Duke Realty Plans To Shed More Than 3M SF

INDIANAPOLIS-Duke Realty Corp. is on a selling spree in the Midwest, putting 2.2 million sf of office space up for sale in Cincinnati, about a third of the 6.5 million sf that it holds in the area, and selling 15 industrial buildings in St. Louis. Blue Real Estate, based in Beverly Hills, CA, bought the St. Louis holdings, about 865,000 sf, for $65 million.

It’s not that the company, which has 113 million sf of property in 20 cities, wants out of Cincinnati, or even the Midwest, says a Duke spokesman. “Of our top six markets, five are in the Midwest: Indianapolis, Cincinnati, St. Louis, Chicago and Columbus. The only market we’ve pulled out of is Cleveland, it’s not much of a growth market,” the spokesman tells GlobeSt.com.

Rather, he says the recent sale situations, at least mostly Cincinnati, is about recycling capital. “We’re making sure our capital stays in growth markets, and not in substandard markets,” he says.

The company is looking to sell Cincinnati buildings such as One Ashview Place in Blue Ash and the Enquirer building at 312 Elm St., as well as properties at Governor’s Hill and Governor’s Pointe in Mason, he tells GlobeSt.com. “We’re going to take capital and redeploy it to three submarkets, Blue Ash, Kenwood and West Chester. We’ve got a building about to open and another underway in both Blue Ash and West Chester, and we’re pursuing land in Kenwood.” The buildings in Cincinnati are about 86% occupied, and some brokers have reportedly estimated they’ll sell for up to $387 million.

The spokesman says the St. Louis properties were flex industrial buildings, with a vacancy rate of 9%, and were in the communities of St. Louis, Fenton, Maryland Heights and Olivette. Properties included the St. Louis Business Center, Fenton Interstate Buildings and Warson Commerce Center. Ted Ries, Blue Real Estate president, did not return phone calls for comment.