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): April 24, 2013

DUKE REALTY CORPORATION

DUKE REALTY LIMITED PARTNERSHIP

(Exact name of registrant specified in its charter)

Duke Realty Corporation:

Indiana	1-9044	35-1740409
(State of Formation)	(Commission File Number)	(IRS Employer Identification No.)

Duke Realty Limited Partnership:

Indiana	0-20625	35-1898425
(State of Formation)	(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

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:

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

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

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

¨ 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 April 24, 2013, Duke Realty Corporation, an Indiana corporation (the “Company”), the sole general partner of Duke Realty Limited Partnership, an Indiana limited partnership, issued a press release (the “Press Release”) announcing its results of operations and financial condition for the quarter ended March 31, 2013. A copy of the Press Release is attached hereto as Exhibit 99.1 and is incorporated into this Item 2.02 by this reference.

On April 25, 2013, the Company also held a conference call to discuss the Company’s financial results for the quarter ended March 31, 2013. Pursuant to General Instruction F to Form 8-K, a copy of the transcript from the conference call (the “Transcript”) is attached hereto as Exhibit 99.2 and is incorporated into this Item 2.02 by this reference. The Transcript has been selectively edited to facilitate the understanding of the information communicated during the conference call.

The information contained in this Item 2.02, including the related information set forth in the Press Release and the Transcript attached hereto and incorporated by reference herein, is being “furnished” and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise. The information in this Item 2.02 shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended, or into any filing or other document pursuant to the Exchange Act, except as otherwise expressly stated in any such filing.

Item 5.07. Submission of Matters to a Vote of Security Holders.

At the Company’s Annual Meeting of Shareholders held on April 24, 2013 (the “Annual Meeting”), the shareholders of the Company voted on three proposals. Each proposal was approved pursuant to the following final voting results from the Annual Meeting:

1. To elect twelve directors to serve on the Company’s Board of Directors for a one-year term ending at the 2014 Annual Meeting of Shareholders:

	FOR		AGAINST		ABSTAIN		BROKER NON-VOTES
Thomas J. Baltimore, Jr.		266,684,630		5,060,923		284,468		23,023,125
William Cavanaugh III		265,791,328		6,035,298		203,395		23,023,125
Alan H. Cohen		269,851,624		1,893,846		264,551		23,023,125
Ngaire E. Cuneo		263,007,928		8,814,190		207,903		23,023,125
Charles R. Eitel		268,461,260		3,357,017		211,744		23,023,125
Martin C. Jischke, PhD		269,696,543		2,044,293		289,185		23,023,125
Dennis D. Oklak		261,161,104		8,130,541		2,738,376		23,023,125
Melanie R. Sabelhaus		269,742,857		2,006,447		280,717		23,023,125
Peter M. Scott, III		269,934,315		1,808,685		287,021		23,023,125
Jack R. Shaw		269,821,919		1,921,366		286,736		23,023,125
Lynn C. Thurber		269,928,513		1,825,792		275,716		23,023,125
Robert J. Woodward, Jr.		268,322,160		3,484,052		223,809		23,023,125

2. To vote on a non-binding resolution to approve the compensation of the Company’s executive officers for 2012:

FOR		AGAINST		ABSTAIN		BROKER NON-VOTES
	262,197,991		9,340,969		491,061		23,023,125

3. To ratify the reappointment of KPMG LLP as the Company’s independent registered public accountants for the fiscal year 2013:

FOR		AGAINST		ABSTAIN		BROKER NON-VOTES
	292,367,105		2,359,994		326,047		—

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

Exhibit Number	Description
99.1	Duke Realty Corporation press release dated April 24, 2013, with respect to its financial results for the quarter ended March 31, 2013.*
99.2	Duke Realty Corporation transcript from the conference call held on April 25, 2013, with respect to its financial results for the quarter ended March 31, 2013.*

* The Press Release and the Transcript attached hereto as Exhibits 99.1 and 99.2, respectively, are “furnished” and not “filed,” as described in Item 2.02 of this Current Report on Form 8-K.

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/ ANN C. DEE
	Ann C. Dee
	Senior Vice President, General Counsel and Corporate Secretary

DUKE REALTY LIMITED PARTNERSHIP
By:	Duke Realty Corporation, its general partner
By:	/s/ ANN C. DEE
	Ann C. Dee
	Senior Vice President, General Counsel and Corporate Secretary

Dated: April 29, 2013

EXHIBIT INDEX

Exhibit Number	Description
99.1	Duke Realty Corporation press release dated April 24, 2013, with respect to its financial results for the quarter ended March 31, 2013.*
99.2	Duke Realty Corporation transcript from the conference call held on April 24, 2013, with respect to its financial results for the quarter ended March 31, 2013.*

* The Press Release and the Transcript attached hereto as Exhibits 99.1 and 99.2, respectively, are “furnished” and not “filed,” as described in Item 2.02 of this Current Report on Form 8-K.

EX-99.1

Exhibit 99.1

News Release

FOR IMMEDIATE RELEASE

DUKE REALTY REPORTS

FIRST QUARTER 2013 RESULTS

Core FFO per share of $0.26 and AFFO per share of $0.23

Advancing Asset Strategy towards Transformative Plan with $223 million of

primarily Suburban Office Dispositions

$139 million in New Development Starts that were 81 percent pre-leased

Bolstered Balance Sheet with Successful $572 million Equity Offering and a

Reduction in Annual Interest and Preferred Dividend Obligations

of nearly $22 million

(INDIANAPOLIS, April 24, 2013) – Duke Realty Corporation (NYSE: DRE), a leading industrial, suburban and medical office property REIT, today reported results for the first quarter of 2013.

“Significant progress on asset dispositions, strong development starts and timely capital markets transactions all in accordance with strategic plan resulted in another excellent quarter,” said Denny Oklak, Chairman and CEO. “Core FFO was $0.26 per share and AFFO was $0.23 per share. We achieved strong same-property net operating income growth of 2.4 percent as compared to the twelve months ended March 31, 2012. There was continued strong momentum in new development starts during the quarter with six build-to-suit projects and one speculative development project, at a combined projected stabilized yield of approximately 8 percent. We also completed significant disposition activity during the quarter with $223 million in proceeds from primarily suburban office buildings, substantially advancing our asset

Duke Realty Reports First Quarter 2013 Results

April 24, 2013

Page 2 of 9

repositioning strategy. In the capital markets, we significantly bolstered our balance sheet with a $572 million equity raise in January, a redemption of $178 million 8.375 percent coupon preferred shares in February, followed by a $250 million ten-year, senior unsecured note offering in March to pre-fund May 2013 maturities, at a company record low 3.72 percent effective rate.”

“We completed 6.3 million square feet of leasing activity and finished the quarter with overall portfolio occupancy of 91.8 percent. Occupancy decreased slightly from December 31, 2012, due to a few large lease expirations at the end of the quarter, as well as two larger dispositions, both of which were anticipated in our annual guidance. However, I’m pleased to note that a majority of the vacancies created by expiring leases were immediately backfilled and a pipeline of prospects for the remaining vacated spaces is strong. Overall, we are pleased with our outstanding first quarter.”

Quarterly Highlights

Core Funds from Operations (“Core FFO”) per diluted share was $0.26 for the quarter. Funds from Operations (“FFO”) per diluted share, as defined by the National Association of Real Estate Investment Trusts (“NAREIT”), was $0.24 for the quarter.

Solid operating results:

• Total in-service portfolio occupancy of 92.1 percent and bulk industrial in-service occupancy of 93.6 percent at March 31, 2013;

• Total leasing activity of approximately 6.3 million square feet in the first quarter of 2013;

• Same-property net operating income growth of 2.4 percent for the twelve months ended March 31, 2013 and 2.6 percent for the three months ended March 31, 2013, as compared to the comparable periods ended March 31, 2012.

Progress on asset and capital strategies:

• Completed $223 million of dispositions;

• Completed approximately $30 million of acquisitions during the quarter;

• Began over $139 million of new developments, consisting of two industrial developments totaling 920,000 square feet, four build-to-suit medical office buildings totaling 148,000 square feet and one build-to-suit office building totaling 200,000 square feet;

• Issued 41.4 million shares of common equity, raising $572 million in net proceeds;

• Redeemed $178 million of 8.375 percent Series O Preferred Shares resulting in annual dividend savings of nearly $15 million;

Duke Realty Reports First Quarter 2013 Results

April 24, 2013

Page 3 of 9

• Issued $250 million of ten-year, senior unsecured notes, with an effective rate of 3.72 percent, which, after being used to fund May unsecured debt maturities, will result in an ongoing annual reduction to interest expense of nearly $7 million;

• Ended the first quarter with $307 million of cash on hand and zero balance on our line of credit.

Financial Performance

• Core FFO for the first quarter of 2013 of $0.26 per share compared to $0.24 per share for the first quarter of 2012. The 8.3% positive year-over-year growth rate was primarily attributable to improved occupancy and same-property performance, as well as lower preferred dividends.

• FFO as defined by NAREIT, of $0.24 per share for the first quarter 2013 compared to $0.21 per share for the first quarter 2012. The 14.3% positive year-over-year growth rate, in addition to the impacts outlined in Core FFO above, was reduced in both periods by redemption costs related to preferred stock. A reconciliation of FFO, as defined by NAREIT, to Core FFO is included in the financial tables included in this release.

• Adjusted FFO (“AFFO”) for the first quarter of 2013 of $0.23 per share compared to $0.20 from the first quarter of 2012. The 15.0% positive year-over-year growth rate was primarily due to the impacts outlined in Core FFO above. A reconciliation of FFO, as defined by NAREIT, to AFFO is included in the financial tables included in this release.

• Net income of $0.09 per diluted share for the first quarter of 2013 compared to a net loss of $0.14 per diluted share for the same quarter in 2012. The $0.23 per diluted share growth year-over-year was primarily attributable to the recognition of our share of the gain on the sale of 18 properties from two unconsolidated joint ventures in 2013.

