UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

(Mark One)

☒			ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2021

OR

☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from             to             .

Commission File Number: 1-9044 (Duke Realty Corporation) 0-20625 (Duke Realty Limited Partnership)

DUKE REALTY CORPORATION

DUKE REALTY LIMITED PARTNERSHIP

(Exact Name of Registrant as Specified in Its Charter)

Indiana

(Duke Realty Corporation)

35-1740409

(Duke Realty Corporation)

Indiana

(Duke Realty Limited Partnership)

35-1898425

(Duke Realty Limited Partnership)

(State or Other Jurisdiction of Incorporation or Organization)

(I.R.S. Employer Identification Number)

8711 River Crossing Boulevard

Indianapolis,

Indiana

46240

(Address of Principal Executive Offices)

(Zip Code)

Registrant's Telephone Number, Including Area Code:

(317)			808-6000

Securities registered pursuant to Section 12(b) of the Act:

Title of Class

Trading Symbol(s)

Name of Exchange on Which Registered

Duke Realty Corporation

Common Stock, $0.01 par value

DRE

New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Duke Realty Corporation

Yes

☒

No

☐

Duke Realty Limited Partnership

Yes

☒

No

☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  

Duke Realty Corporation

Yes

☐

No

☒

Duke Realty Limited Partnership

Yes

☐

No

☒

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    

Duke Realty Corporation

Yes

☒

No

☐

Duke Realty Limited Partnership

Yes

☒

No

☐

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Duke Realty Corporation

Yes

☒

No

☐

Duke Realty Limited Partnership

Yes

☒

No

☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer", "accelerated filer", "smaller reporting company", and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):

Duke Realty Corporation:

Large accelerated filer

☒

Accelerated filer  ☐

Non-accelerated filer  ☐

Smaller reporting company  ☐

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Duke Realty Limited Partnership:

Large accelerated filer

☐

Accelerated filer  ☐

Non-accelerated filer  ☒

Smaller reporting company  ☐

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

Duke Realty Corporation

Yes

☒

No

☐

Duke Realty Limited Partnership

Yes

☒

No

☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Duke Realty Corporation

Yes

☐

No

☒

Duke Realty Limited Partnership

Yes

☐

No

☒

The aggregate market value of the voting shares of Duke Realty Corporation's outstanding common shares held by non-affiliates of Duke Realty Corporation is $18.01 billion based on the last reported sale price on June 30, 2021.

The number of common shares of Duke Realty Corporation, $0.01 par value outstanding as of February 16, 2022 was 382,767,539.

DOCUMENTS INCORPORATED BY REFERENCE

Certain portions of Duke Realty Corporation's Definitive Proxy Statement for its 2022 Annual Meeting of Shareholders (the "2022 Proxy Statement") to be filed pursuant to Rule 14a-6 of the Securities Exchange Act of 1934, as amended, are incorporated by reference into this Form 10-K. Other than those portions of the 2022 Proxy Statement specifically incorporated by reference pursuant to Items 10 through 14 of Part III hereof, no other portions of the 2022 Proxy Statement shall be deemed so incorporated.

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EXPLANATORY NOTE

This report (the "Report") combines the annual reports on Form 10-K for the year ended December 31, 2021 of both Duke Realty Corporation and Duke Realty Limited Partnership. Unless stated otherwise or the context otherwise requires, references to "Duke Realty Corporation" or the "General Partner" mean Duke Realty Corporation and its consolidated subsidiaries; and references to the "Partnership" mean Duke Realty Limited Partnership and its consolidated subsidiaries. The terms the "Company," "we," "us" and "our" refer to the General Partner and the Partnership, collectively, and those entities owned or controlled by the General Partner and/or the Partnership.

Duke Realty Corporation is a self-administered and self-managed real estate investment trust ("REIT") and is the sole general partner of the Partnership, owning 99.1% of the common partnership interests of the Partnership ("General Partner Units") as of December 31, 2021. The remaining 0.9% of the common partnership interests ("Limited Partner Units" and, together with the General Partner Units, the "Common Units") are owned by limited partners. As the sole general partner of the Partnership, the General Partner has full, exclusive and complete responsibility and discretion in the day-to-day management and control of the Partnership.

The General Partner and the Partnership are operated as one enterprise. The management of the General Partner consists of the same members as the management of the Partnership. As the sole general partner with control of the Partnership, the General Partner consolidates the Partnership for financial reporting purposes, and the General Partner does not have any significant assets other than its investment in the Partnership. Therefore, the assets and liabilities of the General Partner and the Partnership are substantially the same.

We believe combining the annual reports on Form 10-K of the General Partner and the Partnership into this single report results in the following benefits:

•enhances investors' understanding of the General Partner and the Partnership by enabling investors to view the business as a whole in the same manner as management views and operates the business;

•eliminates duplicative disclosure and provides a more streamlined and readable presentation of information since a substantial portion of the Company's disclosure applies to both the General Partner and the Partnership; and

•creates time and cost efficiencies through the preparation of one combined report instead of two separate reports.

We believe it is important to understand the few differences between the General Partner and the Partnership in the context of how we operate as an interrelated consolidated company. The General Partner's only material asset is its ownership of partnership interests in the Partnership. As a result, the General Partner does not conduct business itself, other than acting as the sole general partner of the Partnership and issuing public equity from time to time. The General Partner does not issue any indebtedness, but does guarantee some of the unsecured debt of the Partnership. The Partnership holds substantially all the assets of the business, directly or indirectly, and holds the ownership interests related to certain of the Company's investments. The Partnership conducts the operations of the business and has no publicly traded equity. Except for net proceeds from equity issuances by the General Partner, which are contributed to the Partnership in exchange for General Partner Units or Preferred Units, the Partnership generates the capital required by the business through its operations, its incurrence of indebtedness and the issuance of Limited Partner Units to third parties.

Noncontrolling interests, shareholders' equity and partners' capital are the main areas of difference between the consolidated financial statements of the General Partner and those of the Partnership. The noncontrolling interests in the Partnership's financial statements include the interests in consolidated investees not wholly owned by the Partnership. The noncontrolling interests in the General Partner's financial statements include the same noncontrolling interests at the Partnership level, as well as the common limited partnership interests in the Partnership, which are accounted for as partners' capital by the Partnership.

In order to highlight the differences between the General Partner and the Partnership, there are separate sections in this report, as applicable, that separately discuss the General Partner and the Partnership, including separate financial statements and separate Exhibit 31 and 32 certifications. In the sections that combine disclosure of the General Partner and the Partnership, this report refers to actions or holdings as being actions or holdings of the collective Company.

