INDIANAPOLIS—All three main sectors in the portfolio ofDuke Realty, one of the major REITs in the Midwestand Southeast, exhibited a great deal of strength in the firstquarter, leading Cowen and Company, aninternational equity research firm, to reiterate itsOutperform rating on the company's shares.

The rising US industrial economy, especially the continuingexpansion of e-commerce, for example, should drive up rents andpush SSNOI growth within the Indianapolis-based DRE's industrialportfolio, the researchers wrote in a just-published analysis.Industrials comprise 59% of its NOI. Occupancy in DRE's industrialproperties was 95.2% at the end of the quarter, and tenants occupy97.2% of the buildings with more than 500,000-square-feet, whichcomprise 41% of its industrial portfolio. “At this level, DRE canprioritize rents over occupancy, and 1Q14 leasing spreads of 8.3%were the highest since the financial crisis,” the researchersnote.

In the past few years, suburban office buildings have performedworse than all other real estate sectors, and provide 26% of DRE'sNOI. But during that time, the company shed its older officebuildings located in low-growth markets, the researchers wrote. Andof its current top five office markets, four saw increasedoccupancy in the past year and three had positive rent growth.Furthermore, “DRE is well positioned to benefit from growing demandfor class A office product in sunbelt markets like Raleigh, SouthFlorida and Nashville.