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|  Tuesday, November 6, 2007 |
| Duke gains on record development starts
Duke Realty Corp. reported a quarter of record development starts and third-quarter funds from operations of $99.9 million, up about 2.5 percent from a year ago. On a per share basis, Duke's funds from operations of 68 cents slightly beat analysts' expectations of 67 cents. Funds from operations are a key measure of success for Duke and other real estate investment trusts.
Duke began nearly $500 million in projects during the third quarter. Forty-eight percent of the space under construction has been pre-leased. Included in the mix are two 120,000-square-foot office projects in Fishers and Indianapolis. In all, Duke has 41 properties in development that account for 11.5 million square feet.
The developer's 682 active properties span 108.3 million square feet and were 93.5 percent occupied at Sept. 30, compared with 92.5 percent occupied a year ago. In the most recent quarter, Duke renewed 81 percent of its leases that were up for renewal; rents on those renewals rose 7.6 percent.
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|  | In the quarter, Duke sold properties for $110.5 million; it made no acquisitions.
Duke said it expects fourth-quarter funds from operations to be from 78 cents to 82 cents a share; analysts are predicting 79 cents a share. Duke reported that revenue in the period increased to $223.5 million, from $218.5 million a year ago.
Sales/acquisitions
Main and Graham LLC bought 20.5 acres at 95 N. Graham Road in Greenwood from East Main LLC, an affiliate of Republic Development. The purchase price was not disclosed. Kyle Hughes of Veritas Realty, LLC represented the buyer. Ross Reller and Jake Sturman of Meridian Real Estate represented the seller. The new owner plans to develop a retail center on the land. A start date for the project has not been determined and no tenants have been signed.
Leases/leasing contracts
- CVS leased 162,000 square feet of distribution space at 6883 W. County Road 350 N. in the Mount Comfort Commercial Park. The drugstore is the first tenant to occupy space in the 594,000-square-foot speculative building owned by New York-based KTR Capital Partners. Steve Schwegman and Brian Seitz of Meridian Real Estate represented the landlord. Jeff Castell of Colliers Turley Martin Tucker represented the tenant
- Audiovox Electronics Corp. leased 18,162 square feet at 111 Congressional Blvd. in Carmel. Michael Semler, with Colliers Turley Martin Tucker, represented the tenant. The landlord, Indianapolis-based REI Investments Inc., represented itself.
- Sales Diesel LLC leased 7,295 square feet at 11590 N. Meridian St. in Carmel. Matt Langfeldt and Rich Forslund with NAI Olympia Partners represented the tenant. Mike Napariu with REI Investments Inc. represented the landlord, Fidelity Office Building II LP.
- Walker Information leased 6,276 square feet at 6910 N. Shadeland Ave. Kara Riggle , of Resource Commercial Real Estate LLC, represented the landlord, Tharp Investments Inc. Sam Smith, also of Resource Commercial, represented the tenant.
Financials/investments/stock sales
- The NAREIT composite index gained 0.82 percent in September, after gaining 4.2 percent in October. The NAREIT index is made up of about 200 publicly traded real estate investment trusts in such sectors as industrial, retail, mortgage, self-storage and residential. In comparison, the NASDAQ gained 5.83 percent last month and the Dow Jones industrials gained 0.25 percent. Indiana's REIT stocks performed as follows in October: Simon Property Group Inc. gained 2.4 percent, Duke Realty Corp. lost 5.1 percent and Kite Realty Group Trust lost 5.3 percent.
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| Housing
- Indiana had the country's ninth highest foreclosure rate in the third quarter, with one filing for every 196 households, matching the national average, according to Irvine, Calif.-based RealtyTrac. The state ranked eighth in the prior quarter. The state's third-quarter filings are 10.2 percent higher than the year-ago period.
- The pace of mortgage loan applications was up 3.8 percent last week as rates on 30-year mortgages fell to their lowest since early May, according the Mortgage Bankers Association. Refinancing accounted for 49.6 percent of all loans, up 9.2 percent from the prior week. Rates on 30-year loans fell to 6.15 percent from 6.21 percent and to 5.79 percent, from 5.86 percent, on 15-year loans.
Construction
U.S. spending on commercial and public construction projects helped boost overall construction spending in September by 3 percent and offset another decline in spending on housing projects, the Commerce Department said. Private nonresidential construction spending gained 1.5 percent, while public construction spending increased 1.9 percent. But spending on housing projects declined 1.4 percent—the 19th consecutive monthly decline. That spending is down 16.4 percent over the last year.
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|  People
Paul Bradford has joined Flaherty & Collins Properties as vice president of pre-construction services.
Update on the Circle Truss
 What do you think of the Circle Truss proposal? The 280-foot-tall, $10-million stainless steel structure, designed by Kevin K. Pareson & Associates Inc., would be lined with LED lights lit with colors that could change for special occasions or at the request of visitors to a Web site. The monument effort got a fundraising boost recently, when the Efroymson Fund gave the planners $50,000 to pay for final designs. The effort, led by Rotary Club of Indianapolis, needs to raise a total of $300,000 to cover design costs for the monument at 11th and West streets. Advocates have promised to use only private funds for the venture. They hope the city, state or feds might eventually pitch in some funding to re-route roads around the project.
Read the item above and more real estate conversation starters at Property Lines, IBJ's real estate blog. You can link to the blog, which is hosted by real estate beat reporter Cory Schouten, at www.ibj.com.
Largest Downtown Office Complexes 
Correction:
Rich Forslund and Brett Spitzer of NAI Olympia Partners represented the buyer in the purchase of a building at 211 S. Ritter Ave. Last week's Real Estate Weekly named a different broker.
Edited by Tracy Donhardt
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