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Duke Realty's CEO Discusses Q2 2012 Results - Earnings Call Transcript

Now, for our prepared statement, I'll turn it over to Denny Oklak.



Dennis D. Oklak



Thank you, Ron. Good afternoon, everyone. Today, I will highlight some of our key accomplishments during the quarter in both our operational and asset strategies. Christie will then address our second quarter financial performance and progress on our capital strategy. Then, I'll finish up our prepared remarks with some comments about our outlook for the remainder of 2012.

By all accounts, the second quarter was a great success for Duke Realty and I'm very proud of our team for their accomplishments. We signed over 4.9 million square feet of leases in the second quarter and started development of $63 million of industrial projects and $65 million of medical office projects. All of our new development starts are 100% preleased with the exception of 431,000 square foot spec industrial start on our land in Chino, California. Our in-service occupancy percent increased slightly to 92.2%, while our overall portfolio occupancy was relatively flat at quarter end at 92.0%, really due to the speculative development start.

We made continued progress on our asset repositioning strategy with $103 million of acquisitions, comprised substantially of bulk industrial properties and disposed of $27 million of flex industrial, retail and land assets.

On the capital front, we issued $300 million of new unsecured debt at a company record low effective rate of 4.47%, lowering our cost of capital and reflecting an endorsement from the market on Duke Realty's improving credit strength. Christie will speak more in depth on our capital activities in just a moment.

From a macro perspective, halfway through the year, the economy is moving along at a relatively tepid 2% growth rate. Recent economic indicators have been mixed, with some of the manufacturing and freight data points slightly moving to the downside. Despite that, our overall leasing activity has held up well in both industrial and medical office.

Stock quotes in this article: DRE 

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