CEO Denny Oklak stated, "New development is once again off to a strong start for the year. We began 1.3 million square feet of projects that are 81 percent pre-leased and comprised of industrial, medical office and suburban office facilities across seven different projects and four markets. These development starts are a testament to the broad strength of our development and operations team to drive accretive future growth with appropriate risk and reward balance."
The first quarter included the following development activity:
•During the quarter, two industrial developments were started on owned land in existing Duke Realty distribution parks: a bulk industrial facility 100 percent pre-leased to Starbucks located in our 840 business park in Nashville, TN, totaling 680,000 square feet with a lease term of 7.5 years; and a 240,000 square foot, speculative bulk industrial facility in Houston, TX. We also started four 100 percent pre-leased medical office facilities totaling 148,000 square feet, located in Dallas, TX and Waco, TX, each with lease terms of 15 years to major hospital systems. Also during the quarter, a 100 percent pre-leased, 200,000 square foot suburban office project was started in Dallas, TX, also on Duke Realty land, leased for a term of 16 years to a healthcare services firm.
•Our wholly-owned development projects under construction on March 31, 2013, consists of twelve medical office projects totaling 750,000 square feet, six industrial projects totaling 2.8 million square feet and three office projects totaling 703,000 square feet. These projects were 93 percent pre-leased in the aggregate.
•During the quarter, two industrial facilities totaling 584,000 square feet that were on average 28 percent pre-leased were placed in service. A medical office expansion project, totaling 11,000 square feet and 100 percent pre-leased, was also placed in service.
Joint Venture Properties
•Our joint-venture-owned development projects under construction at March 31, 2013 consisted of one speculative industrial project totaling 600,000 square feet; and one medical office project 100 percent pre-leased totaling 274,000 square feet. These projects were 31 percent pre-leased in the aggregate.
Proceeds from dispositions totaled $223 million during the quarter and included the following strategic transactions:
•The sale of seventeen primarily suburban office buildings totaling over 3.3 million square feet from an existing joint venture, in which the company owns a twenty percent interest, to our partner;
•A suburban office facility totaling 300,000 square feet in Raleigh, NC, from an existing joint venture, in which the company owned a fifty percent interest;
•A flex-type office building totaling 144,000 square feet in Raleigh, NC;
•Two non-strategic medical office facilities totaling 156,000 square feet located in Abilene, TX and Ruston, LA;
•A three building, flex-industrial portfolio totaling 180,000 square feet in Cincinnati, OH.
Post Quarter Real Estate Investment Activity
In April, the company entered into a definitive agreement to sell a retail shopping center for $188 million in accordance with its strategy to dispose of its remaining retail assets. The high quality, lifestyle retail center is located in Pembroke Pines, FL and comprises 391,000 square feet that is currently 90% leased. Closing of the transaction is subject to customary closing conditions and is expected to occur at the end of April 2013.
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