Southern Florida gets a much needed boost to its commercial real estate sales to start the 2011 year. With the biggest-ticket sale in Southern Florida history, Duke Realty Corp. has begun closing on a $450 million purchase of buildings from Premier Commercial Realty. Duke, an Indianapolis-based real estate investment trust (NYSE: DRE), is assuming control of a 4.9 million-square-foot portfolio from the Pompano Beach-based Premier according to the reports.
The balance of the closings are expected to happen “shortly,” as Duke works its way through the process of dealing with Premier’s lenders and assuming loans, according to Ed Mitchell, Duke’s senior VP in South Florida (as reported in the South Florida Business Journal). As part of the deal Duke is assuming $292 million of debt the company said, and have assumed management and leasing of the properties as well.
The deal should give a much needed shot in the arm to South Florida’s abysmal commercial sales market. It’s fairly obvious that Duke saw it was getting a deal that was pennies on the dollar in a market that is primed to rebound, and they took advantage of it.
In a recent IBJ article, we learned that Duke Realty Corp. is riding high off of reporting a fourth-quarter profit in 2010 that was almost 70 percent higher than in 2009. It closed its best leasing year since 2007 and Duke finished with its highest annual portfolio occupancy rate since 2004.
The company reported a fourth quarter profit of $25.8 million on revenue of $329.8 million, and for the year earned $65.3 million on revenue of $1.4 billion. Duke Realty leased an astounding 26 million square feet in 2010.