Duke Realty Corporation Reports First Quarter Results

INDIANAPOLIS, IN, Apr 29 (MARKET WIRE) --
Duke Realty Corporation (NYSE: DRE), an owner, manager and developer of
industrial, office and healthcare properties throughout the United
States, today reported results for the first quarter ended March 31, 2009.

Operating Highlights

-- Funds from operations (FFO) per share of $0.71 for the quarter, in line
with expectations.

-- Liquidity position enhanced to address debt maturities:

- $575 million raised in sale of 75.2 million shares of common stock
in follow-on public offering closed April 21, 2009;
- $156 million of 10-year secured debt financing completed;
- $280 million term sheet executed for seven-year secured financing;
- $170 million par value of unsecured debt obligations repurchased at
a discount;
- $62 million in cash generated from property and land sales;
- Joint venture partner contribution agreements executed; cash
proceeds of $33 million expected in second quarter;

-- 2009 FFO guidance reaffirmed: $1.42 - $1.64 per share as adjusted for
the additional shares issued in the April 2009 common stock offering,
($1.85 - $2.15 per share pre-offering).

"Despite the economic downturn, Duke's first quarter performance met
our expectations," said Dennis D. Oklak, chairman and chief executive
officer. "We remain committed to our long-term strategy as an owner,
manager and developer of industrial, office and healthcare properties. In
the short term, we are continuing to strengthen our capital position and
optimize performance of existing assets."

Financial Performance

-- Funds from operations ("FFO") per share for the first quarter of 2009
were $0.71 ($0.50 per share, excluding $33.1 million of gains realized from
the repurchase of the company's unsecured bonds during the quarter). This
compares with FFO per share of $0.57 realized in the first quarter of 2008,
as restated for the effects of a change in accounting for interest expense
attributable to the company's exchangeable unsecured notes maturing in
December 2011. The decrease in FFO per share from the first quarter of
2008 (excluding the effects of the $33.1 million of gains realized from the
repurchase of the company's unsecured bonds during the quarter) is the
result of a decrease in gains from sales of built-for-sale properties and
land, as well as lease termination fees.

-- Net income per diluted share (EPS) for the first quarter was $0.15,
compared with $0.02 for the first quarter of 2008. The variance is
primarily attributable to the effects of the gains realized from the
repurchase of the company's unsecured bonds during the quarter.

Financing Update and Common Stock Offering

The company announced the following transactions, which, in the aggregate,
created significant additional liquidity and strengthened the company's
balance sheet:

-- Completion on April 21, 2009 of an underwritten public offering of
75,210,000 shares of the company's common stock at a price per share of
$7.65. The offering raised $575 million ($552 million of net proceeds),
which the company used to repay outstanding borrowings under its unsecured
line of credit and for general corporate purposes.

-- Completion of $156 million of 10-year secured debt financing. The
loans are secured by geographically diverse portfolios of suburban office
and industrial assets. The proceeds were primarily used to repurchase
unsecured bonds with near-term maturities and to pay down the company's
line of credit.

-- Execution of a term sheet for a $280 million seven-year secured loan.
The company is actively discussing additional secured debt financing with
multiple lenders, which the company believes may generate proceeds of
approximately $200 million in 2009. To the extent that such loans are
finalized, they would also be secured by geographically diverse portfolios
of suburban office and industrial assets. As of March 31, 2009, the
company had $5.7 billion of in-service, unencumbered assets in its
portfolio.

-- Repurchase of $170 million in outstanding unsecured debt that was
scheduled to mature in 2009 through 2011. These obligations were
repurchased for $131 million at an average discount to par value of 23
percent.

-- Repayment in full of $125 million of 6.8 percent unsecured notes upon
maturity in February.

-- After applying the proceeds of the April 2009 common stock offering to
the balance outstanding on the line of credit, the amount available
increased to approximately $1.2 billion. The line of credit is scheduled
to mature in January 2010, and the company, in its sole discretion, may
extend this maturity by one year to January 2011.

The company's unsecured bond maturities are modest through December 31,
2010, amounting to $286 million, or less than seven percent of total debt
outstanding.

Portfolio Performance

-- Stabilized, in-service properties (124 million square feet) were 89.7
percent leased at March 31, 2009, compared with 92.4 percent at December
31, 2008. This decrease is attributable to the addition of five recently
developed properties aggregating 2.5 million square feet which were 49.2
percent leased at March 31, 2009, as well as to lease expirations during
the first quarter of 2009.

-- Tenant retention for the first quarter of 2009 was 68.2 percent, with
growth in net effective rents of 3.8 percent.

-- Same store net operating income decreased by 0.4 percent for the first
quarter of 2009, compared with the three-month period ended March 31, 2008.
Same store net operating income increased by approximately 2.5 percent for
the 12-month period ended March 31, 2009, compared with the 12-month period
ended March 31, 2008.

Real Estate Investment Activity

Development

Wholly Owned Properties

-- The company's wholly owned development pipeline at March 31, 2009
consisted mostly of projects that are in the final stages of completion.
These projects aggregated $371 million, with $196 million in remaining
costs to be funded. The pipeline comprised 17 properties (1.9 million
square feet), most of which were healthcare properties, and was 83 percent
pre-leased on average in the aggregate.

-- In accordance with its selective pursuit of new development, the
company began only one project during the quarter: a medical office
building for a hospital system affiliated with Ascension Health in Austin,
TX, with projected costs of $21.6 million.

-- The company placed into service two properties (112,000 square feet)
that were 90 percent leased on average.

Joint Venture Properties

-- The company's joint venture development pipeline at March 31, 2009
aggregated $373 million, with $158 million in remaining costs to be funded.
The pipeline consisted of five properties (2.1 million square feet) that
were 12 percent preleased on average. Each joint venture has obtained third-
party debt to finance construction of these properties. (All joint venture
costs and square footage are reported at 100 percent ownership.)

Acquisitions

No properties were acquired during the first quarter.

Dispositions

-- During the quarter, the company completed $62 million of asset
dispositions, including two office buildings in St. Louis aggregating
380,000 square feet. These two properties, together with 14 acres of land,
were sold for gross proceeds of $61 million to Scottrade at a
capitalization rate of 7.42 percent.

-- The company has executed agreements pursuant to which its joint
venture partner, CB Richard Ellis Realty Trust, will acquire three
additional properties from the company. Closing is scheduled to occur in
May 2009, subject to certain conditions, and is anticipated to provide
gross proceeds of $33 million.

Dividends Declared

The company's board of directors has declared a quarterly cash dividend on
the company's common stock of $0.17 per share, or $0.68 per share on an
annualized basis. The reduction in dividends per share from the fourth
quarter of 2008 is due to the issuance of additional shares in the April
2009 common stock offering. The first quarter dividend will be payable May
29, 2009 to shareholders of record as of May 14, 2009. The company's
policy is to pay aggregate annual dividends in 2009 in an amount
generally equal to its annual taxable income.

The board also declared the following dividends on the company's
outstanding preferred stock:

Quarterly
Class NYSE Symbol Amount/Share Record Date Payment Date
------------- ------------ ------------- -------------
Series J DREPRJ $ 0.414063 May 15, 2009 May 29, 2009
Series K DREPRK $ 0.406250 May 15, 2009 May 29, 2009
Series L DREPRL $ 0.412500 May 15, 2009 May 29, 2009
Series M DREPRM $ 0.434375 June 16, 2009 June 30, 2009
Series N DREPRN $ 0.453125 June 16, 2009 June 30, 2009
Series O DREPRO $ 0.523438 June 16, 2009 June 30, 2009

Earnings Guidance Reaffirmed

The company reaffirmed FFO guidance for 2009 of $1.42 - $1.64 per share,
as adjusted for the additional shares issued in the April 2009 common
stock offering, ($1.85 - $2.15 per share pre-offering). Guidance is
provided for informational purposes and is subject to change.

Actions Taken at Annual Meeting of Shareholders

At the company's annual meeting of shareholders today, all of the members
of the company's board of directors standing for election were re-elected
for a one-year term. As part of the company's corporate governance policy,
each director must stand for re-election annually. Shareholders also
ratified the board of directors' reappointment of KPMG LLP as the
company's independent public accountants for 2009 and approved the
company's Amended and Restated 2005 Long-Term Incentive Plan.

About Duke Realty Corporation

Duke Realty Corporation specializes in the ownership, management and
development of office, industrial, and healthcare real estate. The company
owns, maintains an interest in or has under development approximately 135
million rentable square feet in 21 U.S. cities. Duke Realty Corporation is
publicly traded on the NYSE under the symbol DRE and is listed on the S&P
MidCap 400 Index. More information about Duke is available at
www.dukerealty.com.

First Quarter Earnings Call and Supplemental Information

Duke is hosting a conference call tomorrow, April 30, 2009, at 3:00 p.m.
EDT to discuss its first quarter operating results. All investors and
other interested parties are invited to listen to the call. Access is
available through the Investor Relations section of the company's Web
site.

A copy of the company's supplemental information fact book will be
available after 6:00 p.m. EDT today through the Investor Relations section
of the company's Web site.

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, projected financing
sources, future transactions with joint venture partners, 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. Forward-looking statements are not
guarantees 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
companies' abilities to control or predict. Such factors include, but are
not limited to, (i) general adverse economic and local real estate
conditions, including the current economic recession; (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) increases in operating costs; (x) changes in the
dividend policy for the company's common stock; (xi) the reduction in the
company's income in the event of multiple lease terminations by tenants;
and (xii) impairment charges. 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. 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,
2008. 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.

Financial Highlights
(in thousands, except per share data)

------------------------
Three Months Ended
March 31,
------------------------
Operating Results 2009 2008
----------- -----------
Revenues from continuing operations $ 237,897 $ 226,539
Earnings from rental operations 57,489 60,431
Earnings from service operations 8,348 4,413
Funds from operations available for common
shareholders - Basic 105,793 83,127
Funds from operations available for common
shareholders - Diluted 110,614 87,591
Net income available for common shareholders -
Basic 22,732 2,203
Net income available for common shareholders -
Diluted 23,792 2,341

Per Share:
Funds from operations available for common
shareholders - Basic (1) $ 0.50 $ 0.57
Funds from operations available for common
shareholders - Diluted (1) $ 0.50 $ 0.57
Net income available for common shareholders -
Basic $ 0.15 $ 0.02
Net income available for common shareholders -
Diluted $ 0.15 $ 0.02
Dividend payout ratio of funds from operations 50.0% 84.2%
Weighted average shares outstanding
Basic - Funds From Operations and Net Income 148,488 146,331
Diluted - Funds From Operations and Net Income 155,747 154,596

------------------------
March 31, December 31,
Balance Sheet Data 2009 2008
----------- -----------
Net real estate investments $ 6,075,210 $ 6,096,519
Total assets 7,676,419 7,690,883
Total debt 4,332,910 4,276,990
Shareholders' equity 2,833,377 2,844,019
Common shares outstanding at end of period 148,547 148,420

(1) Excludes gains of $33.1 million or $0.21 per share from repurchases of
debt in 1Q 2009.

Reconciliation of Net Income to Funds From Operations
(in thousands, except per share data)

Three Months Ended
December 31,
(Unaudited)
--------------------------------------------------
2009 2008
------------------------- ------------------------
Wtd. Wtd.
Avg. Per Avg. Per
Amount Shares Share Amount Shares Share
--------- ------- ------ -------- ------- ------
Net Income Available
for Common Shares $ 23,247 $ 2,533
Less Income Allocated
to Participating
Securities (515) ($ 330)
--------- --------
Basic Net Income
Available for Common
Shares $ 22,732 148,488 $ 0.15 $ 2,203 146,331 $ 0.02
Add back:
Minority interest
in earnings of
unitholders 1,060 6,766 138 7,858
Other potentially
dilutive shares 493 407
--------- ------- -------- -------
Diluted Net Income
Available for Common
Shares $ 23,792 155,747 $ 0.15 $ 2,341 154,596 $ 0.02
========= ======= ====== ======== ======= ======

Reconciliation to Funds
From Operations
("FFO")
Net Income Available
for Common Shares $ 23,247 148,488 $ 2,533 146,331 $ 0.00
Adjustments:
Depreciation and
Amortization 80,208 79,121
Company Share of
Joint Venture
Depreciation
and amortization 11,218 6,928
Earnings from
depreciable
property
sales-wholly owned (5,119) (1,110)
Earnings from
depreciable
property sales-JV 0 (19)
Minority interest
share of
adjustments (3,761) (4,326)
--------- ------- -------- -------
Basic Funds From
Operations 105,793 148,488 $ 0.71 83,127 146,331 $ 0.57
Minority interest
in earnings of
unitholders 1,060 6,766 138 7,858
Minority interest
share of
adjustments 3,761 4,326
Other potentially
dilutive shares 493 407
--------- ------- -------- -------
Diluted Funds From
Operations $ 110,614 155,747 $ 0.71 $ 87,591 154,596 $ 0.57
Less gains on
repurchase of debt (33,062) -
--------- ------- -------- -------
Diluted Funds From
Operations, excluding
gains on repurchase of
debt $ 77,552 155,747 $ 0.50 $ 87,591 154,596 $ 0.57
========= ======= ====== ======== ======= ======

Contact Information:
Investors:
Shona Bedwell
317.808.6169
shona.bedwell@dukerealty.com

Randy Henry
317.808.6060
randy.henry@dukerealty.com

Media:

Ken Turchi
317.808.6358
ken.turchi@dukerealty.com

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