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TABLE OF CONTENTS

Form 10-K

Item No.						Page(s)
PART I
1.			Business			3
1A.			Risk Factors			9
1B.			Unresolved Staff Comments			18
2.			Properties			19
3.			Legal Proceedings			22
4.			Mine Safety Disclosures			22
PART II
5.			Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities			23
6.			Reserved			24
7.			Management's Discussion and Analysis of Financial Condition and Results of Operations			25
7A.			Quantitative and Qualitative Disclosures About Market Risk			47
8.			Financial Statements and Supplementary Data			48
9.			Changes In and Disagreements With Accountants on Accounting and Financial Disclosure			48
9A.			Controls and Procedures			49
9B.			Other Information			50
9C.			Holding Foreign Companies Accountable Act Disclosure			50
PART III
10.			Directors, Executive Officers and Corporate Governance			50
11.			Executive Compensation			52
12.			Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters			52
13.			Certain Relationships and Related Transactions, and Director Independence			52
14.			Principal Accountant Fees and Services			52
PART IV
15.			Exhibits and Financial Statement Schedules			53
16.			Form 10-K Summary			114
Signatures						120

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IMPORTANT INFORMATION ABOUT THIS REPORT

Cautionary Notice Regarding Forward-Looking Statements

Certain statements contained in or incorporated by reference into this Report on Form 10-K for the General Partner and the Partnership, including, without limitation, those related to our future operations, constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The words "believe," "estimate," "expect," "anticipate," "intend," "plan," "strategy," "continue," "seek," "may," "could" and similar expressions or statements regarding future periods are intended to identify forward-looking statements, although not all forward-looking statements may contain such words.

These forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause our actual results, performance or achievements, or industry results, to differ materially from any predictions of future results, performance or achievements that we express or imply in this Report or in the information incorporated by reference into this Report. Some of the risks, uncertainties and other important factors that may affect future results include, among others: 

•The impact of the COVID-19 pandemic on our business, our tenants and the economy in general, including the measures taken by governmental authorities to address it;

•Changes in general economic and business conditions, including the financial condition of our tenants and the value of our real estate assets;

•Changes to U.S. laws, regulations, rules and policies;

•The General Partner's continued qualification as a REIT for U.S. federal income tax purposes;

•Heightened competition for tenants and potential decreases in property occupancy;

•Adverse events concerning our major tenants;

•Potential changes in the financial markets and interest rates;

•Volatility in the General Partner's stock price and trading volume;

•Our continuing ability to raise funds on favorable terms;

•Our ability to successfully identify, acquire, develop and/or manage properties on terms that are favorable to us;

•Potential increases in real estate construction costs including construction cost increases as the result of inflation and supply chain constraints;

•Our real estate asset concentration in the industrial sector and potential volatility in this sector;

•Our ability to successfully dispose of properties on terms that are favorable to us;

•Our ability to successfully integrate our acquired properties;

•Our ability to retain our current credit ratings;

•Inherent risks related to disruption of information technology networks and related systems and cyber security attacks;

•Inherent risks in the real estate business, including, but not limited to, tenant defaults, potential liability relating to environmental matters and liquidity of real estate investments; and

•Other risks and uncertainties described herein, as well as those risks and uncertainties discussed from time to time in our other reports and other public filings with the Securities and Exchange Commission (the "SEC").

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Although we presently believe that the plans, expectations and anticipated results expressed in or suggested by the forward-looking statements contained in or incorporated by reference into this Report are reasonable, all forward-looking statements are inherently subjective, uncertain and subject to change, as they involve substantial risks and uncertainties, including those beyond our control. New factors emerge from time to time, and it is not possible for us to predict the nature, or assess the potential impact, of each new factor on our business. Given these uncertainties, we caution you not to place undue reliance on these forward-looking statements. We undertake no obligation to update or revise any of our forward-looking statements for events or circumstances that arise after the statement is made, except as otherwise may be required by law.

The above list of risks and uncertainties is only a summary of some of the most important factors and is not intended to be exhaustive. Additional information regarding risk factors that may affect us is included under the caption "Risk Factors" in this Report, and is updated by us from time to time in Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other filings that we make with the SEC.

PART I

Item 1.  Business

Company Overview

The General Partner and Partnership collectively specialize in the ownership, management and development of industrial real estate.

The General Partner is a self-administered and self-managed REIT, which began operations upon completion of an initial public offering in February 1986.

The Partnership was formed in October 1993, when the General Partner contributed all of its properties and related assets and liabilities, together with the net proceeds from an offering of additional shares of its common stock, to the Partnership. Simultaneously, the Partnership completed the acquisition of Duke Associates, a full-service commercial real estate firm operating in the Midwest whose operations began in 1972. The General Partner is the sole general partner of the Partnership, owning 99.1% of the Common Units at December 31, 2021. The remaining 0.9% of the Common Units are owned by limited partners. Limited partners have the right to redeem their Limited Partner Units, subject to certain restrictions. Pursuant to the Fifth Amended and Restated Agreement of Limited Partnership, as amended (the "Partnership Agreement"), the General Partner is obligated to redeem the Limited Partner Units in shares of its common stock, unless it determines in its reasonable discretion that the issuance of shares of its common stock could cause it to fail to qualify as a REIT. Each Limited Partner Unit shall be redeemed for one share of the General Partner's common stock, or, in the event that the issuance of shares could cause the General Partner to fail to qualify as a REIT, cash equal to the fair market value of one share of the General Partner's common stock at the time of redemption, in each case, subject to certain adjustments described in the Partnership Agreement. The Limited Partner Units are not required, per the terms of the Partnership Agreement, to be redeemed in registered shares of the General Partner.

At December 31, 2021, we owned or jointly controlled 548 primarily industrial properties which encompassed 162.7 million rentable square feet (including 40 unconsolidated joint venture in-service properties with 12.9 million square feet, 29 consolidated properties under development with 8.5 million square feet and two unconsolidated joint venture properties under development with 1.2 million square feet). Our properties are leased by a diverse base of more than 800 tenants whose businesses include logistics, e-commerce, manufacturing, wholesale trade and retailing. We have one tenant, to whom we both lease a significant amount of space and also provide general contractor and construction management services, from whom we derived greater than 10.0% of our total revenues.

We also owned, including through ownership interests in unconsolidated joint ventures (with acreage not adjusted for our percentage ownership interest), 431 acres of land and controlled an additional 925 acres through purchase options.

Our headquarters and executive offices are located in Indianapolis, Indiana. We additionally have regional offices or significant operations in 18 other geographic or metropolitan areas including Atlanta, Georgia; Chicago, Illinois;

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Cincinnati, Ohio; Columbus, Ohio; Dallas, Texas; Houston, Texas; Minneapolis/St. Paul, Minnesota; Nashville, Tennessee; Raleigh, North Carolina; Savannah, Georgia; Seattle, Washington; Washington D.C./Baltimore, Maryland; Central Florida; New Jersey; Northern and Southern California; Pennsylvania and South Florida.

Company Strategies

Our overall strategy is to maximize cash flows from operations, increase our investment in Coastal Tier 1 markets (we define "Coastal Tier 1" markets as Southern California, Northern California, Seattle, Northern New Jersey and South Florida) and to maintain a strong balance sheet.

Operational Strategy

Our operational focus is to drive profitability by maximizing cash from operations and earnings through (i) maintaining property occupancy, increasing rental rates and prioritizing timely collection of monthly rental payments, while also keeping lease-related capital costs contained, by effectively managing our portfolio of existing properties and (ii) providing a broad line of real estate services to our tenants and to third parties.

Asset Strategy

Our strategic objectives include (i) increasing our investment in quality industrial properties through development, with sustainable design features that will meet customer needs; (ii) acquiring properties primarily in Coastal Tier 1 markets, which we believe provide the best potential for future rental growth; and (iii) maintaining an optimal land inventory through selected strategic land acquisitions to support new development activity. We continue to execute our asset strategy through a disciplined approach by identifying development opportunities and identifying select acquisition targets where the asset quality and pricing meet our objectives.

