EX-99.1 2 a06-23954_2ex99d1.htm EX-99.1

Exhibit 99.1

 

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November 2006

 


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Safe Harbor Certain statements contained in this presentation constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended. The words “believe,” “estimate,” “expect,” “anticipate,” “intend,” “plan,” “seek” and similar expressions or statements regarding future periods are intended to identify forward-looking statements. These forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements, or industry results, to differ materially from any predictions of future results, performance or achievements that Duke Realty Corporation or Duke Realty Limited Partnership express or imply in this presentation. Information regarding risk factors that may affect Duke Realty Corporation or Duke Realty Limited Partnership is included under the caption “Risk Factors” in the Annual Reports on Form 10-K for the fiscal year ended December 31, 2005 that have been filed with the SEC. This information is updated from time to time in subsequent Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other filings with the SEC. Neither Duke Realty Corporation nor Duke Realty Limited Partnership has or undertakes any obligation to update or revise any forward-looking statements for events or circumstances that arise after the statement is made.

 


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Agenda Company Overview Property Information 2006 Objective Update Guidance and Investment Thesis

 


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Company Overview

 


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Duke Business Strategy National development and construction capabilities in office, industrial, retail and medical office projects Key land positions in major U.S. markets with start-to-finish integrated multi-product development expertise Market expansion into major growth markets Local talent to execute national vision for growth Utilize joint ventures to expand operating platforms and market share while generating higher operating fees and increasing return on equity

 


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Financial Highlights – September 30, 2006 FFO per share of $0.65, a 6.6% increase over 2005 FAD per share of $0.52, resulting in a 91.4% FAD payout ratio Stabilized in-service occupancy of 94.5% Same property NOI increased 6.5% Value creation pipeline totaled $1.3 billion New development starts of $430 million $130 million of held for rental projects $300 million of held for sale projects, including $128 million of retail lifestyle centers

 


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Property Information

 


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13% 12% 10% 3% 3% 3% 10% 4% 4% 8% 9% 6% Geographically Diverse Operating Platform 2% 4% 8% 1% % of total Company annualized net effective rent

 


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Stabilized In Service Properties – September 30, 2006 Occupancy %Service Center/Bulk DistributionSuburban OfficeOtherOverallPrimary MarketChicago93.1%90.9%99.1%92.5%Dallas97.4%100.0%98.3%97.5%Minneapolis95.2%90.2%85.9%93.7%St. Louis95.7%92.3%94.8%93.9%Chicago Region95.5%91.7%94.8%94.4%Cincinnati98.7%91.5%96.1%96.2%Cleveland-84.7%-84.7%Columbus99.3%92.3%-95.8%Indianapolis95.3%93.8%90.2%94.7%Nashville94.6%88.5%96.5%93.0%Other100.0%--100.0%Mid-East Region96.7%91.0%92.6%94.8%Atlanta89.6%86.6%100.0%88.6%Central Florida100.0%94.6%-98.2%Savannah100.0%--100.0%South Florida-96.8%-96.8%Southeast Region94.9%89.6%100.0%93.4%Raleigh100.0%96.8%85.9%96.5%Washington DC100.0%94.5%-95.7%Mid-Atlantic Region100.0%95.6%85.9%96.2%Grand Total96.1%91.5%92.8%94.5%Note: Excludes buildings that are in the held for sale portfolio.

 


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Stabilized In Service Properties – September 30, 2006 Square Feet in ThousandsService Center/Bulk DistributionSuburban OfficeOtherOverallPrimary MarketChicago5,4002,9002008,500Dallas6,8001005007,400Minneapolis3,2008002004,200St. Louis2,7003,5001,2007,400Central Region18,1007,3002,10027,500Cincinnati8,8004,70080014,300Cleveland-2,200-2,200Columbus3,5003,500-7,000Indianapolis17,0003,0001,60021,600Nashville1,8008002002,800Other400--400Mid-East Region31,50014,2002,60048,300Atlanta7,2003,9003011,130Central Florida2,3001,200-3,500Savannah5,100--5,100South Florida-700-700Southeast Region14,6005,8003020,430Raleigh1,5002,0006004,100Washington DC7002,300-3,000Mid-Atlantic Region2,2004,3006007,100Grand Total66,40031,6005,330103,330Note: Excludes buildings that are in the held for sale portfolio.

 


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Development Starts ProjectTotal ProjectStabilizedCurrentSquare FeetCostsReturnOcc %Held for Rental20023,352,000173,424,00010.1%93%20032,117,00078,255,00010.5%100%20044,748,000192,656,0009.7%96%20057,112,000398,322,0009.6%60%2006 YTD4,388,000325,585,0009.3%14%Held for Sale2002444,00046,087,00010.3%100%2003545,00050,142,00010.3%100%20041,228,00065,676,0009.5%96%20053,293,000337,130,0008.8%92%2006 YTD4,755,000476,531,0008.6%45%Total20023,796,000219,511,00010.2%93%20032,662,000128,397,00010.4%100%20045,976,000258,332,0009.7%96%200510,405,000735,452,0009.2%70%2006 YTD9,143,000802,116,0008.9%30%

 


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Held for Rental Developments – Placed in Service SquareCurrent %ProjectStabilizedFeetLeasedCostsReturnTotal 20043,831,000100% $148,297,0009.6% 2005:1st Quarter1,567,00097% 45,226,000$ 10.1% 2nd Quarter978,00092% 40,790,0009.5% 3rd Quarter353,00097% 19,048,00010.6% 4th Quarter1,399,00077% 80,802,0009.8% Total 20054,297,00089% 185,866,000$ 9.9% 2006:1st Quarter430,00038% 32,690,000$ 9.7% 2nd Quarter2,512,00054% 110,262,0009.6% 3rd Quarter1,458,00057% 88,609,0009.2% Total 2006 YTD4,400,00054% 231,561,000$ 9.5%

