Back to top

Analyst Blog

On Jun 13, 2014, we issued an updated research report on Duke Realty Corporation (DRE - Analyst Report), the Indianapolis, IN-based equity real estate investment trust (REIT).

Duke Realty’s strong development platform positions it to explore new growth opportunities in a better way. In first-quarter 2014, the company initiated five wholly owned new development projects. Given its operational strength, we believe that the company can continue its development activities going forward. Moreover, the availability of land banks in strategically important locations augurs well for Duke Realty’s development activities.

On Apr 30, Duke Realty reported its first-quarter 2014 core funds from operations (FFO) of 28 cents per share, which was in line with the Zacks Consensus Estimate. The reported figure was also up 7.7% from the prior-year quarter. Results in the quarter were mainly aided by a rise in revenues, partly offset by higher expenses.

Of late, the company has been focusing more on scaling down its suburban office assets to bolster its bulk industrial business. We expect these portfolio repositioning efforts to boost Duke Realty’s internal growth metrics in the near future.

However, the company’s significant development pipeline increases its operational risks, thereby exposing it to rising construction costs, entitlement delays and lease-up risks. In addition, a rise in interest rates is anticipated in the long run, which would raise Duke Realty’s interest expense.
Over the last 30 days, the Zacks Consensus Estimate for 2014 and 2015 FFO per share increased by a cent each to $1.16 and $1.23, respectively. The stock currently has a Zacks Rank #3 (Hold).

Some better-ranked equity REITs include The GEO Group, Inc. (GEO - Snapshot Report), Terreno Realty Corp. (TRNO - Snapshot Report) and Aviv REIT, Inc. (AVIV - Snapshot Report). All these stocks sport a Zacks Rank #1 (Strong Buy).

Note: FFO, a widely used metric to gauge the performance of REITs, are obtained after adding depreciation, amortization and other non-cash expenses to net income.

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
RPC INC RES 24.91 +8.35%
LITHIA MOTO… LAD 94.59 +4.60%
DELTA AIR L… DAL 39.15 +3.90%
FLAMEL TECH… FLML 14.51 +3.50%
SOUTHWEST A… LUV 28.87 +2.92%