Duke Realty Announces Pricing of Debt Tender Offer

INDIANAPOLIS, IN--(Marketwired - Apr 2, 2015) - Duke Realty Corporation (NYSE: DRE), a leading industrial and medical office property REIT, announced today that its operating partnership, Duke Realty Limited Partnership ("Duke Realty"), has determined pricing of its previously announced tender offer (the "Tender Offer") to purchase for cash for a combined aggregate purchase price (exclusive of accrued and unpaid interest) of up to $500,000,000 (the "Maximum Tender Amount") its 8.25% Senior Notes due 2019 (CUSIP No.: 26441YAT4) (the "2019 Notes"), its 5.95% Senior Notes due 2017 (CUSIP No.: 26441YAM9) (the "2017 Notes"), its 6.75% Senior Notes due 2020 (CUSIP No.: 26441YAU1) (the "2020 Notes"), its 6.50% Senior Notes due 2018 (CUSIP No.: 26441YAQ0) (the "2018 Notes") and its 4.375% Senior Notes due 2022 (CUSIP No.: 26441YAV9) (the "2022 Notes"). The 2019 Notes, the 2017 Notes, the 2020 Notes, the 2018 Notes and the 2022 Notes are referred to collectively as the "Securities." In addition, no more than $175.0 million aggregate principal amount of the 2017 Notes will be purchased (the "2017 Tender Cap"). 

The following table sets forth some of the terms of the Tender Offer, including the Total Consideration:

Title of Security		CUSIP Number		Principal Amount Outstanding		Tender Cap		Acceptance Priority Level		Reference U.S. Treasury Security		Fixed Spread (basis points)		Early Tender Premium (per $1,000)		Total Consideration (per $1,000)(1)
8.25% Senior Notes due 2019		26441YAT4		$250,000,000		N/A		1		1.375% due 2/29/2020		60		$30.00		$1,262.69
5.95% Senior Notes due 2017		26441YAM9		$450,000,000		$175,000,000		2		0.50% due 2/28/2017		40		$30.00		$1,092.69
6.75% Senior Notes due 2020		26441YAU1		$250,000,000		N/A		3		1.375% due 2/29/2020		80		$30.00		$1,215.16
6.50% Senior Notes due 2018		26441YAQ0		$300,000,000		N/A		4		1.00% due 3/15/2018		55		$30.00		$1,138.33
4.375% Senior Notes due 2022		26441YAV9		$300,000,000		N/A		5		2.00% due 2/15/2025		100		$30.00		$1,091.91

(1) Inclusive of the Early Tender Premium.

The Tender Offer is being made upon and is subject to the terms and conditions set forth in the Offer to Purchase, dated March 19, 2015, and the related Letter of Transmittal. The Tender Offer will expire at 11:59 pm, New York City time, on April 15, 2015, unless extended or earlier terminated by Duke Realty (as the same may be extended, the "Expiration Date"). The deadline to validly withdraw tenders of Securities was 5:00 p.m., New York City time, on April 1, 2015. Consequently, Securities that have been tendered and not validly withdrawn, and Securities tendered after such date and time, may not be withdrawn except in certain limited circumstances where additional withdrawal rights are required by law.

The consideration to be paid in the Tender Offer for each series of Securities that are validly tendered on or prior to the Early Tender Date (as defined below) and accepted for purchase was determined in the manner described in the Offer to Purchase by reference to the applicable fixed spread over the yield to maturity of the applicable U.S. Treasury Security each as specified in the table above (the "Total Consideration"). Holders of Securities that were validly tendered and not withdrawn on or prior to 5:00 p.m., New York City time, on April 1, 2015 (the "Early Tender Date") and that are accepted for purchase will receive the applicable Total Consideration, which includes an early tender premium of $30.00 per $1,000 principal amount of the Securities accepted for purchase (the "Early Tender Premium"). The Total Consideration for each series of Securities was determined at 2:00 p.m., New York City time, today (the "Tender Offer Price Determination Date"), and is set forth in the table above.

Payments for Securities purchased will include accrued and unpaid interest from and including the last interest payment date applicable to the relevant series of Securities up to, but not including, the applicable settlement date for such Securities accepted for purchase. The settlement date for Securities that are validly tendered on or prior to the Early Tender Date and accepted for purchase is expected to be April 3, 2015, one business day following the Tender Offer Price Determination Date (the "Early Settlement Date").

Subject to the Maximum Tender Amount and the 2017 Tender Cap, all Securities validly tendered and not validly withdrawn on or before the Early Tender Date having a higher Acceptance Priority Level will be accepted before any tendered Securities having a lower Acceptance Priority Level. Subject to the Maximum Tender Amount and the 2017 Tender Cap, Securities that were validly tendered and not validly withdrawn on or before the Early Tender Date will be accepted for purchase in priority to other Securities tendered after the Early Tender Date even if such Securities tendered after the Early Tender Date have a higher Acceptance Priority Level than Securities tendered prior to the Early Tender Date. As the Tender Offer was over-subscribed at the Early Tender Date, it is expected that, subject to the priorities and proration rules applicable to the Tender Offer, only Securities validly tendered and not validly withdrawn as of such date will be purchased in accordance with the terms of the Tender Offer, and that no Securities tendered after the Early Tender Date will be purchased in the Tender Offer.