Operating Performance Highlights

• Overall portfolio occupancy on March 31, 2013 of 91.8 percent compared to 92.4 percent on December 31, 2012. The slight drop in occupancy was due to anticipated lease expirations, primarily in two industrial facilities and one office facility. Two of the three facilities were immediately backfilled, in part or in whole. Two large dispositions also impacted in-service occupancy.

• In-service occupancy in the bulk distribution portfolio on March 31, 2013 of 93.6 percent compared to 94.6 percent on December 31, 2012.

Duke Realty Reports First Quarter 2013 Results

April 24, 2013

Page 4 of 9

• In-service occupancy in the medical office portfolio of 90.9 percent on March 31, 2013 compared to 91.5 percent on December 31, 2012.

• In-service occupancy in the suburban office portfolio of 84.5 percent on March 31, 2013 compared to 86.3 percent on December 31, 2012, largely attributable to dispositions.

• Tenant retention for the quarter of approximately 49 percent with overall positive rental rate growth of 1.9 percent. The drop in tenant retention was impacted primarily from two large lease expirations that we had been expecting totaling 1,200,000 square feet. During the quarter, two new leases were signed with different tenants to immediately backfill approximately 901,000 square feet of this space.

• Same-property net operating income growth of 2.4 percent for the twelve months ended March 31, 2013 and 2.6 percent for the three months ended March 31, 2013, as compared to the comparable periods ended March 31, 2012. This positive same-property performance was primarily driven by increased occupancy and modest rental rate growth.

Real Estate Investment Activity

The company acquired $30 million of industrial and medical office assets totaling approximately 473,000 square feet in the first quarter of 2013.

The first quarter included the following acquisitions:

• Acquisition of our 50 percent partner’s interest in a 376,000 square foot bulk industrial facility that is 100 percent leased, located in Indianapolis, IN;

• Acquisition of a 97,000 square foot on-campus medical office facility, that was 82 percent leased and located in Tampa, FL.

Development

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.”

Duke Realty Reports First Quarter 2013 Results

April 24, 2013

Page 5 of 9

The first quarter included the following development activity:

Wholly-Owned Properties

• 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.

Dispositions

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;

Duke Realty Reports First Quarter 2013 Results

April 24, 2013

Page 6 of 9

• 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.

Also in April, the company entered into a definitive agreement to acquire a $311 million class A industrial portfolio from affiliates of USAA Real Estate Company. The geographically diversified portfolio includes eight, modern bulk industrial facilities totaling over 4.8 million square feet that are 100 percent leased. The acquisition includes the assumption of $99 million of secured debt. Closing of the transaction is subject to customary closing conditions and is expected to occur in May 2013.

“The continued capital recycling activity during the quarter, as well as the proposed closing of the USAA and Pembroke transactions, provide further progress on our strategy to have at least 60 percent of our portfolio in bulk industrial by the end of the year,” Oklak stated.

2013 Earnings Guidance

The company reaffirmed annual Core FFO guidance for 2013 of $1.03 to $1.11 per share.

Duke Realty Reports First Quarter 2013 Results

April 24, 2013

Page 7 of 9

Dividends Declared

Our board of directors declared a quarterly cash dividend on our common stock of $0.17 per share, or $0.68 per share on an annualized basis. The first quarter dividend will be payable May 31, 2013 to shareholders of record on May 16, 2013. The board also declared the following dividends on our outstanding preferred stock:

Class	NYSE Symbol	Quarterly Amount/Share	Record Date	Payment Date
Series J	DREPRJ	$0.4140625	May 16, 2013	May 31, 2013
Series K	DREPRK	$0.40625	May 16, 2013	May 31, 2013
Series L	DREPRL	$0.4125	May 16, 2013	May 31, 2013

FFO and AFFO Reporting Definitions

Funds from Operations (“FFO”): FFO is computed in accordance with standards established by the National Association of Real Estate Investment Trusts (“NAREIT”). NAREIT defines FFO as net income (loss) excluding gains (losses) on sales of depreciable property, impairment charges related to depreciable real estate assets, and extraordinary items (computed in accordance with generally accepted accounting principles (“GAAP”)); plus real estate related depreciation and amortization, and after similar adjustments for unconsolidated joint ventures. The company believes FFO to be most directly comparable to net income as defined by GAAP. The company believes that FFO should be examined in conjunction with net income (as defined by GAAP) as presented in the financial statements accompanying this release. FFO does not represent a measure of liquidity, nor is it indicative of funds available for the company’s cash needs, including the company’s ability to make cash distributions to shareholders.

Core Funds from Operations (“Core FFO”): Core FFO is computed as FFO adjusted for certain items that are generally non-cash in nature and that materially distort the comparative measurement of company performance over time. The adjustments include impairment charges not related to depreciable real estate assets, tax expenses or benefit related to (i) changes in deferred tax asset valuation allowances, (ii) changes in tax exposure accruals that were established as the result of the adoption of new accounting principles, or (iii) taxable income (loss) related to other items excluded from FFO or Core FFO (collectively referred to as “other income tax items”), gains (losses) on debt transactions, adjustments on the repurchase of preferred stock, gains (losses) on and related costs of acquisitions, and severance charges related to major overhead restructuring activities. Although the company’s calculation of Core FFO differs from NAREIT’s definition of FFO and may not be comparable to that of other REITs and real estate companies, the company believes it provides a meaningful supplemental measure of its operating performance.

Duke Realty Reports First Quarter 2013 Results

April 24, 2013

Page 8 of 9

Adjusted Funds from Operations (“AFFO”): AFFO is defined by the company as Core FFO (as defined above), less recurring building improvements and second generation capital expenditures (the leasing of vacant space that had previously been under lease by the company is referred to as second generation lease activity) and adjusted for certain non-cash items including straight line rental income, non-cash components of interest expense and stock compensation expense, and after similar adjustments for unconsolidated partnerships and joint ventures.

Same Property Performance

The company includes same-property net operating income growth as a property-level supplemental measure of performance. The company does not believe same-property net operating income growth to be a primary measure of overall company operating performance. The company utilizes same-property net income growth as a supplemental measure to evaluate property-level performance, without differentiating or making adjustment as to whether a property is consolidated or jointly controlled.

A description of the properties that are excluded from the company’s same-property measure is included on page 21 of our March 31, 2013 supplemental information.

About Duke Realty

Duke Realty owns and operates approximately 143 million rentable square feet of industrial and office assets, including medical office, in 18 major U.S. cities. Duke Realty is publicly traded on the NYSE under the symbol DRE and is listed on the S&P MidCap 400 Index. More information about Duke Realty is available at www.dukerealty.com.

First Quarter Earnings Call and Supplemental Information

Duke Realty is hosting a conference call tomorrow, April 25, 2013, at 3:00 p.m. EDT to discuss its first quarter operating results. All investors and other interested parties are invited to listen to the call. Access is available through the Investor Relations section of the company’s website.

A copy of the company’s supplemental information will be available by 6:00 p.m. EDT today through the Investor Relations section of the company’s website.

Duke Realty Reports First Quarter 2013 Results

April 24, 2013

Page 9 of 9

Cautionary Notice Regarding Forward-Looking Statements

This news release may contain forward-looking statements within the meaning of the federal securities laws. All statements, other than statements of historical facts, including, among others, statements regarding the company’s future financial position or results, future dividends, and future performance, are forward-looking statements. Those statements include statements regarding the intent, belief or current expectations of the company, members of its management team, as well as the assumptions on which such statements are based, and generally are identified by the use of words such as “may,” “will,” “seeks,” “anticipates,” “believes,” “estimates,” “expects,” “plans,” “intends,” “should,” or similar expressions. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that actual results may differ materially from those contemplated by such forward-looking statements. Many of these factors are beyond the company’s abilities to control or predict. Such factors include, but are not limited to, (i) general adverse economic and local real estate conditions; (ii) the inability of major tenants to continue paying their rent obligations due to bankruptcy, insolvency or a general downturn in their business; (iii) financing risks, such as the inability to obtain equity, debt or other sources of financing or refinancing on favorable terms, if at all; (iv) the company’s ability to raise capital by selling its assets; (v) changes in governmental laws and regulations; (vi) the level and volatility of interest rates and foreign currency exchange rates; (vii) valuation of joint venture investments, (viii) valuation of marketable securities and other investments; (ix) valuation of real estate; (x) increases in operating costs; (xi) changes in the dividend policy for the company’s common stock; (xii) the reduction in the company’s income in the event of multiple lease terminations by tenants; (xiii) impairment charges, (xiv) the effects of geopolitical instability and risks such as terrorist attacks; (xv) the effects of weather and natural disasters such as floods, droughts, wind, tornados and hurricanes; and (xvi) the effect of any damage to our reputation resulting from developments relating to any of items (i) – (ix). Additional information concerning factors that could cause actual results to differ materially from those forward-looking statements is contained from time to time in the company’s filings with the Securities and Exchange Commission. The company refers you to the section entitled “Risk Factors” contained in the company’s Annual Report on Form 10-K for the year ended December 31, 2012. Copies of each filing may be obtained from the company or the Securities and Exchange Commission.

The risks included here are not exhaustive and undue reliance should not be placed on any forward-looking statements, which are based on current expectations. All written and oral forward-looking statements attributable to the company, its management, or persons acting on their behalf are qualified in their entirety by these cautionary statements. Further, forward-looking statements speak only as of the date they are made, and the company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time unless otherwise required by law.

