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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Duke Realty Corporation | NYSE:DRE | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 48.20 | 0 | 01:00:00 |
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Indiana (Duke Realty Corporation)
|
|
35-1740409 (Duke Realty Corporation)
|
Indiana (Duke Realty Limited Partnership)
|
|
35-1898425 (Duke Realty Limited Partnership)
|
(State or Other Jurisdiction
of Incorporation or Organization)
|
|
(I.R.S. Employer
Identification Number)
|
600 East 96
th
Street, Suite 100
Indianapolis, Indiana
|
|
46240
|
(Address of Principal Executive Offices)
|
|
(Zip Code)
|
Duke Realty Corporation
|
Yes
x
|
No
o
|
|
Duke Realty Limited Partnership
|
Yes
x
|
No
o
|
Duke Realty Corporation
|
Yes
x
|
No
o
|
|
Duke Realty Limited Partnership
|
Yes
x
|
No
o
|
Large accelerated filer
x
|
Accelerated filer
o
|
Non-accelerated filer
o
|
Smaller reporting company
o
|
Emerging growth company
o
|
Large accelerated filer
o
|
Accelerated filer
o
|
Non-accelerated filer
x
|
Smaller reporting company
o
|
Emerging growth company
o
|
Duke Realty Corporation
|
Yes
o
|
No
x
|
|
Duke Realty Limited Partnership
|
Yes
o
|
No
x
|
Class
|
|
Outstanding Common Shares of Duke Realty Corporation at May 3, 2018
|
Common Stock 0.01 par value per share
|
|
357,030,140
|
•
|
enhances investors' understanding of the General Partner and the Partnership by enabling investors to view the business as a whole in the same manner as management views and operates the business;
|
•
|
eliminates duplicative disclosure and provides a more streamlined and readable presentation of information since a substantial portion of the Company's disclosure applies to both the General Partner and the Partnership; and
|
•
|
creates time and cost efficiencies through the preparation of one combined report instead of two separate reports.
|
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Page
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Duke Realty Corporation:
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Duke Realty Limited Partnership:
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Duke Realty Corporation and Duke Realty Limited Partnership:
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March 31,
2018 |
|
December 31,
2017 |
||||
|
(Unaudited)
|
|
|
||||
ASSETS
|
|
|
|
||||
Real estate investments:
|
|
|
|
||||
Real estate assets
|
$
|
6,608,594
|
|
|
$
|
6,593,567
|
|
Construction in progress
|
441,484
|
|
|
401,407
|
|
||
Investments in and advances to unconsolidated joint ventures
|
121,576
|
|
|
126,487
|
|
||
Undeveloped land
|
259,842
|
|
|
226,987
|
|
||
|
7,431,496
|
|
|
7,348,448
|
|
||
Accumulated depreciation
|
(1,238,688
|
)
|
|
(1,193,905
|
)
|
||
Net real estate investments
|
6,192,808
|
|
|
6,154,543
|
|
||
|
|
|
|
||||
Real estate investments and other assets held-for-sale
|
21,740
|
|
|
17,550
|
|
||
|
|
|
|
||||
Cash and cash equivalents
|
160,861
|
|
|
67,562
|
|
||
Accounts receivable, net of allowance of $1,626 and $1,709
|
21,939
|
|
|
19,427
|
|
||
Straight-line rent receivable, net of allowance of $6,104 and $5,254
|
97,266
|
|
|
93,005
|
|
||
Receivables on construction contracts, including retentions
|
16,692
|
|
|
13,480
|
|
||
Deferred leasing and other costs, net of accumulated amortization of $208,092 and $209,451
|
297,103
|
|
|
292,682
|
|
||
Restricted cash held in escrow for like-kind exchange
|
59,196
|
|
|
116,405
|
|
||
Notes receivable from property sales
|
386,789
|
|
|
426,657
|
|
||
Other escrow deposits and other assets
|
173,280
|
|
|
186,885
|
|
||
|
$
|
7,427,674
|
|
|
$
|
7,388,196
|
|
LIABILITIES AND EQUITY
|
|
|
|
||||
Indebtedness:
|
|
|
|
||||
Secured debt, net of deferred financing costs of $529 and $614
|
$
|
310,070
|
|
|
$
|
311,349
|
|
Unsecured debt, net of deferred financing costs of $20,000 and $20,500
|
2,111,386
|
|
|
2,111,542
|
|
||
Unsecured line of credit
|
75,000
|
|
|
—
|
|
||
|
2,496,456
|
|
|
2,422,891
|
|
||
|
|
|
|
||||
Liabilities related to real estate investments held-for-sale
|
1,327
|
|
|
1,163
|
|
||
|
|
|
|
||||
Construction payables and amounts due subcontractors, including retentions
|
53,339
|
|
|
54,545
|
|
||
Accrued real estate taxes
|
71,234
|
|
|
67,374
|
|
||
Accrued interest
|
27,166
|
|
|
17,911
|
|
||
Other liabilities
|
152,358
|
|
|
210,825
|
|
||
Tenant security deposits and prepaid rents
|
44,610
|
|
|
39,109
|
|
||
Total liabilities
|
2,846,490
|
|
|
2,813,818
|
|
||
Shareholders' equity:
|
|
|
|
||||
Common shares ($0.01 par value); 600,000 shares authorized; 357,025 and 356,361 shares issued and outstanding, respectively
|
3,570
|
|
|
3,564
|
|
||
Additional paid-in capital
|
5,204,855
|
|
|
5,205,316
|
|
||
Distributions in excess of net income
|
(674,920
|
)
|
|
(676,036
|
)
|
||
Total shareholders' equity
|
4,533,505
|
|
|
4,532,844
|
|
||
Noncontrolling interests
|
47,679
|
|
|
41,534
|
|
||
Total equity
|
4,581,184
|
|
|
4,574,378
|
|
||
|
$
|
7,427,674
|
|
|
$
|
7,388,196
|
|
|
2018
|
|
2017
|
||||
Revenues:
|
|
|
|
||||
Rental and related revenue
|
$
|
193,456
|
|
|
$
|
171,676
|
|
General contractor and service fee revenue
|
41,101
|
|
|
9,399
|
|
||
|
234,557
|
|
|
181,075
|
|
||
Expenses:
|
|
|
|
||||
Rental expenses
|
20,396
|
|
|
16,237
|
|
||
Real estate taxes
|
31,146
|
|
|
26,511
|
|
||
General contractor and other services expenses
|
40,409
|
|
|
7,624
|
|
||
Depreciation and amortization
|
77,529
|
|
|
62,023
|
|
||
|
169,480
|
|
|
112,395
|
|
||
Other operating activities:
|
|
|
|
||||
Equity in earnings of unconsolidated joint ventures
|
8,287
|
|
|
4,749
|
|
||
Gain on sale of properties
|
44,886
|
|
|
37,046
|
|
||
Gain on land sales
|
2,949
|
|
|
1,505
|
|
||
Other operating expenses
|
(786
|
)
|
|
(738
|
)
|
||
Impairment charges
|
—
|
|
|
(859
|
)
|
||
General and administrative expenses
|
(21,023
|
)
|
|
(19,232
|
)
|
||
|
34,313
|
|
|
22,471
|
|
||
Operating income
|
99,390
|
|
|
91,151
|
|
||
Other income (expenses):
|
|
|
|
||||
Interest and other income, net
|
4,463
|
|
|
533
|
|
||
Interest expense
|
(20,000
|
)
|
|
(24,162
|
)
|
||
Gain on debt extinguishment
|
—
|
|
|
25
|
|
||
Income from continuing operations before income taxes
|
83,853
|
|
|
67,547
|
|
||
Income tax expense
|
(10,329
|
)
|
|
(2,132
|
)
|
||