Capital Strategy

Our capital strategy is to maintain a strong balance sheet by actively managing the components of our capital structure in coordination with the execution of our overall operational and asset strategies. We are focused on maintaining our current investment grade ratings from our credit rating agencies. As of December 31, 2021, our senior unsecured notes have been assigned a rating of Baa1 by Moody's Investors Services and BBB+ by Standard & Poor's Ratings Group and we are focused on maintaining such ratings in order to maintain access to liquidity. A securities rating is not a recommendation to buy, sell, or hold securities and is subject to revision or withdrawal at any time by the rating organization.

In support of our capital strategy, we continually evaluate our portfolio and regularly identify and dispose of assets that no longer meet our long-term objectives.

We continue to focus on maintaining a balanced and flexible capital structure which includes: (i) extending and sequencing the maturity dates of our outstanding debt obligations; (ii) borrowing primarily at fixed rates; and (iii) issuing common equity as needed to maintain appropriate leverage parameters or support significant strategic developments or acquisitions. With our successes to date and continued focus on maintaining a strong balance sheet, we expect to be opportunistic in our investment opportunities.

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Competitive Conditions

As a fully integrated commercial real estate firm, we provide in-house leasing, management, development and construction services which we believe, coupled with our significant base of commercially zoned and unencumbered land in existing business parks, should give us a competitive advantage as a real estate operator and in future development activities.

We believe that the management of real estate opportunities and risks can be done most effectively at regional or on local levels. As a result, we intend to continue our emphasis on increasing our market share, to the extent it is in markets that align with our asset strategy, and effective rents in the primary markets where we own properties. We believe that this regional focus will allow us to assess market supply and demand for real estate more effectively as well as to capitalize on the strong relationships with our tenant base. In addition, we seek to further capitalize on our many strong relationships with customers that operate on a national level. As a fully integrated real estate company, we are able to arrange for or provide to our tenants not only well located and well maintained facilities, but also the capability for build-to-suit construction, tenant finish construction, and expansion flexibility.

All of our properties are located in areas that include competitive properties. Institutional investors, other REITs or local real estate operators generally own such properties; however, no single competitor or small group of competitors is dominant in our current markets. The supply of and demand for similar available rental properties may affect the rental rates we will receive on our properties. Other competitive factors include the attractiveness of the property location, the quality of the property and tenant services provided, and the reputation of the owner and operator.

Environmental, Social and Corporate Governance ("ESG")

We are focused on promoting our growth in a sustainable way, one that succeeds by delivering long-term value for our stakeholders. As part of our vision to deliver sustainable excellence in logistics real estate, we have a long-standing commitment to sustainable practices in environmental, social and corporate governance initiatives.

Environmental

We continuously look for new and better ways to minimize our environmental impact as well as that of our tenants. We are especially focused on energy consumption, water consumption and greenhouse gas emissions.

On December 17, 2019, we adopted a Sustainable Development Policy intended to increase the operational efficiency of our buildings and promote sustainable design principles. We are committed to integrating innovative, sustainable building design features in alignment with the U.S. Green Building Council® ("USGBC®") Leadership in Energy and Environmental Design (or LEED®), of which we have been a member of since 2008. In April 2021, we achieved acceptance into the USGBC® volume certification program to help streamline our sustainable development process. Specifically, we invest in sustainable practices, such as water usage reduction measures, efficient lighting, high efficient HVAC and renewable energy, construction waste reduction, recycling and user well-being attributes with the goal of positively impacting the experience of our tenants and increasing the value of our assets.

We do not have access to approximately 95% of the utility usage at our properties but, for the utilities in our control, we have been partnering with a third party data management provider to help monitor and manage usage.

Below is a chart showing our information for the applicable sustainability metrics that we monitor and report on in alignment with the Sustainability Accounting Standards Board standard for real estate:

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Topic			Accounting Metric			Code			Our Information
Energy Management			Description of how building energy management considerations are integrated into property investment analysis and operational strategy			IF-RE-130a.5			We integrate energy usage reduction measures on all new developments, incorporating LEED certification requirements and applicable aspects of our own sustainability policies/programs. These measures include energy modeling, high efficiency equipment (HVAC and lighting), and climate zone appropriate design factors. We have an ongoing lighting retrofit program, replacing outdated light fixtures with LED fixtures.
Water Management			Description of water management risks and discussion of strategies and practices to mitigate those risks			IF-RE-140a.4			We integrate water reduction measures on all new developments and renovation, incorporating LEED water efficient credit criteria or applicable aspects of our own sustainability policies/programs. These measures include the use of WaterSense® fixtures for all domestic usage, xeriscaping to minimize or eliminate the need for irrigation, and water usage monitoring, where available and appropriate.
Climate Change Adaptation			Area of properties located in 100-year flood zones, by property subsector			IF-RE-450a.1			4.5 million square feet.

In November 2021, in an effort to mitigate and reduce our greenhouse gas emissions, we set a goal to achieve carbon neutrality for our own operations by 2025 and to achieve carbon neutrality in alignment with the Paris Climate Accords by 2040. Carbon emissions from our operations are calculated as scope 1 and 2 emissions, which are direct and indirect emissions such as purchased power to operate our Duke Realty offices. Scope 3 emissions are the largest category and include the emissions created from our upstream and downstream activities including but not limited to tenant utilities from our owned buildings, the development process, waste and company travel. We have a comprehensive strategy to meet our goals by reducing carbon emissions, replacing energy sources with renewable energy and offsetting energy consumption.

We issued two green bonds in 2021 including an issuance of $500.0 million of senior unsecured notes in November 2021 with a stated interest rate of 2.25% due January 15, 2032 and an issuance of $450.0 million of senior unsecured notes in January 2021 with a stated interest rate of 1.75% due February 1, 2031. We now hold three green bonds totaling $1.35 billion. The net proceeds from these offerings will be used to finance future or refinance recently completed “eligible green projects”. These projects may include green buildings, energy efficiency projects, sustainable water and wastewater management systems, renewable energy projects, clean transportation solutions and pollution prevention and control. Green buildings are new development, redevelopment, or acquisitions of buildings, that have or are expected to receive Certified, Silver or Gold LEED certification through a 3rd party review and validation process by USGBC’s Green Building Certification Institute. In 2021, we also added a sustainability metric to our line of credit tied to growing the percentage of our LEED® developed projects.

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Social

We are committed to social responsibility by developing and maintaining strong relationships with our associates, customers, business partners, investors as well as the communities in which we operate and invest. We are committed to fair compensation and pay equity, fostering a dynamic and balanced work environment and providing associates with developmental opportunities to perform well and derive satisfaction from their work. We support and encourage our associates to participate in volunteer and community activities by providing each associate with two paid community days per year. We also have charitable contribution programs, such as our dollars for doers program (matching dollars for volunteer hours spent) and our matching gifts program (matching dollars for associates donations to charities). In addition, we partner with various charitable organizations, including the American Red Cross since 2017. Our sustainable development, energy, and resource usage policies help to create a cleaner and healthier environment for the communities we serve. In 2021, we completed a community solar project where we partnered with solar developers to install solar panels on the rooftops of several buildings we own to enable the capture of solar energy for the neighboring community. Through all of these initiatives and others, we endeavor to make a positive impact on the communities in which we conduct business.