Contact Information:

Investors:

Ron Hubbard

317.808.6060

Media:

Helen McCarthy

317.708.8010

Duke Realty Corporation

Statement of Operations

March 31, 2013

(In thousands, except per share amounts)

(Unaudited)

	Three Months Ended March 31,
	2013			2012
Revenues:
Rental and related revenue	$	221,264		$	196,693
General contractor and service fee revenue		47,404			68,968
		268,668			265,661
Expenses:
Rental expenses		41,713			35,758
Real estate taxes		30,487			27,849
General contractor and other services expenses		38,341			63,921
Depreciation and amortization		97,115			88,090
		207,656			215,618
Other operating activities:
Equity in earnings of unconsolidated companies		49,378			1,509
Gain on sale of properties		168			(277	)
Undeveloped land carrying costs		(2,198	)		(2,298	)
Other operating expenses		(68	)		(265	)
General and administrative expenses		(13,145	)		(11,839	)
		34,135			(13,170	)
Operating income		95,147			36,873
Other income (expenses):
Interest and other income, net		153			146
Interest expense		(60,075	)		(59,299	)
Acquisition-related activity		643			(580	)
Income (loss) from continuing operations		35,868			(22,860	)
Discontinued operations:
Loss before gain on sales		(699	)		(1,726	)
Gain on sale of depreciable properties		8,954			6,476
Income from discontinued operations		8,255			4,750
Net income (loss)		44,123			(18,110	)
Dividends on preferred shares		(9,550	)		(13,193	)
Adjustments for redemption/repurchase of preferred shares		(5,932	)		(5,730	)
Net (income) loss attributable to noncontrolling interests		(598	)		643
Net income (loss) attributable to common shareholders	$	28,043		($	36,390	)
Basic net income (loss) per common share:
Continuing operations attributable to common shareholders	$	0.06		($	0.16	)
Discontinued operations attributable to common shareholders	$	0.03		$	0.02
Total	$	0.09		($	0.14	)
Diluted net income (loss) per common share:
Continuing operations attributable to common shareholders	$	0.06		($	0.16	)
Discontinued operations attributable to common shareholders	$	0.03		$	0.02
Total	$	0.09		($	0.14	)

Duke Realty Corporation

Statement of Funds From Operations

March 31, 2013

(In thousands, except per share amounts)

	Three Months Ended March 31, (Unaudited)
	2013							2012
	Amount			Wtd. Avg. Shares		Per Share		Amount			Wtd. Avg. Shares		Per Share
Net Income (Loss) Attributable to Common Shareholders	$	28,043						($	36,390	)
Less: Dividends on participating securities		(688	)						(852	)
Net Income (Loss) Per Common Share-Basic		27,355			314,936	$	0.09		(37,242	)		258,365	($	0.14	)
Add back:
Noncontrolling interest in earnings of unitholders		392			4,405				—			—
Other potentially dilutive securities					230							—
Net Income (Loss) Attributable to Common Shareholders-Diluted	$	27,747			319,571	$	0.09	($	37,242	)		258,365	($	0.14	)
Reconciliation to Funds From Operations ("FFO")
Net Income (Loss) Attributable to Common Shareholders	$	28,043			314,936			($	36,390	)		258,365
Adjustments:
Depreciation and amortization		99,780							92,256
Company share of joint venture depreciation and amortization		7,629							8,586
Gains on depreciable property sales-wholly owned, discontinued operations		(8,954	)						(6,476	)
Gains on depreciable property sales-wholly owned, continuing operations		(168	)						277
Gains on depreciable property sales-JV		(48,814	)						—
Noncontrolling interest share of adjustments		(682	)						(2,060	)
Funds From Operations- Basic		76,834			314,936	$	0.24		56,193			258,365	$	0.22
Noncontrolling interest in income (loss) of unitholders		392			4,405				(811	)		5,749
Noncontrolling interest share of adjustments		682							2,060
Other potentially dilutive securities					3,098							3,725
Funds From Operations- Diluted	$	77,908			322,439	$	0.24	$	57,442			267,839	$	0.21
Adjustments for redemption/repurchase of preferred shares		5,932							5,730
Acquisition-related activity		(643	)						580
Core Funds From Operations- Diluted	$	83,197			322,439	$	0.26	$	63,752			267,839	$	0.24
Adjusted Funds From Operations
Core Funds From Operations- Diluted	$	83,197			322,439	$	0.26	$	63,752			267,839	$	0.24
Adjustments:
Straight-line rental income		(5,891	)						(7,265	)
Amortization of above/below market rents and concessions		2,210							1,983
Stock based compensation expense		6,854							6,065
Noncash interest expense		2,310							2,235
Second generation concessions		(68	)						(148	)
Second generation tenant improvements		(7,859	)						(5,602	)
Second generation leasing commissions		(5,636	)						(6,337	)
Building improvements		(634	)						(732	)
Adjusted Funds From Operations - Diluted	$	74,483			322,439	$	0.23	$	53,951			267,839	$	0.20

Duke Realty Corporation

Balance Sheet

March 31, 2013

(In thousands)

(Unaudited)

	March 31, 2013			December 31, 2012
ASSETS:
Rental Property	$	6,727,590		$	6,708,250
Less: Accumulated Depreciation		(1,346,961	)		(1,296,685	)
Construction in Progress		303,383			234,918
Undeveloped Land		607,283			614,208
Net Real Estate Investments		6,291,295			6,260,691
Cash		307,167			33,889
Accounts Receivable		21,380			22,367
Straight-line Rents Receivable		123,108			120,383
Receivables on Construction Contracts		27,465			39,754
Investments in and Advances to Unconsolidated Companies		331,041			372,256
Deferred Financing Costs, Net		41,097			40,083
Deferred Leasing and Other Costs, Net		489,621			503,527
Escrow Deposits and Other Assets		169,925			167,151
Total Assets	$	7,802,099		$	7,560,101
LIABILITIES AND EQUITY:
Secured Debt	$	1,151,660		$	1,167,953
Unsecured Notes		3,242,737			2,993,217
Unsecured Line of Credit		—			285,000
Construction Payables and Amounts due to Subcontractors		81,044			84,679
Accrued Real Estate Taxes		78,985			74,648
Accrued Interest		41,626			59,215
Other Accrued Expenses		33,132			57,892
Other Liabilities		124,368			168,577
Tenant Security Deposits and Prepaid Rents		43,966			42,802
Total Liabilities		4,797,518			4,933,983
Preferred Stock		447,683			625,638
Common Stock and Additional Paid-in Capital		4,540,121			3,956,291
Accumulated Other Comprehensive Income		3,228			2,691
Distributions in Excess of Net Income		(2,020,455	)		(1,993,206	)
Total Shareholders' Equity		2,970,577			2,591,414
Noncontrolling Interest		34,004			34,704
Total Liabilities and Equity	$	7,802,099		$	7,560,101

EX-99.2

Exhibit 99.2

THOMSON REUTERS STREETEVENTS

EDITED TRANSCRIPT

DRE - Q1 2013 Duke Realty Earnings Conference Call

EVENT DATE/TIME: APRIL 25, 2013 / 07:00PM GMT

OVERVIEW:

DRE reported 1Q13 core FFO of $0.26 per share. Expects 2013 FFO per share to be $1.03-1.11.

THOMSON REUTERS STREETEVENTS | www.streetevents.com | Contact Us   © 2013 Thomson Reuters. All rights reserved. Republication or redistribution of Thomson Reuters content, including by framing or similar means, is prohibited without the prior written consent of Thomson Reuters. ‘Thomson Reuters’ and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies.

  APRIL 25, 2013 / 07:00PM, DRE - Q1 2013 Duke Realty Earnings Conference Call

CORPORATE PARTICIPANTS

Ron Hubbard Duke Realty Corp - VP, IR

Denny Oklak Duke Realty Corp - Chairman and CEO

Christie Kelly Duke Realty Corp - EVP & CFO

CONFERENCE CALL PARTICIPANTS

Brendan Maiorana Wells Fargo Securities - Analyst

Dave Rodgers RBC Capital Markets - Analyst

Josh Attie Citigroup - Analyst

Vincent Chao Deutsche Bank - Analyst

Eric Frankel Green Street Advisors - Analyst

Scott O’Donnell State Street Realty Advisors - Analyst

Michael Salinsky RBC Capital Markets - Analyst

Michael Bilerman Citigroup - Analyst

PRESENTATION

Operator

Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to the Duke Realty first quarter earnings conference call. At this time, all participants are in a listen-only mode. Later there will be an opportunity for questions and answers, with instructions given at that time.

(Operator Instructions)

As a reminder, today’s conference call is being recorded. I would now like to turn the conference call over to your host, Ron Hubbard. Please go ahead.

Ron Hubbard - Duke Realty Corp - VP, IR

Thank you, Allen. Good afternoon everyone, and welcome to our first quarter earnings call. Joining me today are Denny Oklak, Chairman and CEO; Christie Kelly, Executive Vice President and CFO; and Mark Denien, Chief Accounting Officer. Before we make our prepared remarks, let me remind you that statements we make today are subject to certain risks and uncertainties that could cause actual results to differ materially from expectations. For more information about those risk factors, we would refer you to our December 31, 2012 10-K that we have on file with the SEC. Now, for our prepared statement, I’ll turn it over to Denny Oklak.

Denny Oklak - Duke Realty Corp - Chairman and CEO

Thank you, Ron. Good afternoon, everyone. Today we’ll highlight some of our key accomplishments during the first quarter in both our operational and asset strategies. Christie will then address our first quarter financial performance and the progress on our capital strategy. We followed up the positive momentum from 2012 and are off to a great start for 2013 on all fronts. We signed 6.3 million square feet of leases in the first quarter, and finished the quarter at a 91.8% overall occupancy rate, which includes projects under development. We started $139 million of new development projects, comprised of $40 million of bulk, industrial $59 million of medical office, and a $40 million suburban office project.

2

THOMSON REUTERS STREETEVENTS | www.streetevents.com | Contact Us   ©2013 Thomson Reuters. All rights reserved. Republication or redistribution of Thomson Reuters content, including by framing or similar means, is prohibited without the prior written consent of Thomson Reuters. ‘Thomson Reuters’ and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies.