Income from continuing operations
|
73,524
|
|
|
65,415
|
|
||
Discontinued operations:
|
|
|
|
||||
(Loss) income before gain on sales
|
(8
|
)
|
|
5,366
|
|
||
Gain on sale of depreciable properties
|
132
|
|
|
—
|
|
||
Income from discontinued operations
|
124
|
|
|
5,366
|
|
||
Net income
|
73,648
|
|
|
70,781
|
|
||
Net income attributable to noncontrolling interests
|
(685
|
)
|
|
(581
|
)
|
||
Net income attributable to common shareholders
|
$
|
72,963
|
|
|
$
|
70,200
|
|
Basic net income per common share:
|
|
|
|
||||
Continuing operations attributable to common shareholders
|
$
|
0.20
|
|
|
$
|
0.18
|
|
Discontinued operations attributable to common shareholders
|
—
|
|
|
0.02
|
|
||
Total
|
$
|
0.20
|
|
|
$
|
0.20
|
|
Diluted net income per common share:
|
|
|
|
||||
Continuing operations attributable to common shareholders
|
$
|
0.20
|
|
|
$
|
0.18
|
|
Discontinued operations attributable to common shareholders
|
—
|
|
|
0.02
|
|
||
Total
|
$
|
0.20
|
|
|
$
|
0.20
|
|
Weighted average number of common shares outstanding
|
356,740
|
|
|
355,282
|
|
||
Weighted average number of common shares and potential dilutive securities
|
360,400
|
|
|
360,700
|
|
||
|
|
|
|
||||
Comprehensive income:
|
|
|
|
||||
Net income
|
$
|
73,648
|
|
|
$
|
70,781
|
|
Other comprehensive loss:
|
|
|
|
||||
Amortization of interest contracts
|
—
|
|
|
(256
|
)
|
||
Comprehensive income
|
$
|
73,648
|
|
|
$
|
70,525
|
|
|
2018
|
|
2017
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
73,648
|
|
|
$
|
70,781
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation of buildings and tenant improvements
|
63,944
|
|
|
66,172
|
|
||
Amortization of deferred leasing and other costs
|
13,585
|
|
|
15,385
|
|
||
Amortization of deferred financing costs
|
1,418
|
|
|
1,316
|
|
||
Straight-line rental income and expense, net
|
(6,288
|
)
|
|
(2,928
|
)
|
||
Impairment charges
|
—
|
|
|
859
|
|
||
Gain on debt extinguishment
|
—
|
|
|
(25
|
)
|
||
Gains on land and depreciated property sales
|
(47,967
|
)
|
|
(38,551
|
)
|
||
Third-party construction contracts, net
|
(367
|
)
|
|
714
|
|
||
Other accrued revenues and expenses, net
|
19,862
|
|
|
(3,733
|
)
|
||
Equity in earnings in excess of operating distributions received from unconsolidated joint ventures
|
(4,673
|
)
|
|
(282
|
)
|
||
Net cash provided by operating activities
|
113,162
|
|
|
109,708
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Development of real estate investments
|
(104,346
|
)
|
|
(112,727
|
)
|
||
Acquisition of real estate investments and related intangible assets
|
(22,801
|
)
|
|
(114,369
|
)
|
||
Acquisition of undeveloped land
|
(67,256
|
)
|
|
(50,436
|
)
|
||
Second generation tenant improvements, leasing costs and building improvements
|
(14,102
|
)
|
|
(10,431
|
)
|
||
Other deferred leasing costs
|
(9,798
|
)
|
|
(4,398
|
)
|
||
Other assets
|
39,183
|
|
|
(4,186
|
)
|
||
Proceeds from land and depreciated property sales, net
|
131,380
|
|
|
103,120
|
|
||
Capital distributions from unconsolidated joint ventures
|
9,404
|
|
|
4,858
|
|
||
Capital contributions and advances to unconsolidated joint ventures
|
—
|
|
|
(297
|
)
|
||
Net cash used for investing activities
|
(38,336
|
)
|
|
(188,866
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from issuance of common shares, net
|
706
|
|
|
786
|
|
||
Payments on unsecured debt
|
(656
|
)
|
|
(616
|
)
|
||
Payments on secured indebtedness including principal amortization
|
(1,345
|
)
|
|
(17,539
|
)
|
||
Borrowings on line of credit, net
|
75,000
|
|
|
189,000
|
|
||
Distributions to common shareholders
|
(71,398
|
)
|
|
(67,554
|
)
|
||
Distributions to noncontrolling interests
|
(680
|
)
|
|
(640
|
)
|
||
Tax payments on stock-based compensation awards
|
(7,984
|
)
|
|
(8,848
|
)
|
||
Change in book cash overdrafts
|
(33,448
|
)
|
|
7,115
|
|
||
Deferred financing costs
|
(285
|
)
|
|
(7
|
)
|
||
Net cash (used for) provided by financing activities
|
(40,090
|
)
|
|
101,697
|
|
||
Net increase in cash, cash equivalents and restricted cash
|
34,736
|
|
|
22,539
|
|
||
Cash, cash equivalents and restricted cash at beginning of period
|
193,627
|
|
|
57,038
|
|
||
Cash, cash equivalents and restricted cash at end of period
|
$
|
228,363
|
|
|
$
|
79,577
|
|
|
|
|
|
||||
Non-cash investing and financing activities:
|
|
|
|
||||
Conversion of Limited Partner Units to common shares
|
$
|
—
|
|
|
$
|
1,685
|
|
|
Common Shareholders
|
|
|
|
|
|||||||||||||||
|
|
Common
Stock
|
|
Additional
Paid-in
Capital
|
|
Distributions
in Excess of
Net Income
|
|
Noncontrolling
Interests
|
|
Total
|
||||||||||
Balance at December 31, 2017
|
|
$
|
3,564
|
|
|
$
|
5,205,316
|
|
|
$
|
(676,036
|
)
|
|
$
|
41,534
|
|
|
$
|
4,574,378
|
|
Net income
|
|
—
|
|
|
—
|
|
|
72,963
|
|
|
685
|
|
|
73,648
|
|
|||||
Issuance of common shares
|
|
—
|
|
|
706
|
|
|
—
|
|
|
—
|
|
|
706
|
|
|||||
Stock-based compensation plan activity
|
|
6
|
|
|
(1,167
|
)
|
|
(449
|
)
|
|
6,140
|
|
|
4,530
|
|
|||||
Distributions to common shareholders ($0.20 per share)
|
|
—
|
|
|
—
|
|
|
(71,398
|
)
|
|
—
|
|
|
(71,398
|
)
|
|||||
Distributions to noncontrolling interests
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(680
|
)
|
|
(680
|
)
|
|||||
Balance at March 31, 2018
|
|
$
|
3,570
|
|
|
$
|
5,204,855
|
|
|
$
|
(674,920
|
)
|
|
$
|
47,679
|
|
|
$
|
4,581,184
|
|
|
March 31,
2018 |
|
December 31, 2017
|
||||
|
(Unaudited)
|
|
|
||||
ASSETS
|
|
|
|
||||
Real estate investments:
|
|
|
|
||||
Real estate assets
|
$
|
6,608,594
|
|
|
$
|
6,593,567
|
|
Construction in progress
|
441,484
|
|
|
401,407
|
|
||
Investments in and advances to unconsolidated joint ventures
|
121,576
|
|
|
126,487
|
|
||
Undeveloped land
|
259,842
|
|
|
226,987
|
|
||
|
7,431,496
|
|
|
7,348,448
|
|
||
Accumulated depreciation
|
(1,238,688
|
)
|
|
(1,193,905
|
)
|
||
Net real estate investments
|
6,192,808
|
|
|
6,154,543
|
|
||
|
|
|
|
||||
Real estate investments and other assets held-for-sale
|
21,740
|
|
|
17,550
|
|
||
|
|
|
|
||||
Cash and cash equivalents
|
160,861
|
|
|
67,562
|
|
||
Accounts receivable, net of allowance of $1,626 and $1,709
|
21,939
|
|
|
19,427
|
|
||
Straight-line rent receivable, net of allowance of $6,104 and $5,254
|
97,266
|
|
|
93,005
|
|
||
Receivables on construction contracts, including retentions
|
16,692
|
|
|
13,480
|
|
||