Corporate Governance

Since our inception, we not only have strived to be a top-performer operationally, but also to lead in issues important to investors such as disclosure and corporate governance. The General Partner's system of governance reinforces this commitment and, as a limited partnership that has one general partner owning over 90% of the Partnership's common interest, the governance of the Partnership is necessarily linked to the corporate governance of the General Partner. Summarized below are the highlights of the General Partner's Corporate Governance initiatives. 

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Board Composition						• The General Partner's board is controlled by a supermajority (91.7%) of "Independent Directors," as such term is defined under the rules of the New York Stock Exchange (the "NYSE") • 55% of the Independent Directors are female or people of color and the General Partner's compensation and human capital and finance committees are both chaired by females
Board Committees						• The General Partner's board committee members are all Independent Directors
Lead Director						• The Lead Director is independent, serves as the Chairman of the General Partner's corporate governance committee and presides at all meetings of the board at which the Chair is not present, including executive sessions of the independent directors (among other responsibilities)
Board Policies						- General Partner's Bylaws include proxy access - Board Diversity, Equity and Inclusion Policy - No Shareholder Rights Plan (Poison Pill) - Code of Business Ethics applies to all directors and employees of the General Partner, including the Chief Executive Officer and senior financial officers; waivers applied to executive officers require the approval of (i) the General Partner's board of directors or (ii) the General Partner's corporate governance committee - Orientation program for new directors of the General Partner - Independence of directors of the General Partner is reviewed annually - Independent Directors of the General Partner meet at least quarterly in executive sessions - Independent Directors of the General Partner receive no compensation from the General Partner other than as directors - Equity-based compensation plans require the approval of the General Partner's shareholders - Board effectiveness and performance are reviewed annually by the General Partner's corporate governance committee - Individual director evaluations are performed annually - The General Partner's corporate governance committee conducts an annual review of the Chief Executive Officer succession plan - Independent Directors and all board committees of the General Partner may retain outside advisors, as they deem appropriate - Prohibition on repricing of outstanding stock options of the General Partner - Directors of the General Partner required to offer resignation upon job change - Majority voting for election of directors of the General Partner - Human Rights Policy - Shareholder Communications Policy
Ownership						Minimum Stock Ownership Guidelines apply to all directors and executive officers of the General Partner

The General Partner's Code of Business Ethics (which applies to all directors and associates of the General Partner, including the Chief Executive Officer and senior financial officers) and the Corporate Governance Guidelines are available in the Investor Relations/Corporate Governance section of the General Partner's website at www.dukerealty.com. A copy of these documents may also be obtained without charge by writing to Duke Realty Corporation, 8711 River Crossing Boulevard, Indianapolis, Indiana 46240, Attention: Investor Relations. If we amend our Code of Business Ethics as it applies to the directors and all executive officers of the General Partner or grant a waiver from any provision of the Code of Business Ethics to any such person, we may, rather than filing a current report on Form 8-K, disclose such amendment or waiver in the Investor Relations/Corporate Governance section of the General Partner's website at www.dukerealty.com.

Since 2020, we implemented a Vendor Code of Conduct that outlines our expectations and standards for how our vendors operate while doing business on our behalf.

Further, we publish an annual Corporate Responsibility Report which formally communicates our commitments and leadership around ESG issues.

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Through all of our environmental, social and corporate governance efforts, we demonstrate that operating and developing commercial real estate can be conducted with a conscious regard for the environment and community, while also benefiting our investors, associates, tenants and the communities in which we operate.

Human Capital

We had approximately 340 associates at December 31, 2021 and our average associate tenure was 12.2 years. We are committed to increasing transparency in the diversity of our workforce, so in 2021 we disclosed our 2020 EEO-1 report on our corporate website. The composition of our workforce and upper management at December 31, 2021 were as follows:

			Workforce						Upper Management
Female			46		%				24		%
Male			54		%				76		%
People of color			16		%				12		%
Other			84		%				88		%

Our compensation and human capital committee, a board committee, reviews associate turnover and diversity, as well as associate development and engagement programs. We also routinely conduct associate engagement surveys and have received numerous awards for being a great place to work. While attracting, developing and retaining our talent, we are dedicated to fair compensation, fostering an inclusive and diverse culture and a dynamic and balanced work environment, which provides associates with opportunities to perform well and derive satisfaction from their work. The compensation structures of many of our senior associates are directly tied to metrics or other objectives that support our corporate strategy.

We require ethical conduct by our associates and all associates are required to complete annual Code of Business Ethics training sessions, and associates and directors must sign off on our Code of Business Ethics every year.

Additional Information

For additional information regarding our investments and operations, see Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" and Item 8, "Financial Statements and Supplementary Data." For additional information about our business segments, see Item 8, "Financial Statements and Supplementary Data - Notes to Consolidated Financial Statements - (9) Segment Reporting."

Available Information

In addition to this Report, we file quarterly and current reports, proxy statements and other information with the SEC. All documents that are filed with the SEC are available free of charge on the General Partner's corporate website, which is www.dukerealty.com. We are not incorporating the information on the General Partner's website into this Report, and the General Partner's website and the information appearing on the General Partner's website is not included in, and is not part of, this Report. You may also access any document filed through the SEC's home page on the Internet (http://www.sec.gov).

Item 1A. Risk Factors

In addition to the other information contained in this Report, you should carefully consider, in consultation with your legal, financial and other professional advisors, the risks described below, as well as the risk factors and uncertainties discussed in our other public filings with the SEC under the caption "Risk Factors" in evaluating us and our business before making a decision regarding an investment in the General Partner's securities.

The risks contained in this Report are not the only risks that we face. Additional risks that are not presently known, or that we presently deem to be immaterial, also could have a material adverse effect on our financial condition, results of operations, business and prospects. The trading price of the General Partner's securities could decline due

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to the materialization of any of these risks, and its shareholders and/or the Partnership's unitholders may lose all or part of their investment.

This Report also contains forward-looking statements that may not be realized as a result of certain factors, including, but not limited to, the risks described herein and in our other public filings with the SEC. Please refer to the section in this Report entitled "Cautionary Notice Regarding Forward-Looking Statements" for additional information regarding forward-looking statements.

Risks Related to the COVID-19 Pandemic

The full effects of the COVID-19 pandemic are highly uncertain and cannot be predicted.

The outbreak of COVID-19, a respiratory disease caused by a novel corona virus, has spread globally since being declared a pandemic by the World Health Organization in March 2020. Although vaccines have been developed and are widely distributed in the United States, newer and more contagious variants of COVID-19 have further amplified the impact of the pandemic while significant components of the United States population are resistant to vaccination efforts.

The COVID-19 pandemic has also coincided with labor shortages and increased staffing costs for many companies operating in the United States. COVID-19 related disruptions to the international supply chain, including transportation and distribution delays, longer lead times for construction materials and increased construction costs have resulted in shortages of certain goods and inflationary conditions. These developments, as well as other ramifications of the COVID-19 pandemic may result in prolonged inflationary conditions that could have a detrimental impact on our tenant base, our ability to lease vacant space and our ability to grow through development and acquisition. Future adverse impacts to the economy caused by COVID-19 may also result in market volatility and large swings in global stock prices that may negatively impact our share price. These potential risks could also negatively impact our future ability to access capital, which would negatively impact our liquidity and our ability to execute our strategic plans.