  APRIL 25, 2013 / 07:00PM, DRE - Q1 2013 Duke Realty Earnings Conference Call

Six of our seven new development starts are 100% preleased, while one project is a speculative start on our land in Houston, which has strong fundamentals. I’ll touch on the developments in a little bit more detail shortly. We continue to make progress on our asset repositioning strategy during the quarter, with $223 million of proceeds generated from dispositions of primarily suburban office properties, as well as $30 million of acquisitions. On the capital front, we raised over $820 million of equity and debt that was used for deleveraging and prefunding our May debt maturities. The redemption of the $178 million 8.375% preferred O shares, together with the $250 million unsecured debt offering issued at an effective interest rate of 3.72% will save the Company nearly $22 million in annual interest and dividend costs on an ongoing basis.

Christie will speak more in depth on our capital activities in a moment. From a macroeconomic perspective, the economy appears on track for another slow year of economic growth, with current GDP expectations between the 2% and 3% range. Even with modest growth, the demand drivers in the industrial sector remain solid, with first quarter net absorption of 32 million square feet on a national basis, following up on the fourth quarter of 2012 at 55 million square feet, which was the highest quarter in five years. This positive activity continues across most major distribution markets, with nearly 80% of the top markets recording vacancy drops, the most widespread improvement in a decade. The Class A national vacancy is now in the 9% range.

The tightening of key industrial market fundamentals, together with trends in e-commerce and supply chain modernization should bode very well for value creation opportunities from our strategic land bank and best-in-class development platform. The healthcare industry trends that are driving strong demand for new modern design outpatient space remain very strong. Our team continues to be selected as one of the premier new facility providers to leading health systems across the country, with a steady pipeline of deals. The suburban office sector continues to be sluggish in most markets, though there are pockets where absorption is improving. The office market fundamentals still favor the tenant, and thus TI’s in concession remain above the long-term averages.

Even so, the availability of debt at historically low rates has increased investor appetite for suburban office transactions, which gives us optimism in executing our office disposition plans for this year. Turning to operations, we had a solid quarter of leasing at 6.3 million square feet. We ended the quarter with overall occupancy at 91.8%. Occupancy dropped approximately 60 basis points from the end of the year, and a couple of factors led to this decrease. First, the sale of the Cap Trust tower and Chambers Street portfolio, which we discussed in January and disclosed in the presentation we posted in our website in March, were approximately 98% occupied on a combined basis.

Second, we had a few larger industrial leases expire right at the end of the quarter, as anticipated in our annual average in-service occupancy guide. Activity remains strong, and we anticipate occupancy to head back up in the second quarter. These larger expirations also abnormally pushed down our tenant retention for the quarter to 49%; however, I’m pleased to note that a few of these vacancies created by the expiring leases were immediately backfilled, and a pipeline of prospects for the remaining vacant spaces is strong. Specifically, two large exploration expirations totaled 1.2 million square feet, yet two new leases were signed with different tenants who immediately backfilled approximately 901,000 square feet of that space.

Rental rent growth and renewals continues to be positive in most markets at a little under 2% overall across the portfolio, with the trendline from last year continuing to move upward. With respect to same property performance, we achieved positive same property NOI growth for the 12 month and three months ended March 31 of 2.4% and 2.6%, respectively. We expect the pace of same property growth to moderate over the next few quarters, given the expected slower pace of occupancy gains and modest rental rate growth that’s anticipated. Now let me touch on some of the key activity within these product types for the quarter. With respect to leasing in our industrial portfolio, we do continue to see fundamentals improve with the completion of nearly 3.1 million square feet of new industrial leases, and about 2 million square feet of renewal leases.

Bulk industrial in-service occupancy at the end of the quarter dipped to 93.6%, roughly 90 basis points below the previous quarter, and at a steady level compared to a year ago. As noted, we had some larger anticipated lease expirations in our industrial portfolio, but strong leasing backfilled a number of those. Some of our larger lease deals included a 704,000 square foot expansion in renewal lease across two facilities for Netrada in Cincinnati, a 437,000 square feet lease with a major retailer in our Groveport Commerce Center in Columbus, and a 500,000 square foot lease with Home Depot in Savannah. In the medical office portfolio, we had a solid quarter with nearly 250,000 square feet of new and renewal leases signed.

The office leasing environment continues to be challenging across most markets, but we did have a solid quarter of leasing with nearly 1.1 million square feet of new and renewal leases signed. In our Sam Houston Crossing speculative office project in Houston, we have now signed two leases,

3

THOMSON REUTERS STREETEVENTS | www.streetevents.com | Contact Us   ©2013 Thomson Reuters. All rights reserved. Republication or redistribution of Thomson Reuters content, including by framing or similar means, is prohibited without the prior written consent of Thomson Reuters. ‘Thomson Reuters’ and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies.

  APRIL 25, 2013 / 07:00PM, DRE - Q1 2013 Duke Realty Earnings Conference Call

which brings the lease percentage to 91% for this project that will open later this year. We had $223 million of dispositions during the quarter. Most of the proceeds came from the sale of our interest in the two suburban office joint ventures which we mentioned in January. We also sold a couple of nonstrategic medical facilities and a small flex portfolio. Our only acquisitions during the quarter were a medical office building in Tampa, which we bought from an existing customer, and our partner’s 50% interest in a fully leased industrial building in Indianapolis.

Yesterday we announced two significant and strategic strategically important transactions that are now under contract. First, we’re selling our Pembroke Gardens Retail Center in South Florida, in accordance with our strategy to dispose of our remaining retail assets. This project is in a great location on Interstate 75 in West Broward County, and has performed extremely well. Interest in this Center was high, and the sales price will be $188 million, or $480 per square foot. This sale will result in a significant gain that will be reported in the second quarter, and we expect this sale to close next week. The second transaction we announced is the acquisition of a bulk industrial portfolio from affiliates of USA Real Estate, which has recently been reported by others outside of Duke Realty.

This $311 million acquisition includes eight modern bulk industrial facilities totaling over 4.8 million square feet in key distribution markets, including California, Eastern Pennsylvania, and Houston. The portfolio is 100% leased to major retail tenants such as Home Depot, Kimberly-Clark, and JoAnn stores. We expect this transaction to close in May. These two transactions will put us even closer to our asset allocation goal of 60% bulk industrial, 25% suburban office, and 15% medical office. We will report cap rate ranges on these transactions in our second quarter numbers, but let me say that the in-place cap rate on our retail sale is over 100 basis points lower than the yield we will receive on our industrial acquisition. So this is a great trade for us.

We also had an excellent quarter on new development starts. The starts include seven projects, again with an estimated total project cost of about $140 million. We started a 680,000 square foot build-to-suit bulk industrial facility in Nashville on our Park 100 land — or our Park 840 land, excuse me. The facility will be 100% leased to Starbucks for 7.5 years. We also started a 240,000 square foot spec industrial development in Houston on our Point North land, which is located in the airport submarket where vacancy is in the 5% range. We also began a 200,000 square foot office build-to-suit in Dallas, also on our land at Duke Bridges Corporate Park. The project is 100% preleased to a healthcare services firm for a term of 16 years.

Finally, we started the development of four build-to-suit 100% preleased medical facilities during the quarter. Three of the facilities are with affiliates of Baylor Healthcare, totaling 113,000 square feet with lease terms of 15 years. I’m proud to say that we’ve now engaged in 10 development deals with Baylor Healthcare since 2009. The final healthcare development was a 35,000 square foot project in Waco, Texas with Scott and White healthcare. This is our fourth development project with Scott and White. Overall, our first quarter development starts were 81% preleased, and are projected to have a stabilized yield of 8.0%. We are extremely pleased with the new development business generated year-to-date, and by our best-in-class development platform.

Our total development pipeline as of March 31 now stands at 5.1 million square feet totaling $621 million of stabilized costs. We are projecting a weighted average yield over the initial lease term of 8.2% on these projects. The development pipeline and strategic land bank are a key growth driver for Duke Realty, and we’re optimistic about being able to execute on additional build-to-suit and select development opportunities. I’ll now turn the call over to Christie to discuss our financial results and capital plans.

Christie Kelly - Duke Realty Corp - EVP & CFO

Thanks Denny, and good afternoon, everyone. As Denny mentioned, I would like to provide an update on our first quarter financial performance, as well as the progress on our capital strategy. Our first quarter 2013 core FFO was $0.26 per share, compared to $0.27 per share for the fourth quarter of 2012. The slightly lower core FFO was the result of temporary dilution, due to not being immediately able to utilize the proceeds from our previously discussed $41.4 million share equity offering executed in early January. Core FFO for the first quarter of 2013 in comparison to 2012 of $0.24 represents an 8.3% positive year-over-year growth rate that was primarily attributable to improved occupancy and same property performance, as well as due to lower preferred dividends.

We generated $0.23 per share in AFFO in the first quarter of 2013, which translates to a payout ratio of less than 74%, compared to $0.21 per share of AFFO for the fourth quarter of 2012. Taking a look at AFFO for the first quarter of 2013 in comparison to $0.20 from the first quarter of 2012

4

THOMSON REUTERS STREETEVENTS | www.streetevents.com | Contact Us   ©2013 Thomson Reuters. All rights reserved. Republication or redistribution of Thomson Reuters content, including by framing or similar means, is prohibited without the prior written consent of Thomson Reuters. ‘Thomson Reuters’ and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies.

  APRIL 25, 2013 / 07:00PM, DRE - Q1 2013 Duke Realty Earnings Conference Call

represents a 15% positive year-over-year growth rate. Again, that was primarily attributable to improved occupancy and same property performance, as well as due to lower preferred dividends. As Denny mentioned our leasing volume for the quarter was strong. And in summary, our operating results for the quarter were outstanding, and we look forward to continued solid results throughout the rest of the year.

Turning to the capital side of our business, we executed significant transactions during the quarter to build our track record of generating low-cost capital from multiple sources. As we discussed last January, we generated $572 million in proceeds from our $41.4 million share follow-on equity offering. We used a portion of these proceeds to redeem our 8.375% Series O preferred shares, which will reduce our dividend commitments by nearly $15 million annually on an ongoing basis. We enjoyed a successful quarter in terms of generating capital from asset dispositions, receiving $223 million in proceeds from asset sales, in order to pre-fund our May unsecured debt maturities. We opportunistically tapped the unsecured market in mid-March. We issued $250 million of 10-year bonds at an effective interest rate of 3.72%, a record low rate for Duke Realty.

