New Joint Venture Between Duke Realty and CBRE Global Investors Closes on First Tranche of Three Assets Totaling 1.3 Million Square Feet

Rhea-AI Summary

Duke Realty Corporation (NYSE: DRE) has partnered with CBRE Global Investors to form a joint venture, with CBRE owning 80% and Duke Realty 20%. The initial tranche includes two facilities totaling 1.3 million square feet and one trailer lot valued at $157 million, located in Atlanta and Chicago. The Venture will leverage secured debt financing, expecting to cover 50-60% loan-to-value. Future tranches will involve additional properties in Baltimore, Pennsylvania, Seattle, and South Florida. This strategic move aims to monetize assets and manage portfolio risk.

Positive

• Partnership with CBRE Global Investors enhances asset management.
• Successful closing of the first tranche valued at $157 million indicates strong market interest.
• The venture allows Duke Realty to manage portfolio risk by monetizing leased assets.

Negative

• No significant negatives identified.

INDIANAPOLIS, July 27, 2021 (GLOBE NEWSWIRE) -- Duke Realty Corporation (NYSE: DRE, or “Duke Realty”), the largest domestic-only logistics REIT, and CBRE Global Investors, a leading global real assets investment management firm, today announced the formation of a joint venture (the “Venture”). The Venture will be 80% owned by a fund sponsored by CBRE Global Investors and 20% by Duke Realty. The Venture plans to place secured debt financing on the assets in an amount approximating 50 to 60 percent loan-to-value.

Overall Duke Realty plans to contribute seven (7) facilities totaling 4.8 million square feet and two trailer storage lots totaling 25 acres to the Venture that will close in three tranches. As part of the formation, today the partners closed on the first tranche of two (2) facilities totaling 1.3 million square feet and one (1) trailer lot totaling 17.2 acres, at an agreed upon value of $157 million. These assets are located in Atlanta and Chicago.   The second tranche consists of two (2) facilities and one (1) trailer lot in Baltimore and is expected to close later in the third quarter. The third tranche consists of three (3) facilities located in Pennsylvania, Seattle and South Florida, which are expected to close in early 2022.

“As we’ve alluded to on our last few earnings calls, we’ve intended to monetize a portion of assets leased to one of our largest customers to manage portfolio risk. With today’s transaction, we are pleased to partner with a high quality investment management firm like CBRE Global Investors, an entity we have had several successful transactions with in the past,” said Jim Connor, Duke Realty’s Chairman and CEO.

Gary Jaye, CBRE Global Investors’ Head of Americas Logistics Operator Division, also commented, “We have deep knowledge and scale in the logistics sector and believe it will continue to create vast future opportunities. We believe this investment with a best-in-class partner like Duke Realty supports our strategic ambitions for overweighting the sector to deliver real assets solutions that capitalize on market opportunities to drive outperformance.”

Advisors

Morgan Stanley & Co. LLC acted as exclusive financial advisor and Hogan Lovells US LLP as legal advisor to Duke Realty.

About Duke Realty Corporation

Duke Realty Corporation owns and operates approximately 163 million rentable square feet of industrial assets in 19 major logistics markets. Duke Realty Corporation is publicly traded on the NYSE under the symbol DRE and is a component of the S&P 500 Index. More information about Duke Realty Corporation is available at www.dukerealty.com.

About CBRE Global Investors

CBRE Global Investors is a global real assets investment management firm with $124.5 billion in assets under management* as of March 31, 2021. The firm sponsors investment programs across the risk/return spectrum for investors worldwide.

CBRE Global Investors is an independently operated affiliate of CBRE Group, Inc. (NYSE:CBRE). It harnesses the research, investment sourcing and other resources of the world’s largest commercial real estate services and investment firm (based on 2020 revenue) for the benefit of its investors. CBRE Group, Inc. has more than 100,000 employees serving clients in more than 100 countries. For more information about CBRE Global Investors, please visit www.cbreglobalinvestors.com.

*Assets under management (AUM) refers to the fair market value of real assets-related investments with respect to which CBRE Global Investors provides, on a global basis, oversight, investment management services and other advice and which generally consist of investments in real assets; equity in funds and joint ventures; securities portfolios; operating companies and real assets-related loans. This AUM is intended principally to reflect the extent of CBRE Global Investors’ presence in the global real assets market, and its calculation of AUM may differ from the calculations of other asset managers.

Duke Realty 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 although not all forward looking statements may contain such words. Forward-looking statements are not guaranteeing 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 and trade wars; (xv) the effects of natural disasters, including the current pandemic caused by the COVID-19 outbreak, as well as floods, droughts, wind, tornadoes and hurricanes; and (xvi) the effect of any damage to our reputation resulting from developments relating to any of items (i) – (xv). 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, 2020. 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. 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.
    

Duke Realty Contact Information:      Investors: Ron Hubbard 317.808.6060      Media: Gene Miller 317.808.6195

CBRE Global Investors Contact Information: Media: Pam Barnett 213.683.4368

 

FAQ

What is Duke Realty's latest joint venture involving DRE?

Duke Realty formed a joint venture with CBRE Global Investors, where CBRE holds 80% ownership, aimed at leveraging secured debt financing.

What properties are included in the Duke Realty and CBRE joint venture?

The first tranche includes two facilities in Atlanta and Chicago totaling 1.3 million square feet and one trailer lot.

What is the value of the first tranche in Duke Realty's joint venture?

The first tranche is valued at $157 million.

When will the next tranches of the joint venture close?

The second tranche in Baltimore is expected to close later in the third quarter, while the third tranche includes properties in Pennsylvania, Seattle, and South Florida, expected to close in early 2022.