8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported):  Ocotber 27, 2004

DUKE REALTY CORPORATION

(Exact name of registrant specified in its charter)

Indiana	1-9044	35-1740409
(State of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)
600 East 96th Street Suite 100 Indianapolis, IN 46240
(Address of principal executive offices, zip code)
Registrant’s telephone number, including area code: (317) 808-6000

o    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02  Results of Operations and Financial Condition

On October 27, 2004, Duke Realty Corporation issued a press release announcing its results of operations and financial condition for the three months ended September 30, 2004.  This press release is attached hereto as Exhibit 99.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	DUKE REALTY CORPORATION
	By:	/s/ Matthew A. Cohoat
		Matthew A. Cohoat
		Executive Vice President and Chief Financial Officer
Dated: October 27, 2004

2

EX-99.1

Exhibit 99.1

For Immediate Release	For Investor Inquiries, contact:
October 27, 2004	Thomas K. Peck
2004-15	317/808-6168
	For Media Inquiries, contact:
	Donna M. Hovey
	317/808-6137

Duke Realty Announces Third Quarter Earnings

Common and Preferred Stock Dividends Also Announced

Indianapolis - Duke Realty Corporation (NYSE/DRE) reported today that net income available for common shareholders for the third quarter of 2004 was $42.5 million on revenues of $212.4 million, compared to $40.2 million on revenues of $191.3 million for the third quarter last year.  On a per share basis, third quarter net income available for common shareholders remained unchanged at $0.30 per share compared to the third quarter of 2003.  All per share amounts reported are diluted with basic per share information also included in the financial table accompanying this press release.

Diluted funds from operations (“FFO”) were $98.0 million for the third quarter of 2004 versus $96.4 million for the same period in 2003.  On a per share basis, third quarter FFO remained unchanged at $0.62 compared to the third quarter of 2003.  FFO is a supplemental non-GAAP financial measurement used as a standard in the real estate industry to measure and compare the operating performance of real estate companies.  FFO is defined by the National Association of Real Estate Investment Trusts (“NAREIT”) as net income or loss, excluding gains or losses from sales of depreciated property, plus operating property depreciation and amortization and adjustments for minority interest and unconsolidated companies on the same basis.  A reconciliation of FFO to GAAP net income is included in the financial tables accompanying this press release.

-more-

Additionally, the Company’s Board of Directors declared a quarterly dividend of $.465 per common share, or $1.86 per share on an annualized basis.  The dividend is payable on November 30, 2004 to common shareholders of record on November 12, 2004.

The Board also declared today the following dividends on the Company’s outstanding preferred stock:

Class	NYSE Symbol	Quarterly Amount/Share		Record Date	Payment Date
Series B	Not Listed	$	.99875	December 17, 2004	December 31, 2004
Series I	DREPRI	$	.52813	December 17, 2004	December 31, 2004
Series J	DREPRJ	$	.41406	November 16, 2004	November 30, 2004
Series K	DREPRK	$	.40625	November 16, 2004	November 30, 2004

Commenting on Duke’s third quarter performance, Denny Oklak, President and Chief Executive Officer, stated,

“Against a slowly improving economy, we are satisfied with our performance during the third quarter.  Notably, we had a good quarter of investment activity by attaining a higher expected return on $205 million of acquisitions of buildings with an average age of five years than we relinquished on $117 million of buildings that we sold that were 20 years old on average.  With solid development and third-party construction activity, we were also able to increase our value creation pipeline more than 12 percent to $388 million from $345 million at June 30th.  The profitability of our value creation pipeline also improved, with slightly higher expected development yields, and an increase of 45 basis points in the profit margin on our third party construction backlog.  Additionally, I am pleased to announce that Dr. Martin Jischke, who was named as an advisory member of our Board of Directors last quarter, has been elected to the Board to fill the vacancy created by the recent departure of Gene Zink.”

Commenting on the Company’s expectations for the fourth quarter, Oklak continued,

In the fourth quarter, we expect per share FFO to be in the range of $0.65 to $0.67.  After adjusting for $3.6 million of preferred stock redemption charges earlier in the year, our 2004 results should be near the mid-point of the guidance range that we first provided last December.  We have performed well in 2004 against most of our key business drivers. Our

primary area of disappointment this year is that our occupancy has not increased as much as we originally believed was attainable.”

Property information at September 30, 2004 was as follows:

•The Company’s 873 stabilized in-service properties totaling 107.6 million square feet were 90.4 percent leased compared to 90.3 percent and 88.8 percent occupied at June 30, 2004 and September 30, 2003, respectively.

•The Company’s value creation pipeline increased to $388 million at September 30.  The pipeline includes $115 million of developments with an expected stabilized return of 10.0 percent that Duke plans to own indefinitely after completion; $86 million of developments with an expected stabilized return of 9.3 percent that the Company intends to sell within approximately one year of completion; and a $187 million backlog of third-party construction volume with an overall pre-tax profit margin of 8.5 percent.

•Including recently completed developments that have not reached stabilization and developments still under construction, the Company’s total portfolio at the end of the third quarter consisted of 114.1 million square feet that were 88.5 percent leased.

The Company also disclosed the following information for the third quarter of 2004:

•Duke renewed 71.3 percent of leases up for renewal, totaling 1.9 million square feet, on which net effective rents increased by an average of 1.3 percent.

•Same property net operating income increased 4.0 percent and 1.4 percent for the three months and nine months ended September 30, 2004, respectively.