After being used to refinance a portion of our May maturities, this lower rate offering will save us nearly $7 million annually on an ongoing basis. As a result of our capital raising activities, we ended the first quarter with $307 million in cash which, when coupled with an unsecured term loan we will close at the beginning of May, will leave us with more than sufficient liquidity for the repayment of our $425 million of unsecured debt due this mid-May. Additionally, the post-quarter activities that Denny mentioned, represented by the expected USAA acquisition and Pembroke disposition is an excellent example of us funding acquisitions with dispositions accretively. I will conclude by saying that I’m extremely pleased with the results for the quarter, and we will continue to execute on all aspects of our strategy. And with that, I’ll turn it back over to Denny.

Denny Oklak - Duke Realty Corp - Chairman and CEO

Thank you, Christie. Yesterday we also reaffirmed our guidance of FFO for 2013 of $1.03 to $1.11 per share. In closing, after a solid quarter, we believe our value creation story is gaining momentum as our operations continue to show strong occupancy and modest rent growth, our capital raising continues to be highly efficient and consistent with our deleveraging plans, our asset repositioning is in the process of taking another big leap with the first quarter closed dispositions and pending Pembroke and USAA transactions, which we believe are very accretive to our net asset value. Finally, the development platform engine and strategic land bank are also very well-positioned to take advantage of solid growth opportunities for 2013 and beyond. Thank you again for your support of Duke Realty. And now we will open it up for questions.

QUESTION AND ANSWER

Operator

Thank you.

(Operator Instructions)

Brendan Maiorana.

Brendan Maiorana - Wells Fargo Securities - Analyst

Denny, you guys, on the development pipeline the yields seem like they’re getting better. At the same time, you sort of look at the overall environment, and cap rates are coming down. It seems like there would be more likely to be pressure on the development yields as opposed to development yields moving up. So is there something specific that’s going on with the development, or are there any improvements dollars that are getting amortized that are driving yields up? Or are you just getting better economics?

5

THOMSON REUTERS STREETEVENTS | www.streetevents.com | Contact Us   ©2013 Thomson Reuters. All rights reserved. Republication or redistribution of Thomson Reuters content, including by framing or similar means, is prohibited without the prior written consent of Thomson Reuters. ‘Thomson Reuters’ and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies.

  APRIL 25, 2013 / 07:00PM, DRE - Q1 2013 Duke Realty Earnings Conference Call

Denny Oklak - Duke Realty Corp - Chairman and CEO

Generally, I think we are getting better economics right now. And it’s really — it doesn’t have anything to do with the amortization when you look at those projects that we talked about this quarter, for sure. And I would say it’s a couple things going on. One, obviously about 50%, roughly 45%, 50% of our starts this quarter were in the healthcare area. Again, a very significantly business driven on relationships. And so we have great relationships, as I mentioned, with Baylor and Scott and White, but clearly I think that our development yields are pretty competitive. But it’s also relationship driven, and I think that was part of it. When you look at the build-to-suit opportunities that we have on the office side, the yields were a little higher because we’re deploying our land, and I would say the same with the industrial build-to-suits that we’re accomplishing today. So I think that’s another key driver is the very good basis that we have in a lot of our land. So suffice it to say I agree with your comments, Brendan. I think we’re creating a lot of value through that development pipeline right now.

Brendan Maiorana - Wells Fargo Securities - Analyst

Okay. And then the occupancy drop in the quarter, I guess just listening to your comments it sounds like that happened at the end of the quarter. So I guess there probably wasn’t an — if I’m thinking about that correctly, there probably wasn’t an impact on NOI in the quarter, but as we look out over the next few quarters for the year, how do you think occupancy trends, because I guess as it stands now you’re at sort of the low end of your average occupancy target for ‘13?

Denny Oklak - Duke Realty Corp - Chairman and CEO

Yes. I would say there’s two things. Yes, there was a couple things that happened during the quarter. We had some expirations during the quarter, mid-quarter let’s say, that were pretty much immediately backfilled with tenants, but then we had a couple leases near the end of the quarter that expired, but it didn’t have a significant impact on first quarter NOI. It’s unfortunately we have to report on four specific days of the year is the way we report. So our occupancy’s always go up and down a little bit, but we are sort of at the low point at the end of the first quarter, which is kind of where we thought we’d be. So we do have, as I said, there’s a lot of good activity out there. I think particularly on the industrial side business is still strong. So I think you’ll see, again, see that occupancy continue to tick up throughout the rest of the year. And we’ve looked at it pretty closely, and we’re still very comfortable with that occupancy range guidance that we gave for an average occupancy for the year, which was in the 92% to 94% range.

Brendan Maiorana - Wells Fargo Securities - Analyst

Okay, that’s helpful. And then just the last one I had was for Christie. I was looking at your same-store in the disclosure on page 21 of the supplemental. Am I reading it correctly, that there is 180 basis point improvement in occupancy in the portfolio in the Q1 ‘13 versus Q1 ‘12?

Christie Kelly - Duke Realty Corp - EVP & CFO

Yes, you are, Brendan.

Brendan Maiorana - Wells Fargo Securities - Analyst

So I guess I was just trying to reconcile that with last year’s occupancy numbers, because I thought that they were — I didn’t think the occupancy moved around that much. Even with the adjustments in the pool that would have happened, it didn’t seem like there was a whole lot of movement. Is there something else going on there that maybe we don’t see as we’re thinking about the same store pool last year versus this year?

Christie Kelly - Duke Realty Corp - EVP & CFO

No, nothing. We’re just chatting quickly here amongst ourselves, Brendan. And there’s nothing really of note.

6

THOMSON REUTERS STREETEVENTS | www.streetevents.com | Contact Us   ©2013 Thomson Reuters. All rights reserved. Republication or redistribution of Thomson Reuters content, including by framing or similar means, is prohibited without the prior written consent of Thomson Reuters. ‘Thomson Reuters’ and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies.

  APRIL 25, 2013 / 07:00PM, DRE - Q1 2013 Duke Realty Earnings Conference Call

Brendan Maiorana - Wells Fargo Securities - Analyst

Okay. I mean, okay. Maybe we can take that offline because I’m having trouble looking at last year’s numbers and seeing why there would be that much adjustment.

Christie Kelly - Duke Realty Corp - EVP & CFO

Sure. We can talk offline again.

Brendan Maiorana - Wells Fargo Securities - Analyst

Okay. All right. Thanks.

Christie Kelly - Duke Realty Corp - EVP & CFO

No worries.

Operator

Dave Rodgers.

Dave Rodgers - RBC Capital Markets - Analyst

I guess with regard to the development pipeline, Denny, you talk about $620 million under construction today, a pretty good yield. Where do you see that going throughout the year? And I guess as you tie into that, we’ve seen, especially on the industrial side, more and more spec construction, I guess what you undertook a little bit this quarter. So I guess talk about where you, say, see the overall pipeline going this year, and how spec will play into that?

Denny Oklak - Duke Realty Corp - Chairman and CEO

Sure, Dave. I think you’re going to see that pipeline likely stay at a pretty stable level, that $500 million to $700 million range. We monitor that pretty closely, and actually don’t want to get that up too high as a percent of our overall asset base. However, I think the other thing strategically that you’ve seen from us is almost — I mean, a very significant portion of our development now is 100% pre-leased the projects. So we’re still going to obviously try to find as many of those kind of accretive transactions as we can do. We’ve really been fairly limited on the spec development so far in this point in the cycle. We’ve really started four projects in the last, I’d say, I guess it’s been about 9 months, 9 to 12 months. We started the one office building I mentioned in Houston, which is now 91% leased and will open up in July.

We started now three spec industrial buildings, one in Indianapolis, one in California, and now just started one in Houston. And those total about 1.25 million square feet. We have no leases signed in those yet. We’ve got a couple proposals out on the California project. We’ve on and off had some activity on the Indianapolis project. And then actually have some pretty good activity on the Houston project, even though we’re just really getting started and breaking ground on that one. So I think you’re going to see us still be fairly conservative on the spec development side. You might see another project or two before the end of the year, but some of that’s really going to depend, too, on how we do on leasing up some of those projects we’ve already started. So that’s really, I think, where we are and what we are looking at from the development side.

7

THOMSON REUTERS STREETEVENTS | www.streetevents.com | Contact Us   ©2013 Thomson Reuters. All rights reserved. Republication or redistribution of Thomson Reuters content, including by framing or similar means, is prohibited without the prior written consent of Thomson Reuters. ‘Thomson Reuters’ and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies.

  APRIL 25, 2013 / 07:00PM, DRE - Q1 2013 Duke Realty Earnings Conference Call

Dave Rodgers - RBC Capital Markets - Analyst

Thanks. And then maybe for Christie, just in terms of it seems like the appetite for office assets is up in terms of your ability to sell. Maybe talk about where some of the funding will come from throughout the course of the year, if you can, related to the asset sales program?

Christie Kelly - Duke Realty Corp - EVP & CFO

Sure, Dave. As it relates to the guidance in terms of office dispositions, we are a net disposer this year as you look at the midpoint of guidance. And we’re on track to deliver as it relates to those dispositions, and our focus for this year is on, as you stated, Midwest Office as well as retail, as demonstrated by the Pembroke disposition.

Denny Oklak - Duke Realty Corp - Chairman and CEO

Yes. Just to add to that, if you look at our office dispositions so far, it’s the two bigger projects in Raleigh, and then the Chambers Street portfolio. Those were obviously really funded with, mostly with institutional equity, I would say. Some debt potentially, but most of it was equity. And looking at some of the dispositions that we plan on the office side this year, I think what we’re likely to see again is secured debt funding mortgage debt. My guess is you’re not — it won’t be consist of CMBS much because there are going to probably be smaller portfolios, but I think we’ve seen both the banks and the insurance companies fairly active in that market right now.

