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 for the past few quarters, Duke Realty finally posted impressive results in the fourth quarter. Aided by improved revenues and higher net operating income (NOI), Duke Realty's core FFO per share exceeded both year-ago quarter figure and the Zacks Consensus Estimate. The company's portfolio repositioning efforts are poised to strengthen its bulk industrial business in key markets and support its financials. Furthermore, the strong fundamentals of the healthcare sector position Duke Realty well for growth, going forward. However, the company faces stiff competition and its large development pipeline increases operational risks. Additionally, the demand for office space remains modest due to adequate space availability, which consequently exerts pressure on rent and occupancies. Furthermore, 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. that is 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 Dec 31, 2013, Duke Realty solely or jointly owned 754 industrial, office, medical office and other properties. Of the total assets, 730 (stretching around 146.5 million square feet) are in service properties and 24 assets (spanning about 6.1 million square feet) are under development. Also, through ownership interests in unconsolidated joint ventures, Duke Realty owns over 4,100 acres of land and controls more than 1,600 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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