The impacts of the outbreak could, among other things, negatively affect (i) the operation of our properties, (ii) the effectiveness of our strategic decision making, (iii) the operation of an effective cyber security function, (iv) the operation of our key information systems, (v) our ability to make timely filings with the SEC and (vi) our ability to maintain an effective control environment.

Risks Related to Our Business

Our use of debt financing could have a material adverse effect on our financial condition.

We are subject to the risks normally associated with debt financing, including the risk that our cash flow will be insufficient to meet required principal and interest payments and the long-term risk that we will be unable to refinance our existing indebtedness, or that the terms of such refinancing will not be as favorable as the terms of existing indebtedness. Additionally, we may not be able to refinance borrowings by our unconsolidated subsidiaries on favorable terms or at all. If our debt cannot be paid, refinanced or extended, we may not be able to make distributions to shareholders and unitholders at expected levels. Further, if prevailing interest rates or other factors at the time of a refinancing result in higher interest rates or other restrictive financial covenants upon the refinancing, then such refinancing would adversely affect our cash flow and funds available for operation, development and distribution.

We also have incurred, and may incur in the future, indebtedness that bears interest at variable rates. Thus, if market interest rates increase, so will our interest expense, which could reduce our cash flow and our ability to make distributions to shareholders and unitholders at expected levels.

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Debt financing may not be available and equity issuances could be dilutive to our shareholders and unitholders.

Our ability to execute our business strategy depends on our access to an appropriate blend of debt financing, including unsecured lines of credit and other forms of secured and unsecured debt, and equity financing, including common equity and, at times, preferred equity issued by the General Partner. Debt financing may not be available over a longer period of time in sufficient amounts, on favorable terms or at all. If the General Partner issues additional equity securities, instead of debt, to manage capital needs, the interests of our existing shareholders and unitholders could be diluted.

Financial and other covenants under existing credit agreements could limit our flexibility and adversely affect our financial condition.

The terms of our various credit agreements and other indebtedness require that we comply with a number of customary financial and other covenants, such as maintaining debt service coverage and leverage ratios and maintaining insurance coverage. These covenants may limit our flexibility in our operations, and breaches of these covenants could result in defaults under the instruments governing the applicable indebtedness even if we have satisfied our payment obligations. As a result, we would also likely be unable to borrow any further amounts under our other debt instruments and other debt obligations may be accelerated, which could adversely affect our ability to fund operations.

Downgrades in our credit ratings could increase our borrowing costs or reduce our access to funding sources in the credit and capital markets.

We have a significant amount of debt outstanding, consisting mostly of unsecured debt. We are currently assigned corporate credit ratings from Moody's Investors Service, Inc. and Standard and Poor's Ratings Group based on their evaluation of our creditworthiness. All of our debt ratings remain investment grade, but there can be no assurance that we will not be downgraded or that any of our ratings will remain investment grade. If our credit ratings are downgraded or other negative action is taken, we could be required, among other things, to pay additional interest and fees on outstanding borrowings under our revolving credit agreement.

Credit rating reductions by one or more rating agencies could also adversely affect our access to funding sources, the cost and other terms of obtaining funding as well as our overall financial condition, operating results and cash flow.

If we are unable to generate sufficient capital and liquidity, then we may be unable to pursue future development projects and other strategic initiatives.

To complete our ongoing and planned development projects, and to pursue our other strategic initiatives, we must continue to generate sufficient capital and liquidity to fund those activities. To generate that capital and liquidity, we rely upon funds from our existing operations, as well as funds that we raise through our capital raising activities. In the event that we are unable to generate sufficient capital and liquidity to meet our long-term needs, or if we are unable to generate capital and liquidity on terms that are favorable to us, then we may not be able to pursue development projects, acquisitions, or our other long-term strategic initiatives.

Our use of joint ventures may negatively impact our jointly-owned investments.

We have, and may continue to develop properties in, or contribute properties to, joint ventures with other persons or entities when circumstances warrant the use of these structures. Our participation in joint ventures is subject to the risks that: 

•We could become engaged in a dispute, or have conflicts of interests, with any of our joint venture partners that might affect our ability to develop or operate a property; and

•Our joint venture partners may have different objectives than we have regarding the appropriate timing and terms of any sale or refinancing of properties.

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Risks Related to the Real Estate Industry

Our net earnings available for investment or distribution to shareholders and unitholders could decrease as a result of factors related to the ownership and operation of commercial real estate, many of which are outside of our control.

Our business is subject to the risks incident to the ownership and operation of commercial real estate, many of which involve circumstances not within our control. Such risks include the following: 

•Changes in the general economic climate;

•The availability of capital on favorable terms, or at all;

•Increases in interest rates;

•Local conditions such as oversupply of property or a reduction in demand;

•Competition for tenants;

•Changes in market rental rates;

•Delay or inability to collect rent from tenants who are bankrupt, insolvent or otherwise unwilling or unable to pay;

•Difficulty in leasing or re-leasing space quickly or on favorable terms;

•Costs associated with periodically renovating, repairing and reletting rental space;

•Our ability to provide adequate maintenance and insurance on our properties;

•Our ability to control variable operating costs;

•Changes in government regulations; and

•Potential liability under, and changes in, environmental, zoning, tax and other laws.

Any one or more of these factors could result in a reduction in our net earnings available for investment or distribution to shareholders and unitholders.

Many real estate costs are fixed, even if income from properties decreases.

Our financial results depend on leasing space in our real estate to tenants on terms favorable to us. Our income and funds available for distribution to our shareholders and unitholders will decrease if a significant number of our tenants cannot meet their lease obligations to us or we are unable to lease properties on favorable terms. In addition, if a tenant does not pay its rent, we may not be able to enforce our rights as landlord without delays and we may incur substantial legal costs. Costs associated with real estate investment, such as real estate taxes, insurance, maintenance costs and our debt service payments, generally are not reduced when circumstances cause a reduction in income from the investment. As a result, we may have a reduction in our net earnings available for investment or distribution to our shareholders and unitholders.

Our real estate development activities are subject to risks particular to development.

We continue to selectively develop new properties for rental operations in our existing markets when accretive returns are present. These development activities generally require various government and other approvals, which we may not receive. In addition, we also are subject to the following risks associated with development activities: 

•Unsuccessful development opportunities could result in direct expenses to us;

•Construction costs could increase as the result of inflation and supply chain constraints;

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•Construction costs of a project may exceed original estimates, possibly making the project less profitable than originally estimated, or possibly unprofitable;

•Time required to complete the construction of a project or to lease up the completed project may be greater than originally anticipated, thereby adversely affecting our cash flow and liquidity;

•Occupancy rates and rents of a completed project may not be sufficient to make the project profitable; and

•Favorable sources to fund our development activities may not be available.

We may be unsuccessful in operating completed real estate projects.

