Duke Realty Corp. (DRE), a real estate investment trust (REIT), recently announced plans to offer 23 million common shares to raise cash. The company will also grant the underwriters an option to purchase an additional 3.5 million shares to cover any over-allotments. Morgan Stanley (MS) and UBS Securities LLC, the U.S. broker-dealer unit of UBS AG (UBS) are acting as joint book-running managers for the public offering.
 
Duke Realty intends to utilize the net proceeds from the offer to purchase the 50% ownership interests of its joint venture partner in Dugan Realty LLC joint venture. The total transaction cost is $298.2 million, including the assumption of debt by Duke Realty. The joint venture currently owns a portfolio of 106 industrial buildings spanning 20.8 million square feet (85.3% leased as of March 31, 2010), along with 62.6 acres of undeveloped land in Midwest and Southeast U.S.
 
With the acquisition, Duke Realty would have full ownership of Dugan Realty’s assets and would be liable to repay all its debt. The joint venture has a $195.4 million secured loan due in October 2010 and an $87.6 million secured loan due in October 2012.
 
Duke Realty is one of the largest commercial real estate companies in the U.S. The company owns and operates over 134 million rentable square feet of industrial and office space in 18 major U.S. cities. For over 35 years, Duke Realty has leveraged its local presence and its integrated platform to drive returns, establishing itself as a premier publicly traded real estate developer in the country.
Read the full analyst report on “DRE”
Read the full analyst report on “MS”
Read the full analyst report on “UBS”
Zacks Investment Research