Duke Realty Corporation (DRE), one of the largest commercial real estate companies in the U.S., sold a five-building office portfolio for $97 million as part of its portfolio repositioning attempt.
The sold off portfolio comprised two Cincinnati Class A buildings and three Nashville Class A buildings. The purchase was made through a joint venture managed by Nashville-based Smith/Hallemann partners. This joint venture includes local Nashville investors and a fund managed by Harbert Management Corporation.
The Cincinnati buildings, covered about 609,275 square feet of space, and had 90.0% leased. While the Nashville buildings, located in the Century City Office Park near Nashville International Airport covered around 379,264 square feet of space and were approximately 73% leased.
Duke Realty continues to reposition its portfolio and has exited certain markets in an attempt to concentrate in areas where it already has a strong presence. The portfolio repositioning is likely to improve the internal growth metrics as well as development opportunities, helping the company emerge strongeronce the real estate markets fully recover.
Duke Realty is expected to be a net seller of assets as the company repositions the portfolio away from suburban office toward industrial and medical office assets.
Duke Realty, a fully integrated owner, manager, and developer of industrial, office, and healthcare properties, faces stiff competition from Highwoods Properties Inc. (HIW). Duke Realty currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. We are also maintaining our long-term Neutral recommendation on the stock, which indicates that stock would perform in line with the broader market.
DUKE REALTY CP (DRE): Free Stock Analysis Report
HIGHWOODS PPTYS (HIW): Free Stock Analysis Report
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