We face the risk that the real estate projects we develop or acquire will not perform in accordance with our expectations. This risk exists because of factors such as the following: 

•Prices paid for acquired facilities are based upon a series of market judgments; and

•Costs of any improvements required to bring an acquired facility up to standards to establish the market position intended for that facility might exceed budgeted costs.

As a result, we may develop or acquire projects that are not profitable.

Our investments are concentrated in the industrial sector and our business would be adversely affected by an economic downturn in that sector.

Our investments in real estate assets are concentrated in the industrial sector. This concentration may expose us to the risk of economic downturns in this sector to a greater extent than if our business activities were more diversified.

We are exposed to the risks of defaults by tenants.

Any of our tenants may experience a downturn in their businesses that may weaken their financial condition. In the event of default or the insolvency of a significant number of our tenants, we may experience a substantial loss of rental revenue and/or delays in collecting rent and incur substantial costs in enforcing our rights as landlord. If a tenant files for bankruptcy protection, a court could allow the tenant to reject and terminate its lease with us. Our income and distributable cash flow would be adversely affected if a significant number of our tenants became unable to meet their obligations to us, became insolvent or declared bankruptcy.

A default by one of our largest tenants could have a more significant negative financial impact on our operations. As of December 31, 2021, our 10 largest tenants accounted for 21.3% of our total annualized net rental revenue and the two largest of these tenants accounted for 10.4% of our total annualized net rental revenue. Annualized net rental revenue equals the average annual rental property revenue over the terms of the respective leases excluding operating expenses and additional rent due as operating expense reimbursements. Annualized net rental revenue, for the purpose of this risk factor, also includes leases to our largest tenants in properties owned by unconsolidated joint ventures at their ownership percentage.

We may be unable to renew leases or relet space.

When our tenants decide not to renew their leases upon their expiration, we may not be able to relet the space. Even if our tenants do renew or we are able to relet the space, the terms of renewal or reletting (including the cost of renovations, if necessary) may be less favorable than current lease terms. If we are unable to promptly renew the leases or relet the space, or if the rental rates upon such renewal or reletting are significantly lower than current rates, then our income and distributable cash flow would be adversely affected, especially if we were unable to lease a significant amount of the space vacated by tenants in our properties.

Our insurance coverage on our properties may be inadequate.

We maintain comprehensive insurance on each of our facilities, including property, liability and environmental coverage. We believe this coverage is of the type and amount customarily obtained for real property. However, there are certain types of losses, generally of a catastrophic nature, such as hurricanes, earthquakes and floods or

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acts of war or terrorism that may be uninsurable or not economically insurable. We use our discretion when determining amounts, coverage limits and deductibles for insurance. These terms are determined based on retaining an acceptable level of risk at a reasonable cost. This may result in insurance coverage that in the event of a substantial loss would not be sufficient to pay the full current replacement cost of the damaged assets. Inflation, changes in building codes and ordinances, environmental considerations, acts of a governmental authority and other factors also may make it unfeasible to collect insurance proceeds to replace a facility after it has been damaged or destroyed. If an uninsured or underinsured loss occurred, we could lose both our investment in and anticipated profits and cash flow from a property, and we would continue to be obligated on any mortgage indebtedness or other obligations related to the property. We are also subject to the risk that our insurance providers may be unwilling or unable to pay our claims when made.

Our asset strategy may lead to long-term dilution.

Our asset strategy is to increase our investment concentration in Coastal Tier 1 markets. There can be no assurance that we will be able to execute our strategy or that our execution of such strategy will lead to improved results.

Acquired properties may expose us to unknown liability.

From time to time, we may acquire properties subject to liabilities and without any recourse, or with only limited recourse, with respect to unknown liabilities. As a result, if a liability were asserted against us based upon ownership of those properties, we might have to pay substantial sums to settle or contest it, which could adversely affect our results of operations and cash flow. Unknown liabilities with respect to acquired properties might include: 

•liabilities for clean-up of undisclosed environmental contamination;

•claims by tenants, vendors or other persons against the former owners of the properties;

•liabilities incurred in the ordinary course of business; and

•claims for indemnification by general partners, directors, officers and others indemnified by the former owners of the properties.

We could be exposed to significant environmental liabilities as a result of conditions of which we currently are not aware.

As an owner and operator of real property, we may be liable under various federal, state and local laws for the costs of removal or remediation of certain hazardous substances released on or in our property. Such laws often impose liability without regard to whether the owner or operator knew of, or was responsible for, the release of the hazardous substances. In addition, we could have greater difficulty in selling real estate on which hazardous substances were present or in obtaining borrowings using such real estate as collateral. It is our general policy to have Phase I environmental audits performed for all of our properties and land by qualified environmental consultants at the time of purchase. These Phase I environmental audits have not revealed any environmental liability that would have a material adverse effect on our business. However, a Phase I environmental audit does not involve invasive procedures such as soil sampling or ground water analysis, and we cannot be sure that the Phase I environmental audits did not fail to reveal a significant environmental liability or that a prior owner did not create a material environmental condition on our properties or land which has not yet been discovered. We could also incur environmental liability as a result of future uses or conditions of such real estate or changes in applicable environmental laws.

We are exposed to the potential impacts of future climate change and climate-change related risks.

We are exposed to potential physical risks from possible future changes in climate. We have a significant investment in properties in coastal markets such as Southern California, Northern California and South Florida and have also targeted those markets for future growth. Those coastal markets have historically experienced severe weather events, such as storms and drought, as well as other natural catastrophes such as wildfires and floods. If the frequency of extreme weather and other natural events increases due to climate change, our exposure to these events

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could increase. We may also be adversely impacted as a real estate owner, manager and developer in the future by stricter energy and water efficiency standards, water access for our buildings or greenhouse gas regulations.

Compliance with new laws or regulations relating to climate change, including compliance with “green” building codes, may require us to make improvements to our existing properties or result in increased operating costs that we may not be able to effectively pass on to our tenants. Any such laws or regulations could also impose substantial costs on our tenants, thereby impacting the financial condition of our tenants and their ability to meet their lease obligations and to lease or re-lease our properties. We cannot give any assurance that other such conditions do not exist or may not arise in the future. The potential impacts of future climate change on our real estate properties could adversely affect our ability to lease, develop or sell such properties.

Risks Related to Our Organization and Structure

If the General Partner were to cease to qualify as a REIT, it would lose significant tax benefits.

The General Partner intends to continue to operate so as to qualify as a REIT under the Internal Revenue Code of 1986, as amended (the "Code"). Qualification as a REIT provides significant tax advantages to the General Partner. However, in order for the General Partner to continue to qualify as a REIT, it must satisfy numerous requirements established under highly technical and complex Code provisions for which there are only limited judicial and administrative interpretations. Satisfaction of these requirements also depends on various factual circumstances not entirely within our control. The fact that the General Partner holds its assets through the Partnership further complicates the application of the REIT requirements. Even a technical or inadvertent mistake could jeopardize the General Partner's REIT status. Although we believe that the General Partner can continue to operate so as to qualify as a REIT, we cannot offer any assurance that it will continue to do so or that legislation, new regulations, administrative interpretations or court decisions will not significantly change the qualification requirements or the federal income tax consequences of qualification. If the General Partner were to fail to qualify as a REIT in any taxable year, it would have the following effects: 

•The General Partner would not be allowed a deduction for dividends distributed to shareholders and would be subject to federal corporate income tax (and any applicable state and local income taxes) on its taxable income at regular corporate income tax rates;

•Unless the General Partner was entitled to relief under certain statutory provisions, it would be disqualified from treatment as a REIT for the four taxable years following the year during which it ceased to qualify as a REIT;

•The General Partner's net earnings available for investment or distribution to its shareholders would decrease due to the additional tax liability for the year or years involved; and

•The General Partner would no longer be required to make any distributions to shareholders in order to qualify as a REIT.