Deferred leasing and other costs, net of accumulated amortization of $208,092 and $209,451
|
297,103
|
|
|
292,682
|
|
||
Restricted cash held in escrow for like-kind exchange
|
59,196
|
|
|
116,405
|
|
||
Notes receivable from property sales
|
386,789
|
|
|
426,657
|
|
||
Other escrow deposits and other assets
|
173,280
|
|
|
186,885
|
|
||
|
$
|
7,427,674
|
|
|
$
|
7,388,196
|
|
LIABILITIES AND EQUITY
|
|
|
|
||||
Indebtedness:
|
|
|
|
||||
Secured debt, net of deferred financing costs of $529 and $614
|
$
|
310,070
|
|
|
$
|
311,349
|
|
Unsecured debt, net of deferred financing costs of $20,000 and $20,500
|
2,111,386
|
|
|
2,111,542
|
|
||
Unsecured line of credit
|
75,000
|
|
|
—
|
|
||
|
2,496,456
|
|
|
2,422,891
|
|
||
|
|
|
|
||||
Liabilities related to real estate investments held-for-sale
|
1,327
|
|
|
1,163
|
|
||
|
|
|
|
||||
Construction payables and amounts due subcontractors, including retentions
|
53,339
|
|
|
54,545
|
|
||
Accrued real estate taxes
|
71,234
|
|
|
67,374
|
|
||
Accrued interest
|
27,166
|
|
|
17,911
|
|
||
Other liabilities
|
152,358
|
|
|
210,825
|
|
||
Tenant security deposits and prepaid rents
|
44,610
|
|
|
39,109
|
|
||
Total liabilities
|
2,846,490
|
|
|
2,813,818
|
|
||
Partners' equity:
|
|
|
|
||||
Common equity (357,025 and 356,361 General Partner Units issued and outstanding, respectively)
|
4,533,505
|
|
|
4,532,844
|
|
||
Limited Partners' common equity (3,402 and 3,283 Limited Partner Units issued and outstanding, respectively)
|
46,706
|
|
|
40,563
|
|
||
Total partners' equity
|
4,580,211
|
|
|
4,573,407
|
|
||
Noncontrolling interests
|
973
|
|
|
971
|
|
||
Total equity
|
4,581,184
|
|
|
4,574,378
|
|
||
|
$
|
7,427,674
|
|
|
$
|
7,388,196
|
|
|
2018
|
|
2017
|
||||
Revenues:
|
|
|
|
||||
Rental and related revenue
|
$
|
193,456
|
|
|
$
|
171,676
|
|
General contractor and service fee revenue
|
41,101
|
|
|
9,399
|
|
||
|
234,557
|
|
|
181,075
|
|
||
Expenses:
|
|
|
|
||||
Rental expenses
|
20,396
|
|
|
16,237
|
|
||
Real estate taxes
|
31,146
|
|
|
26,511
|
|
||
General contractor and other services expenses
|
40,409
|
|
|
7,624
|
|
||
Depreciation and amortization
|
77,529
|
|
|
62,023
|
|
||
|
169,480
|
|
|
112,395
|
|
||
Other operating activities:
|
|
|
|
||||
Equity in earnings of unconsolidated joint ventures
|
8,287
|
|
|
4,749
|
|
||
Gain on sale of properties
|
44,886
|
|
|
37,046
|
|
||
Gain on land sales
|
2,949
|
|
|
1,505
|
|
||
Other operating expenses
|
(786
|
)
|
|
(738
|
)
|
||
Impairment charges
|
—
|
|
|
(859
|
)
|
||
General and administrative expenses
|
(21,023
|
)
|
|
(19,232
|
)
|
||
|
34,313
|
|
|
22,471
|
|
||
Operating income
|
99,390
|
|
|
91,151
|
|
||
Other income (expenses):
|
|
|
|
||||
Interest and other income, net
|
4,463
|
|
|
533
|
|
||
Interest expense
|
(20,000
|
)
|
|
(24,162
|
)
|
||
Gain on debt extinguishment
|
—
|
|
|
25
|
|
||
Income from continuing operations before income taxes
|
83,853
|
|
|
67,547
|
|
||
Income tax expense
|
(10,329
|
)
|
|
(2,132
|
)
|
||
Income from continuing operations
|
73,524
|
|
|
65,415
|
|
||
Discontinued operations:
|
|
|
|
||||
(Loss) income before gain on sales
|
(8
|
)
|
|
5,366
|
|
||
Gain on sale of depreciable properties
|
132
|
|
|
—
|
|
||
Income from discontinued operations
|
124
|
|
|
5,366
|
|
||
Net income
|
73,648
|
|
|
70,781
|
|
||
Net (income) loss attributable to noncontrolling interests
|
(2
|
)
|
|
71
|
|
||
Net income attributable to common unitholders
|
$
|
73,646
|
|
|
$
|
70,852
|
|
Basic net income per Common Unit:
|
|
|
|
||||
Continuing operations attributable to common unitholders
|
$
|
0.20
|
|
|
$
|
0.18
|
|
Discontinued operations attributable to common unitholders
|
—
|
|
|
0.02
|
|
||
Total
|
$
|
0.20
|
|
|
$
|
0.20
|
|
Diluted net income per Common Unit:
|
|
|
|
||||
Continuing operations attributable to common unitholders
|
$
|
0.20
|
|
|
$
|
0.18
|
|
Discontinued operations attributable to common unitholders
|
—
|
|
|
0.02
|
|
||
Total
|
$
|
0.20
|
|
|
$
|
0.20
|
|
Weighted average number of Common Units outstanding
|
360,095
|
|
|
358,598
|
|
||
Weighted average number of Common Units and potential dilutive securities
|
360,400
|
|
|
360,700
|
|
||
|
|
|
|
||||
Comprehensive income:
|
|
|
|
||||
Net income
|
$
|
73,648
|
|
|
$
|
70,781
|
|
Other comprehensive loss:
|
|
|
|
||||
Amortization of interest contracts
|
—
|
|
|
(256
|
)
|
||
Comprehensive income
|
$
|
73,648
|
|
|
$
|
70,525
|
|
|
2018
|
|
2017
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income
|
$
|
73,648
|
|
|
$
|
70,781
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation of buildings and tenant improvements
|
63,944
|
|
|
66,172
|
|
||
Amortization of deferred leasing and other costs
|
13,585
|
|
|
15,385
|
|
||
Amortization of deferred financing costs
|
1,418
|
|
|
1,316
|
|
||
Straight-line rental income and expense, net
|
(6,288
|
)
|
|
(2,928
|
)
|
||
Impairment charges
|
—
|
|
|
859
|
|
||
Gain on debt extinguishment
|
—
|
|
|
(25
|
)
|
||
Gains on land and depreciated property sales
|
(47,967
|
)
|
|
(38,551
|
)
|
||
Third-party construction contracts, net
|
(367
|
)
|
|
714
|
|
||
Other accrued revenues and expenses, net
|
19,862
|
|
|
(3,733
|
)
|
||
Equity in earnings in excess of operating distributions received from unconsolidated joint ventures
|
(4,673
|
)
|
|
(282
|
)
|
||
Net cash provided by operating activities
|
113,162
|
|
|
109,708
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Development of real estate investments
|
(104,346
|
)
|
|
(112,727
|
)
|
||
Acquisition of real estate investments and related intangible assets
|
(22,801
|
)
|
|
(114,369
|
)
|
||
Acquisition of undeveloped land
|
(67,256
|
)
|
|
(50,436
|
)
|
||
Second generation tenant improvements, leasing costs and building improvements
|
(14,102
|
)
|
|
(10,431
|
)
|
||
Other deferred leasing costs
|
(9,798
|
)
|
|
(4,398
|
)
|
||
Other assets
|
39,183
|
|
|
(4,186
|
)
|
||
Proceeds from land and depreciated property sales, net
|
131,380
|
|
|
103,120
|
|
||
Capital distributions from unconsolidated joint ventures
|
9,404
|
|
|
4,858
|
|
||
Capital contributions and advances to unconsolidated joint ventures
|
—
|
|
|
(297
|
)
|
||
Net cash used for investing activities
|
(38,336
|
)
|
|
(188,866
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Contributions from the General Partner
|
706
|
|
|
786
|
|
||
Payments on unsecured debt
|
(656
|
)
|
|
(616
|
)
|
||
Payments on secured indebtedness including principal amortization
|
(1,345
|
)
|
|
(17,539
|
)
|
||
Borrowings on line of credit, net
|
75,000
|
|
|
189,000
|
|
||
Distributions to common unitholders
|
(72,078
|
)
|
|
(68,184
|
)
|
||
Distributions to noncontrolling interests
|
—
|
|
|
(10
|
)
|
||
Tax payments on stock-based compensation awards
|
(7,984
|
)
|
|
(8,848
|
)
|
||
Change in book cash overdrafts
|
(33,448
|
)
|
|
7,115
|
|
||
Deferred financing costs
|
(285
|
)
|
|
(7
|
)
|
||
Net cash (used for) provided by financing activities
|
(40,090
|
)
|
|
101,697
|
|
||
Net increase in cash, cash equivalents and restricted cash
|
34,736
|
|
|
22,539
|
|
||
Cash, cash equivalents and restricted cash at beginning of period
|
193,627
|
|
|
57,038
|
|
||
Cash, cash equivalents and restricted cash at end of period
|
$
|
228,363
|
|
|
$
|
79,577
|
|
|
|
|
|
||||
Non-cash investing and financing activities:
|
|
|
|
||||
Conversion of Limited Partner Units to common shares of the General Partner
|
$
|
—
|
|
|
$
|
1,685
|
|
|
Common Unitholders
|
|
|
|
|
||||||||||||||
|
General
|
|
Limited
|
|
|
|
|
|
|
||||||||||
|
Partner's
|
|
Partners'
|
|
Total
|
|
|
|
|
||||||||||
|
Common Equity
|
|
Common Equity
|
|
Partners' Equity
|
|
Noncontrolling
Interests
|
|
Total Equity
|
||||||||||
Balance at December 31, 2017
|
$
|
4,532,844
|
|
|
$
|
40,563
|
|
|
$
|
4,573,407
|
|
|
$
|
971
|
|
|
$
|
4,574,378
|
|
Net income
|
72,963
|
|
|
683
|
|
|
73,646
|
|
|
2
|
|
|
73,648
|
|
|||||
Capital contribution from the General Partner
|
706
|
|
|
—
|
|
|
706
|
|
|
—
|
|
|
706
|
|
|||||
Stock-based compensation plan activity
|
(1,610
|
)
|
|
6,140
|
|
|
4,530
|
|
|
—
|
|
|
4,530
|
|
|||||
Distributions to common unitholders ($0.20 per Common Unit)
|
(71,398
|
)
|
|
(680
|
)
|
|
(72,078
|
)
|
|
—
|
|
|
(72,078
|
)
|
|||||
Balance at March 31, 2018
|
$
|
4,533,505
|
|
|
$
|
46,706
|
|
|
$
|
4,580,211
|
|
|
$
|
973
|
|
|
$
|
4,581,184
|
|
|
March 31,
2018 |
|
December 31,
2017 |
||||
Cash and cash equivalents
|
$
|
160,861
|
|
|
$
|
67,562
|
|
Restricted cash held in escrow for like-kind exchange
|
59,196
|
|
|
116,405
|
|
||
Restricted cash included in other escrow deposits and other assets
|
8,306
|
|
|
9,660
|
|
||
Total cash, cash equivalents, and restricted cash shown in the Consolidated Statements of Cash Flows
|
$
|
228,363
|
|
|
$
|
193,627
|
|
Real estate assets
|
$
|
21,537
|
|
Lease related intangible assets
|
1,693
|
|
|
Total acquired assets
|
23,230
|
|
|
Below market lease liability
|
367
|
|
|
Fair value of acquired net assets
|
$
|
22,863
|
|
|
Low
|
High
|
Exit capitalization rate
|
4.50%
|
4.50%
|
Net rental rate per square foot
|
$9.12
|
$10.20
|
|
Book Value at 12/31/2017
|
|
Book Value at 3/31/2018
|
|
Fair Value at 12/31/2017
|
|
Issuances and
Assumptions
|
|
Payments/Payoffs
|
|
Adjustments
to Fair Value
|
|
Fair Value at 3/31/2018
|
||||||||||||||
Fixed rate secured debt
|
$
|
309,463
|
|
|
$
|
308,099
|
|
|
$
|
325,753
|
|
|
$
|
—
|
|
|
$
|
(1,345
|
)
|
|
$
|
(3,756
|
)
|
|
$
|
320,652
|
|
Variable rate secured debt
|
2,500
|
|
|
2,500
|
|
|
2,500
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,500
|
|
|||||||
Unsecured debt
|
2,132,042
|
|
|
2,131,386
|
|
|
2,190,548
|
|
|
—
|
|
|
(656
|
)
|
|
(60,502
|
)
|
|
2,129,390
|
|
|||||||
Unsecured line of credit
|
—
|
|
|
75,000
|
|
|
—
|
|
|
75,000
|
|
|
—
|
|
|
—
|
|
|
75,000
|
|
|||||||
Total
|
$
|
2,444,005
|
|
|
$
|
2,516,985
|
|
|
$
|
2,518,801
|
|
|
$
|
75,000
|
|
|
$
|
(2,001
|
)
|
|
$
|
(64,258
|
)
|
|
$
|
2,527,542
|
|
Less: Deferred financing costs
|
21,114
|
|
|
20,529
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total indebtedness as reported on the consolidated balance sheets
|
$
|
2,422,891
|
|
|
$
|
2,496,456
|
|
|
|
|
|
|
|
|
|
|
|
Description
|
Borrowing
Capacity
|
|
Maturity Date
|
|
Outstanding Balance at March 31, 2018
|
||||
Unsecured Line of Credit - Partnership
|
$
|
1,200,000
|
|
|
January 30, 2022
|
|
$
|
75,000
|
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2018
|
|
2017
|
||||
Management fees
|
$
|
442
|
|
|
$
|
811
|
|
Leasing fees
|
302
|
|
|
434
|
|
||
Construction and development fees
|
697
|
|
|
624
|
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
General Partner
|
|
|
|
||||
Net income attributable to common shareholders
|
$
|
72,963
|
|
|
$
|
70,200
|
|
Less: dividends on participating securities
|
(437
|
)
|
|
(542
|
)
|
||
Basic net income attributable to common shareholders
|
72,526
|
|
|
69,658
|
|
||
Add back dividends on dilutive participating securities
|
—
|
|
|
305
|
|
||
Noncontrolling interest in earnings of common unitholders
|
683
|
|
|
652
|
|
||
Diluted net income attributable to common shareholders
|
$
|
73,209
|
|
|
$
|
70,615
|
|
Weighted average number of common shares outstanding
|
356,740
|
|
|
355,282
|
|
||
Weighted average Limited Partner Units outstanding
|
3,355
|
|
|
3,316
|
|
||
Other potential dilutive shares
|
305
|
|
|
2,102
|
|
||
Weighted average number of common shares and potential dilutive securities
|
360,400
|
|
|
360,700
|
|
||
|
|
|
|
||||
Partnership
|
|
|
|
||||
Net income attributable to common unitholders
|
$
|
73,646
|
|
|
$
|
70,852
|
|
Less: distributions on participating securities
|
(437
|
)
|
|
(542
|
)
|
||
Basic net income attributable to common unitholders
|
$
|
73,209
|
|
|
$
|
70,310
|
|
Add back distributions on dilutive participating securities
|
—
|
|
|
305
|
|
||
Diluted net income attributable to common unitholders
|
$
|
73,209
|
|
|
$
|
70,615
|
|
Weighted average number of Common Units outstanding
|
360,095
|
|
|
358,598
|
|
||
Other potential dilutive units
|
305
|
|
|
2,102
|
|
||
Weighted average number of Common Units and potential dilutive securities
|
360,400
|
|
|
360,700
|
|
|
Three Months Ended March 31,
|
||||
|
2018
|
|
2017
|
||
General Partner and Partnership
|
|
|
|
||
Other potential dilutive shares or units:
|
|
|
|
||
Anti-dilutive outstanding potential shares or units under fixed stock option and other stock-based compensation plans
|
—
|
|
|
—
|
|
Anti-dilutive outstanding participating securities
|
2,272
|
|
|
1,389
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2018
|
|
2017
|
||||
Revenues
|
|
|
|
|
||||
Rental Operations:
|
|
|
|
|
||||
Industrial
|
|
$
|
189,315
|
|
|
$
|
156,882
|
|
Non-reportable Rental Operations
|
|
3,453
|
|
|
14,416
|
|
||
Service Operations
|
|
41,101
|
|
|
9,399
|
|
||
Total segment revenues
|
|
233,869
|
|
|
180,697
|
|
||
Other revenue
|
|
688
|
|
|
378
|
|
||
Consolidated revenue from continuing operations
|
|
234,557
|
|
|
181,075
|
|
||
Discontinued operations
|
|
5
|
|
|
46,239
|
|
||
Consolidated revenue
|
|
$
|
234,562
|
|
|
$
|
227,314
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2018
|
|
2017
|
||||
PNOI
|
|
|
|
|
||||
Industrial
|
|
$
|
133,388
|
|
|
$
|
114,680
|
|
Non-reportable Rental Operations
|
|
921
|
|
|
927
|
|
||
PNOI, excluding all sold properties
|
|
134,309
|
|
|
115,607
|
|
||
PNOI from sold properties included in continuing operations
|
|
1,606
|
|
|
2,905
|
|
||
PNOI, continuing operations
|
|
$
|
135,915
|
|
|
$
|
118,512
|
|
|
|
|
|
|
||||
Earnings from Service Operations
|
|
692
|
|
|
1,775
|
|
||
|
|
|
|
|
||||
Rental Operations revenues and expenses excluded from PNOI:
|
|
|
|
|
||||
Straight-line rental income and expense, net
|
|
6,289
|
|
|
1,577
|
|
||
Revenues related to lease buyouts
|
|
23
|
|
|
9,785
|
|
||
Amortization of lease concessions and above and below market rents
|
|
545
|
|
|
(543
|
)
|
||
Intercompany rents and other adjusting items
|
|
14
|
|
|
180
|
|
||
Non-Segment Items:
|
|
|
|
|
||||
Equity in earnings of unconsolidated joint ventures
|
|
8,287
|
|
|
4,749
|
|
||
Interest expense
|
|
(20,000
|
)
|
|
(24,162
|
)
|
||
Depreciation and amortization expense
|
|
(77,529
|
)
|
|
(62,023
|
)
|
||
Gain on sale of properties
|
|
44,886
|
|
|
37,046
|
|
||
Impairment charges
|
|
—
|
|
|
(859
|
)
|
||
Interest and other income, net
|
|
4,463
|
|
|
533
|
|
||
General and administrative expenses
|
|
(21,023
|
)
|
|
(19,232
|
)
|
||
Gain on land sales
|
|
2,949
|
|
|
1,505
|
|
||
Other operating expenses
|
|
(786
|
)
|
|
(738
|
)
|
||
Gain on extinguishment of debt
|
|
—
|
|
|
25
|
|
||
Other non-segment revenues and expenses, net
|
|
(872
|
)
|
|
(583
|
)
|
||
Income from continuing operations before income taxes
|
|
$
|
83,853
|
|
|
$
|
67,547
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||
Buildings and tenant improvements
|
$
|
4,668,740
|
|
|
$
|
4,642,832
|
|
Land and improvements
|
1,939,854
|
|
|
1,950,735
|
|
||
Real estate assets
|
$
|
6,608,594
|
|
|
$
|
6,593,567
|
|
|
Held-for-Sale at March 31, 2018
|
|
Sold Year-to-Date in 2018
|
|
Sold in 2017
|
|
Total
|
|
|
|
|
||||
|
|
|
|
||||
Total properties included in discontinued operations
|
—
|
|
—
|
|
81
|
|
81
|
Properties excluded from discontinued operations
|
2
|
|
6
|
|
17
|
|
25
|
Total properties sold or classified as held-for-sale
|
2
|
|
6
|
|
98
|
|
106
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Revenues
|
$
|
5
|
|
|
$
|
46,239
|
|
Operating expenses
|
(13
|
)
|
|
(14,996
|
)
|
||
Depreciation and amortization
|
—
|
|
|
(19,534
|
)
|
||
Operating (loss) income
|
(8
|
)
|
|
11,709
|
|
||
Interest expense
|
—
|
|
|
(6,343
|
)
|
||
(Loss) income before gain on sales
|
(8
|
)
|
|
5,366
|
|
||
Gain on sale of depreciable properties
|
132
|
|
|
—
|
|
||
Income from discontinued operations
|
$
|
124
|
|
|
$
|
5,366
|
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Income from continuing operations attributable to common shareholders
|
$
|
72,840
|
|
|
$
|
64,884
|
|
Income from discontinued operations attributable to common shareholders
|
123
|
|
|
5,316
|
|
||
Net income attributable to common shareholders
|
$
|
72,963
|
|
|
$
|
70,200
|
|
|
Held-for-Sale Properties Included in Continuing Operations
|
||||||
|
March 31, 2018
|
|
December 31, 2017
|
||||
Land and improvements
|
$
|
9,055
|
|
|
$
|
8,157
|
|
Buildings and tenant improvements
|
15,283
|
|
|
10,505
|
|
||
Undeveloped land
|
706
|
|
|
—
|
|
||
Accumulated depreciation
|
(4,824
|
)
|
|
(2,553
|
)
|
||
Deferred leasing and other costs, net
|
862
|
|
|
862
|
|
||
Other assets
|
658
|
|
|
579
|
|
||
Total assets held for sale
|
$
|
21,740
|
|
|
$
|
17,550
|
|
|
|
|
|
||||
Total liabilities related to assets held for sale
|
$
|
1,327
|
|
|
$
|
1,163
|
|
Class of stock/units
|
Quarterly Amount per Share or Unit
|
|
Record Date
|
|
Payment Date
|
Common - Quarterly
|
$0.20
|
|
May 16, 2018
|
|
May 31, 2018
|
•
|
Changes in general economic and business conditions, including the financial condition of our tenants and the value of our real estate assets;
|
•
|
The General Partner's continued qualification as a REIT for U.S. federal income tax purposes;
|
•
|
Heightened competition for tenants and potential decreases in property occupancy;
|
•
|
Potential changes in the financial markets and interest rates;
|
•
|
Volatility in the General Partner's stock price and trading volume;
|
•
|
Our continuing ability to raise funds on favorable terms, or at all;
|
•
|
Our ability to successfully identify, acquire, develop and/or manage properties on terms that are favorable to us;
|
•
|
Potential increases in real estate construction costs;
|
•
|
Our ability to successfully dispose of properties on terms that are favorable to us, including, without limitation, through one or more transactions that are consistent with our previously disclosed strategic plans;
|
•
|
Our ability to successfully integrate our acquired properties;
|
•
|
Our ability to retain our current credit ratings;
|
•
|
Inherent risks in the real estate business, including, but not limited to, tenant defaults, potential liability relating to environmental matters and liquidity of real estate investments; and
|
•
|
Other risks and uncertainties described herein, as well as those risks and uncertainties discussed from time to time in our other reports and other public filings with the Securities and Exchange Commission (the "SEC").
|
•
|
Owned or jointly controlled
507
primarily industrial properties, of which
489
properties with
139.8 million
square feet were in service and
18
properties with
9.6 million
square feet were under development. The
489
in-service properties were comprised of
449
consolidated properties with
129.1 million
square feet and
40
jointly controlled unconsolidated properties with
10.8 million
square feet. The
18
properties under development consisted of
16
consolidated properties with
8.5 million
square feet and
two
jointly controlled unconsolidated properties with
1.1 million
square feet.
|
•
|
Owned directly, or through ownership interests in unconsolidated joint ventures (with acreage not adjusted for our percentage ownership interest), approximately 1,900 acres of land and controlled approximately 1,400 acres through purchase options.
|
|
Consolidated Properties
|
|
Unconsolidated Joint Venture Properties
|
|
Total Including Unconsolidated Joint Venture Properties
|
|||
Vacant square feet at December 31, 2017
|
4,992
|
|
|
1,219
|
|
|
6,211
|
|
Vacant space in completed developments
|
189
|
|
|
—
|
|
|
189
|
|
Dispositions
|
(59
|
)
|
|
—
|
|
|
(59
|
)
|
Expirations
|
1,985
|
|
|
64
|
|
|
2,049
|
|
Early lease terminations
|
53
|
|
|
—
|
|
|
53
|
|
Property structural changes/other
|
(10
|
)
|
|
—
|
|
|
(10
|
)
|
Leasing of previously vacant space
|
(3,619
|
)
|
|
(258
|
)
|
|
(3,877
|
)
|
Vacant square feet at March 31, 2018
|
3,531
|
|
|
1,025
|
|
|
4,556
|
|
|
Three Months Ended March 31,
|
|||
|
2018
|
|
2017
|
|
New Leasing Activity - First Generation Industrial
|
2,520
|
|
|
2,436
|
New Leasing Activity - Second Generation Industrial
|
2,633
|
|
|
1,096
|
Renewal Leasing Activity - Industrial
|
1,477
|
|
|
1,257
|
Non-reportable Rental Operations Leasing Activity
|
—
|
|
|
174
|
Total Consolidated Leasing Activity
|
6,630
|
|
|
4,963
|
Unconsolidated Joint Venture Leasing Activity
|
320
|
|
|
662
|
Total Including Unconsolidated Joint Venture Leasing Activity
|
6,950
|
|
|
5,625
|
|
Square Feet of Leases
(in thousands)
|
|
Percent of Expiring Leases Renewed
|
|
Average Term in Years
|
|
Estimated Tenant Improvement Cost per Square Foot
|
|
Leasing Commissions per Square Foot
|
|||||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|||||
Three Months Ended March 31,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Consolidated - New Second Generation
|
2,633
|
|
|
1,096
|
|
|
|
|
|
|
7.2
|
|
|
5.2
|
|
$1.66
|
|
$1.84
|
|
$1.92
|
|
$1.33
|
||
Unconsolidated Joint Ventures - New Second Generation
|
128
|
|
|
54
|
|
|
|
|
|
|
10.8
|
|
|
14.6
|
|
$2.35
|
|
$1.37
|
|
$3.61
|
|
$2.62
|
||
Total - New Second Generation
|
2,761
|
|
|
1,150
|
|
|
|
|
|
|
7.3
|
|
|
5.6
|
|
$1.69
|
|
$1.82
|
|
$2.00
|
|
$1.39
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Consolidated - Renewal
|
1,477
|
|
|
1,257
|
|
|
69.1
|
%
|
|
85.6
|
%
|
|
4.6
|
|
|
4.7
|
|
$1.09
|
|
$0.71
|
|
$1.39
|
|
$1.21
|
Unconsolidated Joint Ventures - Renewal
|
62
|
|
|
156
|
|
|
49.1
|
%
|
|
74.1
|
%
|
|
6.4
|
|
|
3.7
|
|
$1.26
|
|
$0.21
|
|
$2.09
|
|
$0.85
|
Total - Renewal
|
1,539
|
|
|
1,413
|
|
|
68.0
|
%
|
|
84.1
|
%
|
|
4.6
|
|
|
4.6
|
|
$1.10
|
|
$0.65
|
|
$1.41
|
|
$1.17
|
|
Year-to-Date 2018 Dispositions
|
|
Full Year 2017 Dispositions
|
||||||||||||||||
Type
|
Sales Price
|
|
In-Place Yield*
|
|
Percent Occupied**
|
|
Sales Price
|
|
In-Place Yield*
|
|
Percent Occupied**
|
||||||||
Industrial
|
$
|
15,750
|
|
|
5.0
|
%
|
|
87.7
|
%
|
|
$
|
45,192
|
|
|
7.0
|
%
|
|
92.6
|
%
|
Non-reportable Rental Operations
|
114,327
|
|
|
4.8
|
%
|
|
96.1
|
%
|
|
2,938,572
|
|
|
4.8
|
%
|
|
93.9
|
%
|
||
Total
|
$
|
130,077
|
|
|
5.1
|
%
|
|
94.0
|
%
|
|
$
|
2,983,764
|
|
|
4.8
|
%
|
|
93.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
* In-place yields of completed dispositions are calculated as annualized net operating income from space leased to tenants at the date of sale on a lease-up basis, including full rent from all executed leases, even if currently in a free rent period, divided by the sales price. Annualized net operating income is comprised of base rental payments, excluding reimbursement of operating expenses, less current annualized operating expenses not recovered through tenant reimbursements.
|
|||||||||||||||||||
** Represents percentage of total square feet leased based on executed leases and without regard to whether the leases have commenced, at the date of sale.
|
Ownership Type
|
Square
Feet
|
|
Percent
Leased
|
|
Total
Estimated
Project Costs
|
|
Total
Incurred
to Date
|
|
Amount
Remaining
to be Spent
|
|||||||
Consolidated properties
|
8,477
|
|
52
|
%
|
|
$
|
780,825
|
|
|
$
|
422,239
|
|
|
$
|
358,586
|
|
Unconsolidated joint venture properties
|
1,108
|
|
100
|
%
|
|
54,096
|
|
|
41,206
|
|
|
12,890
|
|
|||
Total
|
9,585
|
|
57
|
%
|
|
$
|
834,921
|
|
|
$
|
463,445
|
|
|
$
|
371,476
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2018
|
|
2017
|
||||
Rental and related revenue from continuing operations
|
|
$
|
193,456
|
|
|
$
|
171,676
|
|
General contractor and service fee revenue
|
|
41,101
|
|
|
9,399
|
|
||
Operating income
|
|
99,390
|
|
|
91,151
|
|
||
General Partner
|
|
|
|
|
||||
Net income attributable to common shareholders
|
|
$
|
72,963
|
|
|
$
|
70,200
|
|
Weighted average common shares outstanding
|
|
356,740
|
|
|
355,282
|
|
||
Weighted average common shares and potential dilutive securities
|
|
360,400
|
|
|
360,700
|
|
||
Partnership
|
|
|
|
|
||||
Net income attributable to common unitholders
|
|
$
|
73,646
|
|
|
$
|
70,852
|
|
Weighted average Common Units outstanding
|
|
360,095
|
|
|
358,598
|
|
||
Weighted average Common Units and potential dilutive securities
|
|
360,400
|
|
|
360,700
|
|
||
General Partner and Partnership
|
|
|
|
|
||||
Basic income per common share or Common Unit:
|
|
|
|
|
||||
Continuing operations
|
|
$
|
0.20
|
|
|
$
|
0.18
|
|
Discontinued operations
|
|
$
|
—
|
|
|
$
|
0.02
|
|
Diluted income per common share or Common Unit:
|
|
|
|
|
||||
Continuing operations
|
|
$
|
0.20
|
|
|
$
|
0.18
|
|
Discontinued operations
|
|
$
|
—
|
|
|
$
|
0.02
|
|
Number of in-service consolidated properties at end of period:
|
|
|
|
|
||||
Continuing operations
|
|
449
|
|
|
415
|
|
||
Discontinued operations
|
|
—
|
|
|
81
|
|
||
In-service consolidated square footage at end of period
|
|
129,060
|
|
|
120,659
|
|
||
Number of in-service joint venture properties at end of period
|
|
40
|
|
|
42
|
|
||
In-service joint venture square footage at end of period
|
|
10,759
|
|
|
11,286
|
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Net income attributable to common shareholders of the General Partner
|
$
|
72,963
|
|
|
$
|
70,200
|
|
Add back: Net income attributable to noncontrolling interests - common limited partnership interests in the Partnership
|
683
|
|
|
652
|
|
||
Net income attributable to common unitholders of the Partnership
|
73,646
|
|
|
70,852
|
|
||
Adjustments:
|
|
|
|
||||
Depreciation and amortization
|
77,529
|
|
|
81,557
|
|
||
Company share of joint venture depreciation, amortization and other adjustments
|
2,161
|
|
|
2,495
|
|
||
Impairment charges - depreciable property
|
—
|
|
|
859
|
|
||
Gain on depreciable property sales - wholly owned
|
(45,018
|
)
|
|
(37,046
|
)
|
||
Income tax expense triggered by depreciable property sales
|
10,329
|
|
|
—
|
|
||
Gains on depreciable property sales - share of unconsolidated joint ventures
|
(6,217
|
)
|
|
(1,798
|
)
|
||
FFO attributable to common unitholders of the Partnership
|
$
|
112,430
|
|
|
$
|
116,919
|
|
Additional General Partner Adjustments:
|
|
|
|
||||
Net income attributable to noncontrolling interests - common limited partnership interests in the Partnership
|
(683
|
)
|
|
(652
|
)
|
||
Noncontrolling interest share of adjustments
|
(361
|
)
|
|
(427
|
)
|
||
FFO attributable to common shareholders of the General Partner
|
$
|
111,386
|
|
|
$
|
115,840
|
|
|
|
Three Months Ended March 31,
|
Percent
|
|||||||
|
|
2018
|
|
2017
|
Change
|
|||||
Income from continuing operations before income taxes
|
|
$
|
83,853
|
|
|
$
|
67,547
|
|
|
|
Share of SPNOI from unconsolidated joint ventures
|
|
4,008
|
|
|
3,954
|
|
|
|||
PNOI excluded from the "same property" population
|
|
(19,579
|
)
|
|
(4,762
|
)
|
|
|||
Earnings from Service Operations
|
|
(692
|
)
|
|
(1,775
|
)
|
|
|||
Rental Operations revenues and expenses excluded from PNOI
|
|
(8,477
|
)
|
|
(13,904
|
)
|
|
|||
Non-Segment Items
|
|
59,625
|
|
|
63,739
|
|
|
|||
SPNOI
|
|
$
|
118,738
|
|
|
$
|
114,799
|
|
3.4
|
%
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Rental and related revenue:
|
|
|
|
||||
Industrial
|
$
|
189,315
|
|
|
$
|
156,882
|
|
Non-reportable Rental Operations and non-segment revenues
|
4,141
|
|
|
14,794
|
|
||
Total rental and related revenue from continuing operations
|
$
|
193,456
|
|
|
$
|
171,676
|
|
Rental and related revenue from discontinued operations
|
5
|
|
|
46,239
|
|
||
Total rental and related revenue from continuing and discontinued operations
|
$
|
193,461
|
|
|
$
|
217,915
|
|
•
|
We acquired 29 properties and placed 25 developments in service from January 1,
2017
to
March 31, 2018
, which provided incremental revenues from continuing operations of $24.6 million during the three months ended
March 31, 2018
, as compared to the same period in
2017
.
|
•
|
Increased rental rates within our "same property" portfolio also contributed to the increase to rental and related revenue from continuing operations.
|
•
|
The sale of 19 in-service properties since January 1,
2017
, which did not meet the criteria to be classified within discontinued operations, resulted in a decrease of $11.8 million to rental and related revenue from continuing operations in the three months ended
March 31, 2018
, as compared to the same period in
2017
, which partially offset the aforementioned increases to rental and related revenue from continuing operations.
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Rental expenses:
|
|
|
|
||||
Industrial
|
$
|
18,694
|
|
|
$
|
14,805
|
|
Non-reportable Rental Operations and non-segment expenses
|
1,702
|
|
|
1,432
|
|
||
Total rental expenses from continuing operations
|
$
|
20,396
|
|
|
$
|
16,237
|
|
Rental expenses from discontinued operations
|
(4
|
)
|
|
9,034
|
|
||
Total rental expenses from continuing and discontinued operations
|
$
|
20,392
|
|
|
$
|
25,271
|
|
Real estate taxes:
|
|
|
|
||||
Industrial
|
$
|
30,418
|
|
|
$
|
25,388
|
|
Non-reportable Rental Operations and non-segment expenses
|
728
|
|
|
1,123
|
|
||
Total real estate tax expense from continuing operations
|
$
|
31,146
|
|
|
$
|
26,511
|
|
Real estate tax expense from discontinued operations
|
17
|
|
|
5,962
|
|
||
Total real estate tax expense from continuing and discontinued operations
|
$
|
31,163
|
|
|
$
|
32,473
|
|
General and administrative expenses - three-month period ended March 31, 2017
|
$
|
19.2
|
|
Increase to overall pool of overhead costs
|
1.7
|
|
|
Decreased absorption of costs by wholly owned leasing and development activities (1)
|
0.7
|
|
|
Increased allocation of costs to Service Operations and Rental Operations (2)
|
(0.6
|
)
|
|
General and administrative expenses - three-month period ended March 31, 2018
|
$
|
21.0
|
|
•
|
property investment;
|
•
|
leasing/capital costs;
|
•
|
dividends and distributions to shareholders and unitholders;
|
•
|
long-term debt maturities;
|
•
|
opportunistic repurchases of outstanding debt; and
|
•
|
other contractual obligations.
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Second generation tenant improvements
|
$
|
3,602
|
|
|
$
|
3,694
|
|
Second generation leasing costs
|
10,278
|
|
|
5,650
|
|
||
Building improvements
|
222
|
|
|
1,087
|
|
||
Total second generation capital expenditures
|
$
|
14,102
|
|
|
$
|
10,431
|
|
Development of real estate investments
|
$
|
104,346
|
|
|
$
|
112,727
|
|
Other deferred leasing costs
|
$
|
9,798
|
|
|
$
|
4,398
|
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Industrial
|
$
|
14,044
|
|
|
$
|
9,401
|
|
Non-reportable Rental Operations
|
58
|
|
|
1,030
|
|
||
Total
|
$
|
14,102
|
|
|
$
|
10,431
|
|
|
Future Repayments
|
|
|
|||||||||||
Year
|
Scheduled
Amortization
|
|
Maturities
|
|
Total
|
|
Weighted Average Interest Rate of
Future Repayments
|
|||||||
Remainder of 2018
|
$
|
5,768
|
|
|
$
|
—
|
|
|
$
|
5,768
|
|
|
6.17
|
%
|
2019
|
6,935
|
|
|
268,438
|
|
|
275,373
|
|
|
7.61
|
%
|
|||
2020
|
5,381
|
|
|
—
|
|
|
5,381
|
|
|
5.82
|
%
|
|||
2021
|
3,416
|
|
|
259,047
|
|
|
262,463
|
|
|
3.99
|
%
|
|||
2022
|
3,611
|
|
|
600,000
|
|
|
603,611
|
|
|
4.20
|
%
|
|||
2023
|
3,817
|
|
|
325,000
|
|
|
328,817
|
|
|
3.52
|
%
|
|||
2024
|
4,036
|
|
|
300,000
|
|
|
304,036
|
|
|
3.92
|
%
|
|||
2025
|
3,938
|
|
|
—
|
|
|
3,938
|
|
|
5.60
|
%
|
|||
2026
|
2,029
|
|
|
375,000
|
|
|
377,029
|
|
|
3.37
|
%
|
|||
2027
|
358
|
|
|
300,000
|
|
|
300,358
|
|
|
3.40
|
%
|
|||
2028
|
—
|
|
|
50,000
|
|
|
50,000
|
|
|
7.29
|
%
|
|||
Thereafter
|
—
|
|
|
—
|
|
|
—
|
|
|
N/A
|
|
|||
|
$
|
39,289
|
|
|
$
|
2,477,485
|
|
|
$
|
2,516,774
|
|
|
4.28
|
%
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
General Partner
|
|
|
|
||||
Net cash provided by operating activities
|
$
|
113.2
|
|
|
$
|
109.7
|
|
Net cash used for investing activities
|
$
|
(38.3
|
)
|
|
$
|
(188.9
|
)
|
Net cash (used for) provided by financing activities
|
$
|
(40.1
|
)
|
|
$
|
101.7
|
|
|
|
|
|
||||
Partnership
|
|
|
|
||||
Net cash provided by operating activities
|
$
|
113.2
|
|
|
$
|
109.7
|
|
Net cash used for investing activities
|
$
|
(38.3
|
)
|
|
$
|
(188.9
|
)
|
Net cash (used for) provided by financing activities
|
$
|
(40.1
|
)
|
|
$
|
101.7
|
|
•
|
During the
three months ended March 31, 2018
, we paid cash of
$22.8 million
and
$67.3 million
, respectively, for real estate and undeveloped land acquisitions, compared to
$114.4 million
and
$50.4 million
for real estate and undeveloped land acquisitions in the same period in
2017
.