Christie Kelly - Duke Realty Corp - EVP & CFO

Yes, and to the point that Denny’s making, I mean, that really is a change that we’ve seen over the past year to 18 months.

Dave Rodgers - RBC Capital Markets - Analyst

So, I guess, should I take from those comments that if LTVs are generally higher than they had been and rates are lower, that the 7.75%, wherever you were in this quarter for the office asset sales, is fairly achievable for the remainder of the year?

Denny Oklak - Duke Realty Corp - Chairman and CEO

Well, I think it just depends on what the mix ends up being. Those were, I would say, probably on the lower end of the cap rate scale, but I think you’ll probably again see most of our office dispositions in that low to mid-eight kind of cap rate range, and again on in-place income.

Dave Rodgers - RBC Capital Markets - Analyst

Okay. Great. Thanks.

Operator

Josh Attie.

Josh Attie - Citigroup - Analyst

Denny, in your prepared remarks you mentioned that industrial fundamentals seemed to be getting better. But for your portfolio, same-store growth is going to moderate over the next few quarters, and I understand that some of your industrial properties are probably approaching high occupancy levels, but why would rent growth slow? And I guess what are some of the items that you expect to weigh on the same store?

8

THOMSON REUTERS STREETEVENTS | www.streetevents.com | Contact Us   ©2013 Thomson Reuters. All rights reserved. Republication or redistribution of Thomson Reuters content, including by framing or similar means, is prohibited without the prior written consent of Thomson Reuters. ‘Thomson Reuters’ and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies.

  APRIL 25, 2013 / 07:00PM, DRE - Q1 2013 Duke Realty Earnings Conference Call

Denny Oklak - Duke Realty Corp - Chairman and CEO

Well, I think when you look at the overall portfolio, just talking about industrial, we’ve been running at a pretty high occupancy level when you look at that. We were almost to 95%. We dropped down a little bit under 94% at the end of this quarter because of the couple of those lease expirations. So even in — I think in — at this point in the economy, and with the type of GDP growth we’re looking at this year, that portfolio’s probably the best we’re going to get is probably 95%, 96% right now. I think when you look at it, I think we will see modest rent growth across most of our industrial markets, but remember, a couple things I would say.

One is, we’ve only got, I think, 7% lease expirations of our overall portfolio for the rest of the year. So we are not going to see tremendous growth out of that portfolio from rental increases on leases rolling. And then second, we have solid growth in the industrial business because most of our leases today now in most of our markets have annual rent bumps. So those rent bumps are anywhere from probably 1.75% to 3% annual rent bumps. So those will be helping to drive our continued same property performance, as long as we hold up where our occupancy points are anticipated.

Josh Attie - Citigroup - Analyst

Thanks, that makes sense. And could you just tie that back to guidance? I know the guidance is based on a same-store growth range of 1% to 4%, and you did 2.5% in the first quarter. So if it’s going to moderate from there, should we assume that both the same-store and the FFO guidance trend toward the lower end of the range?

Denny Oklak - Duke Realty Corp - Chairman and CEO

No. I don’t think so. I mean, I think we’re going to be sort of in the middle of that range. I will tell you what drives that number, unfortunately more than others it’s just harder to predict, is the dispositions. That’s why we always have to give a wider range than maybe we would like, because we just don’t know which of our same properties we’re going to sell during the year. So that can have an effect, depending on which properties you sell. But sitting here today, looking at what we’ve sold so far, and what we anticipate selling, and then what we anticipate happening in the remaining portfolio, I think towards the middle of that range is a good number for the rest of the year.

Josh Attie - Citigroup - Analyst

Okay. Thanks very much.

Operator

Vincent Chao.

Vincent Chao - Deutsche Bank - Analyst

Just a quick question. Denny, you had alluded to, I think, the Chino project earlier in terms of some people kicking the tires. I was just wondering if you expand upon what kind of activity you’re seeing there, types of users, and maybe what’s causing or preventing them from pulling the trigger on taking some space there?

Denny Oklak - Duke Realty Corp - Chairman and CEO

Well, I think first thing I’d point out is we just really finished that up early this year, probably in February some time. So it’s relatively still fresh on the market. Again, there has been good activity in the Southern California market. We’ve seen a fair amount of leasing. I think if you look at the

9

THOMSON REUTERS STREETEVENTS | www.streetevents.com | Contact Us   ©2013 Thomson Reuters. All rights reserved. Republication or redistribution of Thomson Reuters content, including by framing or similar means, is prohibited without the prior written consent of Thomson Reuters. ‘Thomson Reuters’ and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies.

  APRIL 25, 2013 / 07:00PM, DRE - Q1 2013 Duke Realty Earnings Conference Call

leasing statistics out there for the first quarter, some very good activity is what you’ll see. It’s just -- it just depends in that situation. We’re likely going to lease that building to a single user, in my opinion. That’s a 420,000 square foot building, which is kind of the sweet spot for a distributor. So it’s just finding that right tenant. We’ve talked to a couple of retailers about it. We’ve actually talked to a governmental agency about leasing the whole thing, also. So I think it’s fairly broad user base out there. And we’re very focused on getting that one leased up.

Vincent Chao - Deutsche Bank - Analyst

Okay. And at this point, is the relative underwriting for that project? Are you still on track, or is it may be slipping a little bit in terms of timing?

Denny Oklak - Duke Realty Corp - Chairman and CEO

No, it’s not slipping.

Vincent Chao - Deutsche Bank - Analyst

Not slipping, okay. And then maybe if I could ask a similar question, just in terms of Atlanta overall. I mean, obviously that’s a tougher market, but can you provide some color on what you’re seeing there, and it looks like one of the late quarter move-outs might have been from that market on the industrial side?

Denny Oklak - Duke Realty Corp - Chairman and CEO

It was. We had about a 300,000 square foot tenant leave right near the end of the quarter in one of the buildings, which was really most of the decrease in occupancy in Atlanta this quarter. I guess overall my comment on Atlanta would be that market’s been relatively slow, and I think slower than some of the other industrial markets so far. When you think back on it, just about a year ago we signed 1 million square foot lease at our Braselton project with Carter’s for their e-commerce distribution. And that was a big deal, obviously, for us there. Since then, it’s been a little bit slow, but in talking to our folks in Atlanta, they are starting to feel like things could pick up here pretty shortly, and things could get better in the second and third quarter. A lot more people out in the market beginning to talk about leasing some space here soon. So I think we anticipate that occupancy improving in the second half of this year. So, but clearly it has been slower than some of the other markets.

Vincent Chao - Deutsche Bank - Analyst

Okay. Thank you.

Operator

(Operator Instructions)

Eric Frankel.

Eric Frankel - Green Street Advisors - Analyst

I would like to discuss, given the repositioning plan, your long-term thoughts for some of the office build-to-suits you guys are working on? Where do you think the eventual home of those properties are?

10

THOMSON REUTERS STREETEVENTS | www.streetevents.com | Contact Us   ©2013 Thomson Reuters. All rights reserved. Republication or redistribution of Thomson Reuters content, including by framing or similar means, is prohibited without the prior written consent of Thomson Reuters. ‘Thomson Reuters’ and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies.

  APRIL 25, 2013 / 07:00PM, DRE - Q1 2013 Duke Realty Earnings Conference Call

Denny Oklak - Duke Realty Corp - Chairman and CEO

I think it depends. When you think about a couple, I mean, the two, the bigger ones that we worked on are this Primerica built-to-suit in Atlanta, which we just completed on time, and they’ve now moved in and are extremely happy with the facility. And on that one I would say that’s on land that we own in our legacy park up in Gwinnett County. We’ve got room for a couple more buildings there. We’ve actually had other -- some other discussions there on possible build-to-suits. So I think it’s probably likely we might hold that one for a little while as we potentially build out the rest of that park. As you may recall, that was a 15-year lease with them. So we’ve got, obviously, plenty of time on the lease. I think there’s a nice annual rent bumps in that one also. And then the other one we signed up at our Duke Bridges Park up in Frisco in Dallas, 200,000 square feet project on a 16-year lease.

We’ve got two more sites available in that park. And then this tenant actually has an expansion option onto a site next door for, I think it’s 18 or 24 months out. So I think once we complete that, I think you’ll likely see us hold that one at least through the time that they have the expansion option. So I think it’s going to be a case-by-case basis, Eric. They’re all -- they’re really good projects, but as you know we’re downsizing the office business. And the truth is in Atlanta and Dallas, for example, both those were part of our Blackstone transaction. So we sold substantially all of our other assets in those markets, other than some other ones, a couple we had in other joint ventures. So, but these build-to-suit office buildings don’t require -- they’re not really that hard to manage because it’s a single tenant. So I just think it’s probably not answering your question, but I think it’s just going to be a case-by-case basis.

Eric Frankel - Green Street Advisors - Analyst

Okay. I really do appreciate the color. Also just curious about the medical office portfolio. What you think the occupancy trajectory is going to be over the couple years? It just seem to be staying kind of flat over the last few quarters.

Denny Oklak - Duke Realty Corp - Chairman and CEO

Well, I think yes, it has. And some of that was because we were -- some of our development, we were developing with some vacancy in it. And so most of what we signed here recently has been 100% leased. So that’s not contributing to that vacancy, obviously, but I think the leasing activity is pretty good. We bought a little bit of vacancy when we bought the Seavest portfolio last year, and we’re actually, I think, looks like we are going to be ahead of schedule on leasing up some of that space. So my thoughts today would be, you’re going to see that occupancy probably start moving closer to the 94%, 95% range, and likely stay in that area for a while.

Eric Frankel - Green Street Advisors - Analyst

Great. Thank you. One then final question. Just given your thoughts on market rent and its growth trajectory, just want to get a feel for what you think the mark-to-market rent is for your portfolio.