•The Company’s interest and fixed-charge coverage ratios in the third quarter were 4.0 and 3.0, respectively, and its debt-to-total market capitalization ratio was 32.0 percent at September 30, 2004.

When used in this press release, the word “believes,” “expects,” “estimates” and similar expressions are intended to identify forward-looking statements.  Such statements, including estimates of our future operating performance, are subject to certain risks and uncertainties identified in our reports filed with the SEC that could cause actual results to differ materially.  In particular, among the factors that could cause actual results to differ materially are continued qualification as a real estate investment trust, general business and economic conditions, competition, increases in real estate construction costs, interest rates, accessibility of debt and equity capital markets and other risks inherent in the real estate business including tenant defaults, potential liability relating to environmental matters and liquidity of real estate investments. Readers are also advised to refer to Duke’s Form 8-K Report as filed with the Securities and Exchange Commission on July 24, 2003 for additional information concerning risks about investing in our securities.

Duke Realty Corporation is the largest publicly traded office and industrial real estate company in the United States.  Offering a complete range of real estate products and services, Duke produces approximately $800 million in annual revenue from more than 4,200 tenants and focuses on building dominant market positions in each of its 13 geographic platforms across the Midwest and the Southeast.  Duke owns interests in more than 114 million square feet of properties, has over 1,000 employees and owns or controls approximately 4,600 acres of undeveloped land that can support more than 69 million square feet of future development.  Visit Duke on the web at www.dukerealty.com.

A copy of the Company’s September 30, 2004 supplemental information fact book will be available after 6:00 p.m. EST today in the Investor Information section of the Company’s web site at www.dukerealty.com.  Duke is also hosting a conference call tomorrow at 3:00 p.m. Eastern Daylight Time (New York time) to discuss its third quarter operating results.  All investors are invited to listen to this call, which can be accessed through the Investor Information section of the Company’s web site at www.dukerealty.com.

Financial Highlights

(in thousands, except per share data)

	Three Months Ended September 30						Nine Months Ended September 30
Operating Results	2004			2003			2004			2003
Revenues from continuing operations	$	212,405		$	191,349		$	614,652		$	565,419
Earnings from rental operations	35,727			49,285			124,602			135,209
Earnings from service operations	6,341			4,471			13,106			11,407
Net income for common shareholders - Basic	42,527			40,185			110,129			112,200
Net income for common shareholders - Diluted	46,717			44,547			121,142			124,447
Funds from operations - Basic	89,277			84,730			256,982			242,252
Funds from operations - Diluted	98,041			96,370			282,597			276,046
Per Share:
Net income - common shareholders - Basic	$	0.30		$	0.30		$	0.78		$	0.83
Net income - common shareholders - Diluted	$	0.30		$	0.30		$	0.77		$	0.82
Funds from operations - Basic	$	0.63		$	0.62		$	1.82		$	1.79
Funds from operations - Diluted	$	0.62		$	0.62		$	1.80		$	1.77
Dividend payout ratio of funds from operations	75.0		%	74.2		%	77.2		%	77.7		%
Weighted average shares outstanding
Basic - Net income and Funds from operations	142,273			135,706			140,930			135,423
Diluted - Net income	157,105			151,244			156,956			150,965
Diluted - Funds from operations	157,105			156,249			156,983			155,971

Balance Sheet Data	September 30 2004		December 31 2003
Net real estate investments	$	5,089,014	$	4,851,248
Total assets	5,882,080		5,561,249
Total debt	2,659,629		2,335,536
Shareholders’ equity	2,654,227		2,666,749
Common shares outstanding at end of period	142,550		136,594

Reconciliation of Net Income to Funds From Operations

(in thousands, except per share data)

	Three Months Ended September 30
	2004						2003
	Amount			Wtd. Avg. Shares	Per Share		Amount			Wtd. Avg. Shares	Per Share
Net Income Available for Common Shares	$	42,527		142,273	$	0.30	$	40,185		135,706	$	0.30
Add back:
Minority interest in earnings of unitholders	4,190			13,938			4,362			14,667
Other common stock equivalents				894						871
Fully Diluted Net Income	46,717			157,105	$	0.30	44,547			151,244	$	0.30
Adjustments:
Depreciation and Amortization	61,511						48,250
Company Share of Joint Venture Depreciation and amortization	4,686						4,459
(Earnings) loss from depreciable property sales	(14,873		)				(3,349		)
Dilutive effect of Convertible Preferred D Shares	0						2,463			5,005
Fully Diluted Funds From Operations	$	98,041		157,105	$	0.62	$	96,370		156,249	$	0.62

	Nine Months Ended September 30
	2004						2003
	Amount			Wtd. Avg. Shares	Per Share		Amount			Wtd. Avg. Shares	Per Share
Net Income Available for Common Shares	$	110,129		140,930	$	0.78	$	112,200		135,423	$	0.83
Add back:
Minority interest in earnings of unitholders	11,013			13,975			12,247			14,740
Dilutive effect of Convertible Preferred D Shares				1,170
Other common stock equivalents				881						802
Fully Diluted Net Income	121,142			156,956	$	0.77	124,447			150,965	$	0.82
Adjustments:
Depreciation and Amortization	167,159						142,539
Company Share of Joint Venture Depreciation and amortization	13,883						14,236
(Earnings) loss from depreciable property sales	(19,627		)				(12,567		)
Dilutive effect of Convertible Preferred D Shares	40			27			7,391			5,006
Fully Diluted Funds From Operations	$	282,597		156,983	$	1.80	$	276,046		155,971	$	1.77