 


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Value Creation Pipeline Analysis (Dollars and square feet in thousands) TotalPipelineTotalStabilizedTotalStabilizedFeeAs ofSq FtCostReturnSq FtCostReturnBacklog%Volume12/31/931,24950,341$ 10.9%--$ -16,969$ 9.4%67,310$ 12/31/942,362110,97511.9%---12,68015.5%123,65512/31/953,448168,60011.3%---61,6176.9%230,21712/31/963,801141,78111.6%---46,1976.8%187,97812/31/975,243268,81311.3%---30,5327.8%299,34512/31/986,217415,34811.4%1,02376,24210.7%83,57214.6%575,16212/31/998,438611,45311.4%1,671124,59810.9%32,29412.1%768,34512/31/004,136253,16811.6%4,213293,94611.6%77,89417.9%625,00812/31/013,457214,01710.9%3,436238,66711.7%67,0169.9%519,69912/31/022,565141,88910.4%75080,27310.8%113,42911.1%335,59012/31/032,10394,46710.1%76171,3819.7%175,5597.8%341,40712/31/043,244160,05110.2%1,33665,7388.6%182,6089.3%408,39712/31/056,808389,6639.6%2,229290,5728.9%114,98510.0%795,2203/31/066,832387,5799.4%3,557393,7978.9%86,6339.9%868,0096/30/066,265401,9999.4%4,746524,3188.8%76,04010.3%1,002,3579/30/065,826448,5899.4%7,945797,2948.7%54,0239.8%1,299,906Held For RentalHeld For SaleConstructionPropertiesPropertiesThird Party

 


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Tenant Industry Profile Tenant Industry Profile as a Percentage of Annualized Gross Effective RentCommunication & Equipment7%Distribution, Printing and Industrial Products17%Food & Kindred Products3%Computer & Data Processing Services4%Electronics, Computer Services/Equipment7%Electronic & Other Electric Equipment3%Healthcare Services9%Trucking & Warehousing5%Printing & Publishing2%Security & Commodity Brokers2%Business Services22%Engineering & Management Services 3%Real Estate4%Insurance Carriers6%Computer Hardware Development2%Government/Other4%

 


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Lease Expiration Schedule – September 30, 2006 WHOLLY OWNED ANDJOINT VENTURE PORTFOLIO:YEAR OF EXPIRATIONSq. Ft.%$%20061,9671%10,974$ 2%5.5820079,97310%61,0099%6.12200813,68614%84,44112%6.17200912,63613%82,60512%6.54201011,42612%92,73714%8.12201113,01513%81,94212%6.3020128,4169%57,4278%6.8220136,3856%59,1149%9.2620144,9905%28,2124%5.6520156,8077%52,3938%7.702016 AND THEREAFTER9,71010%70,97810%7.3199,011100%681,832$ 100%6.89NOTE: Excludes buildings that are in the held-for-sale portfolio.to Expiring LeasesNet Rentable Area SubjectAnnual Net EffectiveUnder Expiring LeasesUnder Expiring LeasesAnnual Net Effective RentRent Per Square Foot

 


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2006 Objectives Update

 


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2006 Top Objectives Increase Development Pipeline Expand Joint Venture and Fund Business Enter Targeted New Markets Exit Non-Strategic Markets

 


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2006 Objectives Update YTD 2006 starts of $802 million exceed full year 2005 starts of $735 Expand Development Pipeline$326 $476 Millions 0100200300400500Held forRentalHeld forSaleMedical OfficeRetailBulkDistributionSuburbanOffice

 


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Expand Joint Venture and Fund Business Maintain a disciplined approach to locate a partner with aligned goals for D.C. property venture Currently exploring medical office fund opportunities Established two development joint ventures to control key bulk distribution land parcels and leverage development expertise

 


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Baltimore Acquired approximately 184 acres located adjacent to the Port of Baltimore that can support the future development of 2.8 million square feet Begin project development in mid-2007 Washington, D.C. Acquired 2.3 million square feet of office and 655,000 square feet of industrial 166 acres of undeveloped land on which we can develop 3.1 million square feet of office and 560,000 square feet of industrial Construction commenced on 98,000 square foot office building and a 78,500 square foot industrial building Enter into New Markets

 


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 Savannah Acquired 5.1 million square feet bulk distribution portfolio that is 100% leased Duke now controls more than 25% of the Savannah bulk distribution market Phoenix Acquired 290 acres of industrial land that can accommodate over 4 million square feet Begin project development in early 2007 Houston Acquired 42 acres of office and 102 acres of industrial land Begin both office and industrial developments in 2006 Enter into New Markets (cont.)

 


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 Cleveland Market Exit Completed sale of industrial assets and undeveloped land Office assets and undeveloped land will be sold as two portfolios First portfolio 93 percent leased is currently being marketed for sale Target to close in the first quarter of 2007 Second portfolio Working on improving occupancy Will likely be marketed for sale mid-2007 Exit Non-Strategic Markets

 


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Guidance and Investment Thesis

 


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Updated Guidance 2006 Original full year $2.32 to $2.45 Fourth quarter $0.69 to $0.72 Revised full year $2.42 to $2.45 2007 Full year 2007 $2.58 to $2.72 Midpoint of 2007 guidance equates to an 8.8% annual growth in FFO Expect similar level of development starts as in 2006 Will experience continued improvement in FAD payout ratio

 


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Reasons to Invest in Duke Long-term history of earnings and dividend growth Proven business model that creates value Superior development and construction capabilities Multiple sources of growth including geographic expansion and multiple product types Balance sheet strength Experienced management team Commitment to superior disclosure and corporate governance