Denny Oklak - Duke Realty Corp - Chairman and CEO

Well, people ask us that quite a bit. It’s, again, a little bit hard to say, because we’ve got so many different markets and submarkets and kind of buildings. But in general today, where we are in the cycle, and when you look at when we signed leases that are beginning to roll now, I would say our rents in place are probably a little bit below market, and I’m saying maybe 5% to 7% below market today on what’s in place, but again, it’s going to vary market and submarket a little bit.

Eric Frankel - Green Street Advisors - Analyst

Great. Thank you. Appreciate it.

11

THOMSON REUTERS STREETEVENTS | www.streetevents.com | Contact Us   ©2013 Thomson Reuters. All rights reserved. Republication or redistribution of Thomson Reuters content, including by framing or similar means, is prohibited without the prior written consent of Thomson Reuters. ‘Thomson Reuters’ and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies.

  APRIL 25, 2013 / 07:00PM, DRE - Q1 2013 Duke Realty Earnings Conference Call

Operator

Scott O’Donnell.

Scott O’Donnell - State Street Realty Advisors - Analyst

A question for Christie. The last two debt offerings you did were at 3.375 and 3.625. I can’t for the life of me figure why you’d be turning to the bank term loan market right now, with the markets very efficient from a funding perspective.

Christie Kelly - Duke Realty Corp - EVP & CFO

Yes, Scott. Thanks for that question. I mean, I think when we take a look at the term loan, there are a couple of things. First, we’re looking at a five-year term loan, we’re looking at doing floating-rate paper, and it’s very accretive based on our yield curve right now. And we really don’t have any floating-rate debt to speak of whatsoever in our capital stack. So when you take a look at, A, yes what we’ve been able to execute, and, B, threading in a nice little 5-year for a 2018 maturity, that fits in really nicely with our maturity ladder at very attractive rates, it makes sense for us to do.

Scott O’Donnell - State Street Realty Advisors - Analyst

So there will be no swapping of that deal and no capping of the deal?

Christie Kelly - Duke Realty Corp - EVP & CFO

No. There won’t be any swapping of the deal at the get go. I mean, to the extent that we need to fix it, we’ll take care of that as we see rates move.

Scott O’Donnell - State Street Realty Advisors - Analyst

Thank you.

Operator

Michael Salinsky.

Michael Salinsky - RBC Capital Markets - Analyst

Just to go back to the [following] question, you talk about spreads. I think you said up 2%. At what occupancy level you get a little bit more comfortable pushing that a little bit more?

Denny Oklak - Duke Realty Corp - Chairman and CEO

I think, again, it always comes back to me to what the demand is. Even when our occupancies are at 95%, 98%, which when you look at a number of our industrial markets today we’re there, still not necessarily a big pressure to raise rates until that demand really starts picking up. So I think we’re going to have to see some more of that demand picking up. And it’s, occupancy is good, but it’s not like we have a huge backlog of tenants wanting new space. That’s why you’re still seeing relatively limited spec development in most markets. So I think we’re going to -- we’ll start seeing that as we start seeing a little bit more demand pick up.

12

THOMSON REUTERS STREETEVENTS | www.streetevents.com | Contact Us   ©2013 Thomson Reuters. All rights reserved. Republication or redistribution of Thomson Reuters content, including by framing or similar means, is prohibited without the prior written consent of Thomson Reuters. ‘Thomson Reuters’ and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies.

  APRIL 25, 2013 / 07:00PM, DRE - Q1 2013 Duke Realty Earnings Conference Call

Michael Salinsky - RBC Capital Markets - Analyst

Okay. That’s helpful. Just going back to your original capital plans for the year. I mean, did the shares have about 25% year-to-date, and (technical difficulties)

Denny Oklak - Duke Realty Corp - Chairman and CEO

I’m sorry. I think we --

Christie Kelly - Duke Realty Corp - EVP & CFO

Hello?

Denny Oklak - Duke Realty Corp - Chairman and CEO

Did we lose you?

Operator

Mr. Salinksky’s line is still connected. Mr. Salinsky, could you check your phone for a phone for a mute feature?

Michael Salinsky - RBC Capital Markets - Analyst

Can you hear me?

Denny Oklak - Duke Realty Corp - Chairman and CEO

Yes.

Christie Kelly - Duke Realty Corp - EVP & CFO

Now we can.

Michael Salinsky - RBC Capital Markets - Analyst

Okay. Sorry about that. Just going back, with the share price up 25% year-to-date, and also given the success you guys have had on disposition front relative to the development yields, the 8% that you quoted there. Is there any thoughts on maybe accelerating your development starts for the year, and maybe recycling a bit more, or going out and maybe being a bit more aggressive on reducing leverage?

Denny Oklak - Duke Realty Corp - Chairman and CEO

Well, I guess let me start on the development side. I mean, I think we’re doing all the prudent development today that we think is out there. In other words, we focused on the build-to-suit market, going back to my comments on spec. And so, as I said, I think we’re not really afraid to do really good build-to-suit deals on both the MOB and the industrial side, and an occasional office one mixed in there maybe on our land. So we’ll keep pushing those as much as we can. And then on the disposition side, I think we’ve got a fairly significant disposition plan for the year, and we’ve executed, we had a great first quarter, and now with the Pembroke sale looking to close here before the end of the month, that’s a pretty good four-month start at almost $400 million.

13

THOMSON REUTERS STREETEVENTS | www.streetevents.com | Contact Us   ©2013 Thomson Reuters. All rights reserved. Republication or redistribution of Thomson Reuters content, including by framing or similar means, is prohibited without the prior written consent of Thomson Reuters. ‘Thomson Reuters’ and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies.

  APRIL 25, 2013 / 07:00PM, DRE - Q1 2013 Duke Realty Earnings Conference Call

But one of the things I think you will see us do is sort of look through the portfolio a little more carefully as we’re going, and take advantage of -- potentially take advantage of some opportunities where we think we’ve created a fair amount of value, and then move some of those properties if the timing is right, especially timing for reinvestment. If we think we can have use of the proceeds, either to reinvest in new development or to delever as we have debt maturities coming up. I think we’ll probably look at that, but I wouldn’t say we have anything specific in mind right now.

Michael Salinsky - RBC Capital Markets - Analyst

Okay. So no changes to the investment plan relatively early in the year?

Denny Oklak - Duke Realty Corp - Chairman and CEO

No, I don’t think so.

Michael Salinsky - RBC Capital Markets - Analyst

Okay. Thank you.

Operator

Brendan Maiorana.

Brendan Maiorana - Wells Fargo Securities - Analyst

Denny, just to sort of follow-up a little bit on the disposition outlook, and we’ve talked about this a bit in the past, but if you’ve got a nice MOB franchise as we sort think about it, but it doesn’t fit that neatly into your portfolio mix. At the same time, pricing for MOB assets seems to be at an all-time high. There seems to be a lot of interest in the space. Is there a way to sort of harvest some of that value via a JV or something, some form like that where you don’t have to give up the upside that you seem to be creating a lot on the development pipeline, but you can maybe harvest some of the value that’s been created on the developments that have been done thus far, and it would be a way to sort of accelerate the deleveraging that you expect to do over the next few years?

Denny Oklak - Duke Realty Corp - Chairman and CEO

Well, I would first respond to that by saying I think it does fit in fairly nicely and neatly within our portfolio, because again, it’s a very stable product type, very -- really good same property growth, as you can see from the performance of that portfolio over the last year and the last few quarters, it’s really doing well. So when a property type is performing that well, I think it fits into my strategy. So, and obviously we have the platform in place to do the development and continue to grow that business. So, but having said that, I think there is an opportunity there. We’ve been building that portfolio on the development side now for about six, seven years. And as we look back through that portfolio, there’s probably a couple properties that are in there that we developed early in that cycle that might make less sense for us strategically than they did back then.

So I think you’ll see us really look at -- keep a close eye on that portfolio. You might see a few assets move here or there, but again, I think you’re going to continue to see us grow that portfolio. And just in light of that, we sold to two buildings out of our MOB portfolio this quarter. And those were actually two buildings that we got in the Seavest transaction that we knew when we bought them weren’t really strategic for us, they were located in truly non-core markets. They had good tenancy and long-term leases. And they were probably 25- to 30-year-old buildings. So we moved, I would say, fairly rapidly to go ahead and relist those properties. And sold them at a little bit over what we had allocated to that. So it was a good deal for us, and again, they didn’t fit in strategically. So I think you’ll see us continue to look at that.

14

THOMSON REUTERS STREETEVENTS | www.streetevents.com | Contact Us   ©2013 Thomson Reuters. All rights reserved. Republication or redistribution of Thomson Reuters content, including by framing or similar means, is prohibited without the prior written consent of Thomson Reuters. ‘Thomson Reuters’ and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies.

  APRIL 25, 2013 / 07:00PM, DRE - Q1 2013 Duke Realty Earnings Conference Call

Brendan Maiorana - Wells Fargo Securities - Analyst

So if I hear your comments correctly on the MOB portfolio, is that suggest that this is, as you think about the business long-term, several years out, this is the part of the portfolio that stays within the business for -- as you sort of see it into the future?

Denny Oklak - Duke Realty Corp - Chairman and CEO

Yes. I think we’ve stated that, I think, in our asset strategy that we’ve been talking about here. Our original target for that was about 15%. We are kind of right there, maybe even a little bit higher than that, because of some of the bigger transactions we did, but I think you’re going to see that portfolio stay in that range. And I think overall as we look for opportunities to grow the Company overall, then I think you will continue to see that MOB portfolio grow, but stay in that kind of a range of percentage of the overall company, 15% to 20%.

Brendan Maiorana - Wells Fargo Securities - Analyst

Sure, okay. And then the flipside of that is sort of looking at acquisitions, or the flipside my question, I guess, would be looking at acquisitions. Do you think as we look at this USAA deal, a large portfolio deal, stabilize. Do you think when you look at growth of the Company from here, given that you are pretty darn close to the 60/15/25 portfolio breakdown allocation, that large portfolio deals are still likely to happen for Duke? Or do you think you’re largely done with that, and most of the growth comes via development and kind of one-off deals?

