Denny Oklak, chairman and CEO of Duke Realty Corp. (NYSE: DRE), joined REIT.com for a CEO Spotlight video interview at REITWorld 2012: NAREIT’s Annual Convention for All Things REIT at the Manchester Grand Hyatt in San Diego.
Duke Realty owns and operates more than 140.5 million rentable square feet of industrial and office assets, including medical offices, in 18 major U.S. cities. The company has its headquarters in Indianapolis.
Oklak was asked about Duke Realty’s efforts to reposition its portfolio. He said the company is progressing towards its goal of transitioning to a composition of 60 percent industrial assets, 25 percent suburban office assets and 15 percent medical office assets. The company started the effort three years ago with 55 percent of its assets in suburban offices.
“We had a long way to go. The good news is that with a lot of things that we’ve done, we’re now down to about 30 percent on suburban office,” said Oklak, who noted the company has approximately 53 percent of its assets in the industrial sector and 15 percent in medical office buildings. “We’ve really done very well on this. Fortunately, we’ve been able to execute by doing both acquisitions and dispositions, as well as development, so the timing has worked out well for us. We’re very pleased. We’ve got just a little bit more to go to hit our target, which we said we’d accomplish in 2013. I think we’re on track to do that.”
Oklak also discussed Duke Realty’s efforts to strengthen its balance sheet.
“We’ve made great progress. We’ve got a little bit further to go on the balance sheet side to hit our targets that we set out for 2013. We made some real progress this year,” said Oklak, pointing out that the company has raised $600 million in unsecured debt in 2012 at favorable interest rates and another $200 million in equity capital.
Oklak provided an update on Duke Realty’s development business.
“The pipeline is really as large as it has been in three or four years now since the economic downturn,” said Oklak, noting that new development starts have more than doubled in 2012 over the annual average of the previous three years.