Last month, Duke said it would sell its medical office building (MOB) assets to Healthcare Trust of America Inc. (NYSE: HTA) for $2.8 billion. Connor said Duke had built the MOB operating platform to a size where there was enough critical mass to sell for a premium.
“We thought the timing was right and we’re very happy with the execution,” Connor said.
Proceeds from the MOB sale will allow Duke to ramp up acquisitions to the point where the split between acquisitions and development will be about even, according to Connor. However, he stressed the need for discipline as the company continues to focus on newer, class-A buildings in high-barrier markets.
Meanwhile, Connor noted that Duke is responding to the trend for faster customer delivery times by participating in infill development projects. The company has already completed 30 infill projects, Connor said, leasing to tenants that include Amazon, FedEx and UPS.
Retailers are finding that locating fulfillment and distribution centers closer to the population, even though the real estate is more expensive, is saving money and giving them a competitive advantage, Connor said.