Denny Oklak - Duke Realty Corp - Chairman and CEO

I think it depends. First of all, I would say that I think growth definitely will come through new development, build-to-suit industrial deals, some speculative industrial building, and pretty much on land that we own, because we can do, I don’t know, I think it’s 40 million square feet of industrial, roughly, on our -- the land that we own today. So you’re going to see us continue to grow there. I think you probably will see us do some one-off acquisitions in key target markets, which we’ve been doing. Again, just kind of depends. We’ve looked at a whole lot more, and seen a whole lot more transactions than we’ve actually executed on, when you look at it over the last two or three years. As far as the portfolio deals go, again I think it depends.

There’s -- we have a great presence in most of the major distribution markets in the country now, but there’s a couple where we’d still like to continue to grow. And if we saw a portfolio transaction that we thought would really help us grow in a certain area of the country, or certain of those markets that we don’t -- we feel like we’re underweight in, then I think we would certainly consider that. And again, just looking at the USAA portfolio, very -- I mean, strategically for us, a very good transaction because a significant piece of it in California, Northeast, Houston, where those are locations that we’re trying to build our portfolio. So that worked out very well for us.

Brendan Maiorana - Wells Fargo Securities - Analyst

Sure. Then just last one. The cap rate, the cap rate spread differential that you talk about between the USAA deal and the Pembroke deal. Was that both cash and GAAP 100 basis point spread, or was it just one or the other?

Denny Oklak - Duke Realty Corp - Chairman and CEO

Cash.

15

THOMSON REUTERS STREETEVENTS | www.streetevents.com | Contact Us   ©2013 Thomson Reuters. All rights reserved. Republication or redistribution of Thomson Reuters content, including by framing or similar means, is prohibited without the prior written consent of Thomson Reuters. ‘Thomson Reuters’ and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies.

  APRIL 25, 2013 / 07:00PM, DRE - Q1 2013 Duke Realty Earnings Conference Call

Brendan Maiorana - Wells Fargo Securities - Analyst

Okay. Great. Thank you.

Operator

Josh Attie.

Michael Bilerman - Citigroup - Analyst

It’s Michael Bilerman. Good afternoon. Just a question on the USAA portfolio. I guess the brokerage community is sort of painting it as a sort of portfolio premium, very rich pricing. I guess how do you respond to that? And maybe you can talk about how you sort of look at pricing for that portfolio?

Denny Oklak - Duke Realty Corp - Chairman and CEO

Sure. I would say that was a competitively bid process there. So I would say there was a number of other competitors on that portfolio. So I think it was truly market pricing. I don’t know that I would agree that there’s a portfolio premium to it. I mean, it sort of is what it is. And they’re all really good projects. When you look at it, I think our basis, if you look at that, is going to be just around $65 a foot overall for that portfolio. We do a lot of looking at replacement costs, and I think we’re -- we really believe we bought that portfolio right in the range of replacement costs, and again all very good markets, very good buildings. So I’m not saying it wasn’t a market deal. I think it was a market deal, but I think it was a good fair deal for us. We are very comfortable with the pricing on it and our basis. And so that’s about all I can say. Great property.

Michael Bilerman - Citigroup - Analyst

And where does that work out, I guess, on an initial, it’s 100% leased. So where, I guess, where are rents sort of relative to market? And what is that initial yield that you’re buying at?

Denny Oklak - Duke Realty Corp - Chairman and CEO

Well, I would say rents are really right about market in most of those buildings, what we think market is today. I think the average remaining term on those leases is probably six or seven years. And again, all of them have annual rental rate bumps. I would say the rental rate bumps are in the neighborhood of 1.5% to 2%, 2% to 3%, I guess.

Christie Kelly - Duke Realty Corp - EVP & CFO

That’s right.

Denny Oklak - Duke Realty Corp - Chairman and CEO

And I said, we typically don’t disclose yields on specific transactions, Michael, just because of competitive nature. So it will be disclosed in our second quarter numbers, along with our other acquisitions, but all’s I would say, I think it’s -- the numbers I’ve seen out there publicly are probably in the range.

16

THOMSON REUTERS STREETEVENTS | www.streetevents.com | Contact Us   ©2013 Thomson Reuters. All rights reserved. Republication or redistribution of Thomson Reuters content, including by framing or similar means, is prohibited without the prior written consent of Thomson Reuters. ‘Thomson Reuters’ and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies.

  APRIL 25, 2013 / 07:00PM, DRE - Q1 2013 Duke Realty Earnings Conference Call

Michael Bilerman - Citigroup - Analyst

Okay. And then just, I just wanted to come back to sort of the guidance for just to really understand the moving pieces, because it sounds like the acquisition [for us], just the recent activity, I guess when you look at the retail sale and some of the office buildings, the Chambers Street could be maybe even accretive, or net neutral relative to the acquisition volumes that you’re doing. And it sounds like going floating rate debt would be accretive. And so are we to take it that operations are a little bit behind for the guidance not to move?

Denny Oklak - Duke Realty Corp - Chairman and CEO

No. I don’t think so. I think our operations are really pretty much in line so far this year with where we anticipated them to be. Michael, you know I’m not going to move our guidance in the first quarter. I mean, we’ve set a fairly broad range, usually. We’ve tightened it up the last couple years a little bit, and -- but we’ve got a lot of moving pieces and parts as we go through this disposition and potential acquisition and development. So there’s just a lot of moving pieces and parts in the numbers. So I’m just never inclined to really try to change it this early in the year unless something major would happened that we knew had a significant effect. So we’ll obviously look again at the end of the next quarter, and think about where we are and see how the year’s progressing, and every quarter we reconsider that annual guidance. And if we think it’s appropriate to change it, we’ll do that. But right now I think operations are actually probably just a little bit ahead of where we thought they would be.

Christie Kelly - Duke Realty Corp - EVP & CFO

And to that point, Michael, we highlighted not only the year-over-year growth in FFO and AFFO, but we’ve done that on the backs of moving significant dispositions as well as delevering. So when you take a look at the fundamental operations and the leasing momentum, it’s been very strong. So I would absolutely agree with Denny, that we are actually a little bit ahead of where we thought we were going to be.

Michael Bilerman - Citigroup - Analyst

Okay. Thank you.

Operator

Michael Salinsky.

Michael Salinsky - RBC Capital Markets - Analyst

Just to go back to dispositions, since you sold both portfolio and one-offs. Any noticeable difference between portfolio pricing versus one-off sales?

Denny Oklak - Duke Realty Corp - Chairman and CEO

No. I don’t think so. Each disposition, each transaction has its own story. So it’s a little hard to say, but I think for that specific question, Mike, the difference between single assets or portfolios, not really.

Michael Salinsky - RBC Capital Markets - Analyst

Okay. Then the second question, taking maybe the both of the industrial portfolio a little bit. Looking at some of the smaller block space, have you seen any change in demand, just as we see in the single-family housing market pick up over the last couple quarters, and how much opportunity do you see there in terms of driving towards your occupancy targets for 2013?

17

THOMSON REUTERS STREETEVENTS | www.streetevents.com | Contact Us   ©2013 Thomson Reuters. All rights reserved. Republication or redistribution of Thomson Reuters content, including by framing or similar means, is prohibited without the prior written consent of Thomson Reuters. ‘Thomson Reuters’ and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies.

  APRIL 25, 2013 / 07:00PM, DRE - Q1 2013 Duke Realty Earnings Conference Call

Denny Oklak - Duke Realty Corp - Chairman and CEO

Yes. I think clearly you’re starting to hear a lot of chatter about that. Have heard it in various conferences, and seen it in some of the other industrial folks’ public discussions or releases. I think it’s true. We’re seeing some of that. And again, it varies a little bit from market to market. I would say clearly in South Florida, which is that whole economy there is driven by a lot of development and construction, it’s a fairly big part about that -- of that economy down there. And that market’s coming back, particularly I would say on the multifamily or the condominium market in South Florida is really coming back. So we’re starting to see some of those types of tenants come back into the market, and I think we’ll continue to see that. My sense is throughout the rest of this year as the economy improves and housing market continues to pick up.

Michael Salinsky - RBC Capital Markets - Analyst

Thank you.

Operator

Speakers, we have no further questions in queue at this time.

Ron Hubbard - Duke Realty Corp - VP, IR

I’d like to thank everyone for joining the call today. We look forward to seeing many of you at the NAREIT conference in June in a little over a month. Or if not, we’ll reconvene during our second quarter call, tentatively scheduled for August 1. Thanks, everyone.

Operator

Ladies and gentlemen, that will conclude your conference call for today. Thank you for your participation, and for using AT&T’s executive teleconference service. You may now disconnect.

DISCLAIMER

Thomson Reuters reserves the right to make changes to documents, content, or other information on this web site without obligation to notify any person of such changes.

In the conference calls upon which Event Transcripts are based, companies may make projections or other forward-looking statements regarding a variety of items. Such forward-looking statements are based upon current expectations and involve risks and uncertainties. Actual results may differ materially from those stated in any forward-looking statement based on a number of important factors and risks, which are more specifically identified in the companies’ most recent SEC filings. Although the companies may indicate and believe that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate or incorrect and, therefore, there can be no assurance that the results contemplated in the forward-looking statements will be realized.

THE INFORMATION CONTAINED IN EVENT TRANSCRIPTS IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY’S CONFERENCE CALL AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE CONFERENCE CALLS. IN NO WAY DOES THOMSON REUTERS OR THE APPLICABLE COMPANY ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY EVENT TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY’S CONFERENCE CALL ITSELF AND THE APPLICABLE COMPANY’S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

© 2013 Thomson Reuters. All Rights Reserved.

18

THOMSON REUTERS STREETEVENTS | www.streetevents.com | Contact Us   ©2013 Thomson Reuters. All rights reserved. Republication or redistribution of Thomson Reuters content, including by framing or similar means, is prohibited without the prior written consent of Thomson Reuters. ‘Thomson Reuters’ and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies.