Duke Realty Corp. (DRE), a real estate investment trust (REIT), reported FFO (fund from operations) of 33 cents and 4 cents per share in the fourth quarter and for full fiscal 2009, respectively, compared to 70 cents and $2.51 in the comparable periods in 2008. Fund from operations, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income. Excluding non-recurring items, FFO for the reported quarter was 31 cents per share compared to 67 cents in the year-earlier quarter, while FFO for the full fiscal 2009 was $1.45 compared to $2.48 in fiscal 2008.
During the reported quarter, Duke Realty reported a 5.9% decrease in same-store net operating income (NOI). Same-store NOI for full fiscal 2009 decreased 2.7% year over year. The overall portfolio occupancy of the company, including projects under development, was 87.8% at quarter end. Tenant retention for the quarter was 79.6%. The company executed major leases during the quarter totaling about 2 million square feet.
Duke Realty placed five properties in service during the quarter and completed one expansion totaling 702,000 square feet (83.6% pre-leased). At quarter end, the company had four wholly owned properties under development at an estimated total cost of $122.2 million. In addition, Duke Realty had two joint venture properties under development spanning 497,000 square feet at a total estimated cost of $157.8 million.
The company also started construction work on a medical office building (62,000 square feet) during the quarter. Duke Realty received proceeds of $144.4 million at a stabilized cap rate of 8.3% from the sale of non-strategic assets during the quarter. For full fiscal 2009, the company received gross proceeds of $299.7 million from the sale of non-strategic properties and land parcels.
During the quarter, Duke Realty renewed its unsecured revolving credit facility. Under the terms of renewal, the facility has a borrowing capacity of $850 million with an interest rate of 275 basis points plus LIBOR, maturing in February 2013. For full year 2009, Duke Realty raised over $1.6 billion of total capital from equity and unsecured debt offerings, asset sales and secured financing transactions.
At year-end 2009, the company had nearly $1 billion of liquidity available from its available unsecured line of credit and cash on hand, which is sufficient to repay all 2010 unsecured debt maturities.
With challenging macroeconomic environment, Duke Realty expects 2010 recurring FFO in the range of 95 cents to $1.15 per share.
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