Securities of a series may be subject to proration if the aggregate purchase price for the Securities of such series validly tendered and not validly withdrawn would cause the Maximum Tender Amount to be exceeded or, with respect to the 2017 Notes, if the aggregate principal amount tendered is greater than the 2017 Tender Cap. As the Tender Offer was over-subscribed at the Early Tender Date, and the amount of 2017 Notes tendered exceeded the 2017 Tender Cap, the 2017 Notes and 2018 Notes will be subject to proration and none of the 2022 Notes will be accepted for purchase. Any Securities not accepted by Duke Realty due to proration and all 2022 Notes will be returned promptly.

Duke Realty's obligation to accept for payment and to pay for the Securities validly tendered in the Tender Offer is subject to the satisfaction or waiver of a number of general conditions described in the Offer to Purchase. Duke Realty's obligation was also subject to the satisfaction or waiver of the condition that Duke Realty must have completed the previously announced sale of its right, title and interest in a multi-city suburban office portfolio and have received the proceeds from such sale (the "Asset Sale Condition"), which condition was satisfied on April 1, 2015. Duke Realty reserves the right, subject to applicable law, to: (i) waive any and all conditions to the Tender Offer; (ii) extend or terminate the Tender Offer; (iii) increase or decrease the Maximum Tender Amount and/or increase, decrease or eliminate the 2017 Tender Cap; or (iv) otherwise amend the Tender Offer in any respect.

J.P. Morgan Securities LLC and Wells Fargo Securities, LLC are acting as Dealer Managers for the Tender Offer. The Information Agent and Tender Agent for the Tender Offer is D.F. King & Co., Inc. Copies of the Offer to Purchase, Letter of Transmittal and related offering materials are available by contacting the Information Agent at (866) 796-7184 (U.S. toll-free) and (212) 269-5550 (banks and brokers) or dre@dfking.com. Questions regarding the Tender Offer should be directed to J.P. Morgan Securities LLC at (800) 834-4666 (toll-free) or (212) 834-4811 (collect); or Wells Fargo Securities, LLC at (866) 309-6316 (toll-free) or (704) 410-4760 (collect). This news release shall not constitute an offer to sell, a solicitation to buy or an offer to purchase or sell any securities. The Tender Offer is being made only pursuant to the Offer to Purchase and related Letter of Transmittal and only in such jurisdictions as is permitted under applicable law. 

About Duke Realty Corporation

Duke Realty Corporation owns, maintains an interest in or has under development approximately 153.2 million rentable square feet of industrial and office assets, including medical office, in 22 major U.S. metropolitan areas. Duke Realty Corporation is publicly traded on the NYSE under the symbol DRE and is listed on the S&P MidCap 400 Index. More information about Duke Realty Corporation is available at www.dukerealty.com

Cautionary Notice Regarding Forward-Looking Statements

This news release may contain forward-looking statements within the meaning of the federal securities laws. All statements, other than statements of historical facts, including, among others, statements regarding the company's future financial position or results, future dividends, and future performance, are forward-looking statements. Those statements include statements regarding the intent, belief or current expectations of the company, members of its management team, as well as the assumptions on which such statements are based, and generally are identified by the use of words such as "may," "will," "seeks," "anticipates," "believes," "estimates," "expects," "plans," "intends," "should," or similar expressions. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that actual results may differ materially from those contemplated by such forward-looking statements. Many of these factors are beyond the company's abilities to control or predict. Such factors include, but are not limited to, (i) general adverse economic and local real estate conditions; (ii) the inability of major tenants to continue paying their rent obligations due to bankruptcy, insolvency or a general downturn in their business; (iii) financing risks, such as the inability to obtain equity, debt or other sources of financing or refinancing on favorable terms, if at all; (iv) the company's ability to raise capital by selling its assets; (v) changes in governmental laws and regulations; (vi) the level and volatility of interest rates and foreign currency exchange rates; (vii) valuation of joint venture investments, (viii) valuation of marketable securities and other investments; (ix) valuation of real estate; (x) increases in operating costs; (xi) changes in the dividend policy for the company's common stock; (xii) the reduction in the company's income in the event of multiple lease terminations by tenants; (xiii) impairment charges, (xiv) the effects of geopolitical instability and risks such as terrorist attacks; (xv) the effects of weather and natural disasters such as floods, droughts, wind, tornados and hurricanes; and (xvi) the effect of any damage to our reputation resulting from developments relating to any of items (ii) - (xv). Additional information concerning factors that could cause actual results to differ materially from those forward-looking statements is contained from time to time in the company's filings with the Securities and Exchange Commission. The company refers you to the section entitled "Risk Factors" contained in the company's Annual Report on Form 10-K for the year ended December 31, 2014. Copies of each filing may be obtained from the company or the Securities and Exchange Commission.

The risks included here are not exhaustive and undue reliance should not be placed on any forward-looking statements, which are based on current expectations. All written and oral forward-looking statements attributable to the company, its management, or persons acting on their behalf are qualified in their entirety by these cautionary statements. Further, forward-looking statements speak only as of the date they are made, and the company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time unless otherwise required by law.