|
•
|
Real estate development costs were
$104.3 million
during the
three months ended March 31, 2018
, compared to
$112.7 million
for the same period in
2017
.
|
•
|
Sales of land and depreciated properties provided
$131.4 million
in net proceeds for the
three months ended March 31, 2018
, compared to
$103.1 million
for the same period in
2017
.
|
•
|
The increased cash inflows reflected in the Other Assets line of the Consolidated Statements of Cash Flows for the
three months ended March 31, 2018
was the result of receiving repayments of $39.8 million on two seller-financed mortgages. There were no such repayments in 2017.
|
•
|
Second generation tenant improvements, leasing costs and building improvements totaled
$14.1 million
for the
three months ended March 31, 2018
compared to
$10.4 million
for the same period in
2017
.
|
•
|
For the
three months ended March 31, 2018
, we received
$9.4 million
in capital distributions from unconsolidated joint ventures, primarily related to the sale of four properties within two of our joint ventures, compared to
$4.9 million
during the same period in
2017
.
|
•
|
During the
three months ended March 31, 2018
, the Partnership repaid
one
secured loan for
$215,000
. The Partnership repaid two secured loans for $15.9 million during the same period in
2017
.
|
•
|
For the
three months ended March 31, 2018
, the Partnership increased net borrowings on the Partnership's unsecured line of credit by
$75.0 million
, compared to an increase of
$189.0 million
of net borrowings for the same period in
2017
.
|
•
|
We paid regular cash dividends or distributions totaling
$71.4 million
and
$67.6 million
for the
three months ended March 31, 2018
and
2017
, respectively.
|
•
|
Changes in book cash overdrafts are classified as financing activities within our consolidated Statements of Cash Flows. Book cash overdrafts were $2.9 million and $20.6 million at March 31, 2018 and 2017, respectively.
|
|
Remainder of 2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
Thereafter
|
|
Face Value
|
|
Fair Value
|
||||||||||||||||
Fixed rate
secured debt
|
$
|
3,438
|
|
|
$
|
272,215
|
|
|
$
|
3,583
|
|
|
$
|
12,163
|
|
|
$
|
3,311
|
|
|
$
|
13,178
|
|
|
$
|
307,888
|
|
|
$
|
320,652
|
|
Weighted average
interest rate
|
6.50
|
%
|
|
7.63
|
%
|
|
5.98
|
%
|
|
5.73
|
%
|
|
6.06
|
%
|
|
6.07
|
%
|
|
7.44
|
%
|
|
|
|||||||||
Variable rate
secured debt
|
$
|
300
|
|
|
$
|
300
|
|
|
$
|
300
|
|
|
$
|
300
|
|
|
$
|
300
|
|
|
$
|
1,000
|
|
|
$
|
2,500
|
|
|
$
|
2,500
|
|
Weighted average
interest rate
|
1.67
|
%
|
|
1.67
|
%
|
|
1.67
|
%
|
|
1.67
|
%
|
|
1.67
|
%
|
|
1.67
|
%
|
|
1.67
|
%
|
|
|
|||||||||
Fixed rate
unsecured debt
|
$
|
2,030
|
|
|
$
|
2,858
|
|
|
$
|
1,498
|
|
|
$
|
250,000
|
|
|
$
|
600,000
|
|
|
$
|
1,275,000
|
|
|
$
|
2,131,386
|
|
|
$
|
2,129,390
|
|
Weighted average
interest rate
|
6.26
|
%
|
|
6.26
|
%
|
|
6.26
|
%
|
|
3.91
|
%
|
|
4.20
|
%
|
|
3.72
|
%
|
|
3.88
|
%
|
|
|
|||||||||
Variable rate unsecured
line of credit*
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
75,000
|
|
|
$
|
75,000
|
|
|
$
|
75,000
|
|
Rate at March 31, 2018
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
2.75
|
%
|
|
2.75
|
%
|
|
|
|
|
|
|
3.1
|
|
|
|
|
|
|
|
3.2
|
|
|
|
|
|
|
|
3.3
|
|
|
|
|
|
|
|
3.4 (i)
|
|
|
|
|
|
|
|
3.4 (ii)
|
|
|
|
|
|
|
|
3.4 (iii)
|
|
|
|
|
|
|
|
3.4 (iv)
|
|
|
|
|
|
|
|
3.4 (v)
|
|
|
|
|
|
|
|
11.1
|
|
|
Statement Regarding Computation of Earnings.***
|
|
|
|
|
12.1
|
|
|
|
|
|
|
|
12.2
|
|
|
|
|
|
|
|
31.1
|
|
|
|
|
|
|
|
31.2
|
|
|
|
|
|
|
|
31.3
|
|
|
|
|
|
|
|
31.4
|
|
|
|
|
|
|
|
32.1
|
|
|
|
|
|
|
|
32.2
|
|
|
|
|
|
|
|
32.3
|
|
|
|
|
|
|
|
32.4
|
|
|
|
|
|
|
|
101.Def
|
|
|
Definition Linkbase Document
|
|
|
|
|
101.Pre
|
|
|
Presentation Linkbase Document
|
|
|
|
|
101.Lab
|
|
|
Labels Linkbase Document
|
|
|
|
|
101.Cal
|
|
|
Calculation Linkbase Document
|
|
|
|
|
101.Sch
|
|
|
Schema Document
|
|
|
|
|
101.Ins
|
|
|
Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
|
#
|
Represents management contract or compensatory plan or arrangement
|
|
|
*
|
Filed herewith.
|
**
|
The certifications attached as Exhibits 32.1, 32.2, 32.3 and 32.4 accompany this Quarterly Report on Form 10-Q and are "furnished" to the Securities and Exchange Commission pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed "filed" by the General Partner or the Partnership, respectively, for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.
|
***
|
Data required by Financial Accounting Standards Board Auditing Standards Codification No. 260 is provided in Note 8 to the Consolidated Financial Statements included in this Report.
|
|
|
|
|
|
DUKE REALTY CORPORATION
|
|
|
|
|
|
/s/ James B. Connor
|
|
|
James B. Connor
|
|
|
Chairman and Chief Executive Officer
|
|
|
|
|
|
/s/ Mark A. Denien
|
|
|
Mark A. Denien
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
|
|
|
|
DUKE REALTY LIMITED PARTNERSHIP
|
|
|
By: DUKE REALTY CORPORATION, its general partner
|
|
|
|
|
|
/s/ James B. Connor
|
|
|
James B. Connor
|
|
|
Chairman and Chief Executive Officer of the General Partner
|
|
|
|
|
|
/s/ Mark A. Denien
|
|
|
Mark A. Denien
|
|
|
Executive Vice President and Chief Financial Officer of the General Partner
|
|
|
|
|
|
|
Date:
|
May 4, 2018
|
|
|
|
|
1 Year Duke Realty Chart |
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