As such, the General Partner's failure to qualify as a REIT would likely have a significant adverse effect on the value of the General Partner's securities and, consequently, the Partnership's Units.

REIT distribution requirements limit the amount of cash we have available for other business purposes, including amounts that we need to fund our future capital needs.

To maintain its qualification as a REIT under the Code, the General Partner must annually distribute to its shareholders at least 90% of its REIT taxable income, determined without regard to the dividends-paid deduction and excluding net capital gains. The General Partner intends to continue to make distributions to its shareholders to comply with the 90% distribution requirement. However, this requirement limits our ability to accumulate capital for use for other business purposes. If we do not have sufficient cash or other liquid assets to meet the distribution requirements of the General Partner, we may have to borrow funds or sell properties on adverse terms in order to meet the distribution requirements. If the General Partner fails to satisfy the distribution requirement, it would cease to qualify as a REIT.

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U.S. federal income tax treatment of REITs and investments in REITs may change in a manner that could adversely affect us or shareholders.

Legislative, regulatory or administrative changes could be enacted or promulgated at any time, either prospectively or with retroactive effect, and may adversely affect us and/or shareholders.

General Risk Factors

Our business and operations could suffer in the event of system failures or cyber security attacks.

Our systems are vulnerable to damages from any number of sources, including energy blackouts, natural disasters, terrorism, war, telecommunication failures and cyber security attacks, such as computer viruses, computer hacking, acts of vandalism or theft, malware or other malicious codes, ransomware, phishing, employee error or malfeasance, or other unauthorized access. In July 2021 we determined our computer network was affected by a cyber security incident, for which we conducted an investigation that is now closed. This incident did not result in any evidence of data belonging to us being misused and did not result in a material interruption to our business or operations, material costs or other adverse material consequences but any future system failure or accident that causes interruptions in our operations could result in a material disruption to our business. We may also incur additional costs to remedy damages caused by such disruptions. Any future significant compromise or breach of our data security, whether external or internal, or misuse of customer, associate, supplier or company data, could result in significant costs, lost sales, fines, lawsuits, and damage to our reputation. Any compromise of our security could also result in a violation of applicable privacy and other laws, unauthorized access to information of ours and others, significant legal and financial exposure, damage to our reputation, loss or misuse of the information and a loss of confidence in our security measures, which could harm our business.

We have programs in place to detect, contain and respond to data security incidents. However, the ever-evolving threats mean we and our third-party service providers and vendors must continually evaluate and adapt our respective systems and processes and overall security environment. Even the most well protected information, networks, systems and facilities remain potentially vulnerable when considering the rapid pace of change in this area. There can be no assurance that our efforts to maintain the security and integrity of our systems will be effective, or that we will be able to maintain our systems free from security breaches, system compromises, misuses of data, or other operational interruptions. Accordingly, we may be unable to prevent major security breaches or entirely mitigate the risk of other system interruptions or failures.

We could also be negatively impacted by similar disruptions to the operations of our vendors or outsourced service providers.

The General Partner's stock price and trading volume may be volatile, which could result in substantial losses to its shareholders and to the Partnership's unitholders, if and when they convert their Limited Partner Units to shares of the General Partner's common stock.

The market price of the General Partner's common stock could change in ways that may or may not be related to our business, our industry or our operating performance and financial condition. In addition, the trading volume in the General Partner's common stock may fluctuate and cause significant price variations to occur. Some of the factors that could negatively affect the General Partner's share price, or result in fluctuations in the price or trading volume of the General Partner's common stock, include uncertainty in the markets, general market and economic conditions, as well as those factors described in these "Risk Factors" and in other reports that we file with the SEC.

Many of these factors are beyond our control, and we cannot predict their potential effects on the price of the General Partner's common stock. If the market price of the General Partner's common stock declines, then its shareholders and the Partnership's unitholders, respectively, may be unable to resell their shares and units upon terms that are attractive to them. We cannot assure that the market price of the General Partner's common stock will not fluctuate or decline significantly in the future. In addition, the securities markets in general may experience considerable unexpected price and volume fluctuations.

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We are subject to certain provisions that could discourage change-of-control transactions, which may reduce the likelihood of the General Partner's shareholders receiving a control premium for their shares.

Indiana anti-takeover legislation and certain provisions in our governing documents, as we discuss below, may discourage potential acquirers from pursuing a change-of-control transaction with us. As a result, the General Partner's shareholders may be less likely to receive a control premium for their shares.

Ownership Restriction. Subject to certain exceptions, the General Partner's charter provides that no person or entity may beneficially own, or be deemed to own by virtue of the applicable constructive ownership provisions of the Code, more than 9.8% (in value or by number of shares, whichever is more restrictive) of the General Partner's outstanding common stock or 9.8% in value of its outstanding stock.

Unissued Preferred Stock. The General Partner's charter permits its board of directors to classify unissued preferred stock by setting the rights and preferences of the shares at the time of issuance. This power enables the General Partner's board to adopt a shareholder rights plan, also known as a poison pill. Although the General Partner has repealed its previously existing poison pill and its current board of directors has adopted a policy not to adopt a shareholder rights plan without shareholder approval, the General Partner's board can change this policy at any time. The adoption of a poison pill would discourage a potential bidder from acquiring a significant position in the General Partner without the approval of its board.

Business-Combination Provisions of Indiana Law. The General Partner has not opted out of the business-combination provisions of the Indiana Business Corporation Law. As a result, potential bidders may have to negotiate with the General Partner's board of directors before acquiring 10% of its stock. Without securing board approval of the proposed business combination before crossing the 10% ownership threshold, a bidder would not be permitted to complete a business combination for five years after becoming a 10% shareholder. Even after the five-year period, a business combination with the significant shareholder would either be required to meet certain per share price minimums as set forth in the Indiana Business Corporation Law or to receive the approval of a majority of the disinterested shareholders.

Control-Share-Acquisition Provisions of Indiana Law. The General Partner has not opted out of the provisions of the Indiana Business Corporation Law regarding acquisitions of control shares. Therefore, those who acquire a significant block (at least 20%) of the General Partner's shares may only vote a portion of their shares unless its other shareholders vote to accord full voting rights to the acquiring person. Moreover, if the other shareholders vote to give full voting rights with respect to the control shares and the acquiring person has acquired a majority of the General Partner's outstanding shares, the other shareholders would be entitled to special dissenters' rights.

Supermajority Voting Provisions. The General Partner's charter prohibits business combinations or significant disposition transactions with a holder of 10% of its shares unless: 

•The holders of 80% of the General Partner's outstanding shares of capital stock approve the transaction;

•The transaction has been approved by three-fourths of those directors who served on the General Partner's board before the shareholder became a 10% owner; or

•The significant shareholder complies with the "fair price" provisions of the General Partner's charter.

