the prior-year quarter figure, aided by notable rise in revenues and occupancy growth. The company's focus on key markets and strong development platform positions it better to explore new growth opportunities. Also, its portfolio repositioning efforts to strengthen its bulk industrial business in key markets is encouraging given the improving fundamentals of the industrial market. In addition, the decent healthcare sector fundamentals positions Duke Realty well for growth. Yet, the company faces stiff competition and its large development pipeline increases operational risks. Additionally, the suburban office market remains weak, which consequently exerts pressure on rent and occupancies. Moreover, an expected rise in interest rates in the long term remains a matter of concern.

Overview:

Headquartered in Indiana, Duke Realty Corporation is a commercial real estate investment trust (REIT) in the U.S., engaged in owning, managing, and developing industrial, healthcare, and office properties across the nation. The company has four reportable segments. The first three consist of industrial, office and medical office real-estate investments. The office, medical and industrial segment operations, along with the retail and healthcare-based operations are collectively referred to as "Rental Operations" by the company. The fourth segment comprises several real estate services such as property management, asset management, maintenance, leasing, development, general contractor and construction management to third-party property owners and joint ventures. It is collectively referred to as "Service Operations."

As of Jun 30, 2014, Duke Realty solely or jointly owned 746 industrial, office, medical office and other properties. Of the total assets, 715 (stretching over 145.7 million square feet) are in-service properties and 31 assets (spanning around 10.8 million square feet) are under development. Also, through ownership interests in unconsolidated joint ventures, Duke Realty owns over 3,860 acres of land and controls more than 1,650 acres through purchase options.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



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