8-K

UNITED STATES
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):  July 26, 2006

DUKE REALTY CORPORATION
(Exact name of registrant as specified in its charter)

Indiana	1-9044	35-1740409
(State or Other Jurisdiction	(Commission	(IRS Employer
of Incorporation)	File Number)	Identification No.)

600 East 96th Street, Suite 100, Indianapolis, Indiana	46240
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: (317) 808-6000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

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 July 26, 2006, Duke Realty Corporation issued a press release announcing its results of operations and financial condition for the three months ended June 30, 2006.  A copy of the press release is being furnished as Exhibit 99.1 to this Form 8-K.

Item 9.01.Financial Statements and Exhibits.

(d)          Exhibits

99.1 Duke Realty Corporation press release dated July 26, 2006, with respect to its financial results for the three months ended June 30, 2006.

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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:  July 27, 2006

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EX-99.1

Exhibit 99.1

For Immediate Release	For Investor Inquiries, contact:
July 26, 2006	Shona L. Bedwell
2006-16	317.808.6169
	For Media Inquiries, contact:
	Tom Wiser
	317.808.6137

Duke Realty Announces Second Quarter Earnings

_____________________________________________________

Common Stock Dividend Increase Announced

Indianapolis—Duke Realty Corporation (DRE: NYSE) reported today that Funds From Operations (“FFO”) was $78.8 million for the second quarter of 2006 versus $87.8 million for the same period in 2005.  On a per share basis, second quarter FFO was $0.58 per share compared with $0.61 per share for the second quarter of 2005.  Second quarter 2005 results included income from the 212 properties that were sold as part of the industrial portfolio sale in September 2005.  In addition, FFO for the second quarter of 2005 included $0.05 per share of gains on undepreciated property sales.  All per share amounts reported are diluted with basic per share information also included in the financial table accompanying this press release.

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.

Net income available for common shareholders for the second quarter of 2006 was $21.7 million compared to $40.3 million for the second quarter of 2005.  On a per share basis, second quarter 2006 net income available for common shareholders was $0.16 per share compared with $0.28 per share for the second quarter of 2005. Similar to FFO, net income for the second quarter of 2006 was diluted by the effects of the September

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2005 industrial portfolio sale.  In addition, second quarter 2005 results included $0.16 per share of gains on property sales as compared to $0.05 per share in the second quarter of this year.

Denny Oklak, Chairman and Chief Executive Officer, commenting on Duke’s second quarter performance, stated,

“The second quarter was a solid quarter in all areas of our business.  Leasing activity was strong with nearly 7.5 million square feet of deals signed during the quarter.  Our existing properties are performing well with growth in same property performance of more than 3 percent for the twelve months ended June 30.  In addition, our value creation pipeline of new development and construction projects is at $976 million, the highest in the Company’s history.

Looking ahead, we remain comfortable with our FFO per share guidance of $2.32 to $2.45 for 2006 and expect FFO per share of $0.62 to $0.64 for the third quarter of 2006.”

Dividends

Duke also announced today that its Board of Directors increased its quarterly common stock dividend to $0.475 per share, payable on August 31, 2006, to shareholders of record on August 14, 2006.  Equal to $1.90 per share on an annualized basis, the new dividend provides a 1.1 percent increase over the previous amount and represents the thirteenth consecutive annual increase since the Company’s October 1993 public offering.

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	$.998750	September 15, 2006	September 29, 2006
Series J	DREPRJ	$.414063	August 17, 2006	August 31, 2006
Series K	DREPRK	$.406250	August 17, 2006	August 31, 2006
Series L	DREPRL	$.412500	August 17, 2006	August 31, 2006
Series M	DREPRM	$.434375	September 15, 2006	September 29, 2006
Series N	DREPRN	$.458160	September 15, 2006	September 29, 2006

Completion of Consent Solicitation

The Company also announced that on July 21, 2006 Duke Realty Limited Partnership, an operating partnership of which the Company is the sole general partner, had successfully obtained the requisite consents of holders to amend the terms of certain series of its outstanding notes issued prior to May 22, 2003.  The financial covenants were changed to make them consistent with the financial covenants in each series of notes issued by

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Duke Realty Limited Partnership on or after May 22, 2003.  This amendment provides more than $300 million of additional debt capacity and greater capital structure flexibility to the Company.

Second Quarter Operating Statistics

·The Company’s 715 in-service properties totaling 107.6 million square feet were 92.3 percent leased compared to 93.2 percent and 90.7 percent leased at March 31, 2006 and June 30, 2005, respectively.

·The Company’s value creation pipeline totaled $976 million, including $383 million of developments with an expected stabilized return of 9.4 percent that Duke plans to own indefinitely after completion; $514 million of developments with an expected stabilized return of 8.8 percent that the Company plans to sell within approximately one year of completion; and a $79 million backlog of third-party construction volume with a 10.1 percent fee.

·Including 6.3 million square feet of projects under development that were 24.8 percent pre-leased, the Company’s total portfolio at the end of the second quarter consisted of 737 properties totaling approximately 114 million square feet that were 88.6 percent leased.

·Duke renewed 81 percent of leases up for renewal, totaling 1.9 million square feet, on which net effective rents increased 3.7 percent.

·Same property net operating income increased 3.1 percent.

·Property sales in the second quarter totaled $40.1 million at an average stabilized capitalization rate of 8.4 percent.

·Acquisitions in the second quarter totaled $5.3 million.

·The Company’s interest and fixed-charge coverage ratios in the second quarter were 3.2 and 2.1, respectively, and its debt-to-total market capitalization ratio was 38.8 percent at June 30, 2006.

When used in this press release, the word “believes,” “expects,” “estimates” and similar expressions are intended to identify forward-looking statements.  Such statements are subject to certain risks and uncertainties 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 advised to refer to

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Duke’s Annual Report on Form 10-K as filed with the Securities and Exchange Commission on March 6, 2006 for additional information concerning these risks.

About Duke Realty Corporation

Duke Realty Corporation specializes in the ownership, construction, development, leasing and management of office, industrial, medical office and retail real estate.  It is the largest publicly-traded, vertically integrated office/industrial real estate company in the United States.  Duke’s properties encompass approximately 114 million rentable square feet that are leased by more than 3,600 tenants, and more than 6,300 acres of undeveloped land that can support over 90 million square feet of additional development.  Duke provides a full range of services in-house, backs them with more than 30 years experience, and delivers valuable real estate solutions to satisfied customers across the nation.  Duke common stock is listed on the New York Stock Exchange under the symbol: DRE.  Visit Duke on the web at www.dukerealty.com.

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

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Financial Highlights
(in thousands, except per share data)

	Three Months Ended						Six Months Ended
	June 30						June 30
	2006			2005			2006			2005
Operating Results
Revenues from continuing operations	$	220,677		$	198,409		$	430,507		$	384,299
Earnings from rental operations	31,850			35,547			64,461			61,081
Earnings from service operations	3,476			13,046			7,926			24,884
Net income available for common shareholders—Basic	21,717			40,299			33,165			65,780
Net income available for common shareholders—Diluted	23,881			44,128			36,478			72,096
Funds from operations available for common shareholders—Basic	78,756			87,841			146,433			169,466
Funds from operations available for common shareholders—Diluted	86,542			96,133			160,956			185,682
Per Share:
Net income available for common shareholders—Basic	$	0.16		$	0.28		$	0.25		$	0.46
Net income available for common shareholders—Diluted	$	0.16		$	0.28		$	0.24		$	0.46
Funds from operations available for common shareholders—Basic	$	0.58		$	0.61		$	1.09		$	1.18
Funds from operations available for common shareholders—Diluted	$	0.58		$	0.61		$	1.08		$	1.18
Dividend payout ratio of funds from operations	81.9		%	77.1		%	87.5		%	79.2		%
Weighted average shares outstanding
Basic—Net income and Funds From Operations	134,969			143,480			134,876			143,286
Diluted—Net income and Funds From Operations	149,364			157,696			149,273			157,711

	June 30		December 31
	2006		2005
Balance Sheet Data
Net real estate investments	$	5,916,199	$	4,733,100
Total assets	7,014,473		5,647,560
Total debt	3,833,934		2,600,651
Shareholders’ equity	2,614,048		2,452,798
Common shares outstanding at end of period	135,074		134,697

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 Reconciliation of Net Income to Funds From Operations
(in thousands, except per share data)

	Three Months Ended June 30
	(Unaudited)
	2006						2005
				Wtd.						Wtd.
				Avg.	Per					Avg.	Per
	Amount			Shares	Share		Amount			Shares	Share
Net Income Available for Common Shares	$	21,717		134,969	$	0.16	$	40,299		143,480	$	0.28
Add back:
Minority interest in earnings of unitholders	2,164			13,304			3,829			13,506
Other common stock equivalents				1,091						710
Diluted Net Income Available for Common Shares	$	23,881		149,364	$	0.16	$	44,128		157,696	$	0.28
Reconciliation to Funds From Operations (“FFO”)
Net Income Available for Common Shares	$	21,717		134,969	$	0.16	$	40,299		143,480	$	0.28
Adjustments:
Depreciation and Amortization	65,167						64,124
Company Share of Joint Venture Depreciation
and amortization	4,425						4,943
Earnings from depreciable property sales-wholly owned	(1,531		)				(5,888		)
Earnings from depreciable property sales-JV	(5,400		)				(11,174		)
Minority interest share of adjustments	(5,622		)				(4,463		)
Basic Funds From Operations	78,756			134,969	$	0.58	87,841			143,480	$	0.61
Minority interest in earnings of unitholders	2,164			13,304			3,829			13,506
Minority interest share of adjustments	5,622						4,463
Other common stock equivalents				1,091						710
Diluted Funds From Operations	$	86,542		149,364	$	0.58	$	96,133		157,696	$	0.61

	Six Months Ended June 30 (Unaudited)
	2006						2005
				Wtd.						Wtd.
				Avg.	Per					Avg.	Per
	Amount			Shares	Share		Amount			Shares	Share
Net Income Available for Common Shares	$	33,165		134,876	$	0.25	$	65,780		143,286	$	0.46
Add back:
Minority interest in earnings of unitholders	3,313			13,348			6,316			13,681
Other common stock equivalents				1,049						744
Diluted Net Income Available for Common Shares	$	36,478		149,273	$	0.24	$	72,096		157,711	$	0.46
Reconciliation to Funds From Operations (“FFO”)
Net Income Available for Common Shares	$	33,165		134,876	$	0.25	$	65,780		143,286	$	0.46
Adjustments:
Depreciation and Amortization	125,749						127,350
Company Share of Joint Venture Depreciation
and amortization	9,127						9,808
Earnings from depreciable property sales-wholly owned	(2,036		)				(12,398		)
Earnings from depreciable property sales-share of joint venture	(8,362		)				(11,174		)
Minority interest share of adjustments	(11,210		)				(9,900		)
Basic Funds From Operations	146,433			134,876	$	1.09	169,466			143,286	$	1.18
Minority interest in earnings of unitholders	3,313			13,348			6,316			13,681
Minority interest share of adjustments	11,210						9,900
Other common stock equivalents				1,049						744
Diluted Funds From Operations	$	160,956		149,273	$	1.08	$	185,682		157,711	$	1.18