Among the transactions with large shareholders requiring the supermajority shareholder approval are dispositions of assets with a value greater than or equal to $1,000,000 and business combinations.

Operating Partnership Provisions. The limited partnership agreement of the Partnership contains provisions that could discourage change-of-control transactions, including a requirement that holders of at least 90% of the outstanding Common Units approve: 

•Any voluntary sale, exchange, merger, consolidation or other disposition of all or substantially all of the assets of the Partnership in one or more transactions other than a disposition occurring upon a financing or refinancing of the Partnership;

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•The General Partner's merger, consolidation or other business combination with another entity unless after the transaction substantially all of the assets of the surviving entity are contributed to the Partnership in exchange for Common Units;

•The General Partner's assignment of its interests in the Partnership other than to one of its wholly owned subsidiaries; and

•Any reclassification or recapitalization or change of outstanding shares of the General Partner's common stock other than certain changes in par value, stock splits, stock dividends or combinations.

We are dependent on key personnel.

The General Partner's executive officers and other senior officers have a significant role in the success of our Company. Our ability to retain our management group or to attract suitable replacements should any members of the management group leave our Company is dependent on the competitive nature of the employment market. The loss of services from key members of the management group or a limitation in their availability could adversely impact our financial condition and cash flow. Further, such a loss could be negatively perceived in the capital markets.

Item 1B.  Unresolved Staff Comments

We have no unresolved comments with the SEC staff regarding our periodic or current reports under the Exchange Act.

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Item 2.  Properties

Product Review

As of December 31, 2021, we own interests in 548 primarily industrial properties encompassing 162.7 million net rentable square feet (including 40 unconsolidated joint venture in-service properties with 12.9 million square feet, 29 consolidated properties under development with 8.5 million square feet and two unconsolidated joint venture properties under development with 1.2 million square feet).

Industrial Properties: We own interests in 545 industrial properties encompassing 162.4 million square feet (99.9% of our total square feet). These properties are primarily logistics facilities with clear ceiling heights of 28 feet or more.

Non-reportable: We own interests in three buildings, which are not industrial properties and are not presented within our reportable segments, totaling 211,000 square feet (0.1% of our total square feet).

See Consolidated Financial Statement Schedule III - Real Estate Properties and Accumulated Depreciation for a detailed listing of the Company’s properties and related encumbrances.

Land: We own, including through ownership interests in unconsolidated joint ventures (with acreage not adjusted for our percentage ownership interest), 431 acres of land and control an additional 925 acres through purchase options. All of the land that we directly own is intended to be used for the development of industrial properties and can support over 6.9 million square feet of industrial developments.

Property Descriptions

The following tables represent the geographic highlights of consolidated and unconsolidated joint venture in-service properties in our primary markets.

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Consolidated Properties

			Square Feet																								Annual Net Effective Rent (1)						Annual Net Effective Rent per Square Foot (2)						Percent of Annual  Net Effective Rent
			Industrial												Non-Reportable																											Overall						Percent of Overall
Primary Market
Southern California			16,586,113												—												16,586,113						11.8		%				$	125,697,500					$	7.58					15.8		%
New Jersey			8,555,906												—												8,555,906						6.1		%				90,344,759						10.56						11.4		%
South Florida			9,249,136												—												9,249,136						6.6		%				68,868,913						8.09						8.7		%
Chicago			13,853,198												—												13,853,198						9.9		%				64,512,452						4.66						8.1		%
Atlanta			13,299,470												—												13,299,470						9.5		%				56,346,766						4.25						7.1		%
Dallas			11,164,016												—												11,164,016						8.0		%				43,939,307						3.94						5.5		%
Cincinnati			9,114,047												91,843												9,205,890						6.5		%				38,375,871						4.20						4.8		%
Savannah			7,329,816												—												7,329,816						5.2		%				35,369,045						4.83						4.4		%
Indianapolis			9,345,171												—												9,345,171						6.7		%				35,217,401						3.77						4.4		%
Pennsylvania			5,685,384												—												5,685,384						4.1		%				31,994,324						5.63						4.0		%
Houston			5,824,310												—												5,824,310						4.2		%				29,107,288						5.15						3.7		%
Minneapolis-St. Paul			5,143,303												—												5,143,303						3.7		%				29,063,212						5.79						3.7		%
Central Florida			4,332,233												—												4,332,233						3.1		%				24,742,911						5.84						3.1		%
Seattle			3,709,836												—												3,709,836						2.6		%				23,984,257						7.53						3.0		%
Columbus			5,319,877												—												5,319,877						3.8		%				20,760,897						3.90						2.6		%
Nashville			3,645,266												—												3,645,266						2.6		%				20,620,521						6.54						2.6		%
Northern California			2,890,235												—												2,890,235						2.1		%				19,467,999						7.65						2.4		%
Raleigh			2,849,794												—												2,849,794						2.0		%				18,722,309						6.57						2.4		%
DC-Baltimore			1,918,738												—												1,918,738						1.4		%				15,446,846						8.23						1.9		%
Other (3)			—												119,030												119,030						0.1		%				3,487,188						29.30						0.4		%
Total			139,815,849												210,873												140,026,722						100.0		%				$	796,069,766					$	5.79					100.0		%
Percent of Overall			99.8		%										0.2		%										100.0		%
Annual Net Effective Rent per Square Foot (2)			$	5.77											$	22.55											$	5.79

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Unconsolidated Joint Venture Properties

			Square Feet												Annual Net Effective Rent (1)						Annual Net Effective Rent per Square Foot (2)						Percent of Annual  Net Effective Rent
			Industrial																											Percent of Overall
Primary Market
Dallas			6,047,818												46.8		%				$	30,217,889					$	5.00					50.9		%
Indianapolis			4,056,398												31.4		%				14,524,969						3.82						24.5		%
DC-Baltimore			1,363,958												10.5		%				7,691,934						5.64						12.9		%
Chicago			954,720												7.4		%				4,822,609						5.05						8.1		%
Atlanta			301,200												2.3		%				1,263,298						4.19						2.1		%
Cincinnati			57,886												0.4		%				398,667						6.89						0.7		%
Other (3)			152,944												1.2		%				472,951						3.09						0.8		%
Total			12,934,924												100.0		%				$	59,392,317					$	4.68					100.0		%
Percent of Overall			100.0		%
Annual Net Effective Rent per Square Foot (2)			$	4.68

 

			Percent Leased
			Consolidated Properties																		Unconsolidated Properties
			Industrial												Non-Reportable												Overall						Industrial																								Overall
Primary Market
Southern California			100.0		%										—												100.0		%				—																								—
New Jersey			100.0		%										—												100.0		%				—																								—
South Florida			92.1		%										—												92.1		%				—																								—
Chicago			100.0		%										—												100.0		%				100.0		%																						100.0		%
Atlanta			99.7		%										—												99.7		%				100.0		%																						100.0		%
Dallas			100.0		%										—												100.0		%				100.0		%																						100.0		%
Cincinnati			99.4		%										85.9		%										99.3		%				100.0		%																						100.0		%
Savannah			100.0		%										—												100.0		%				—																								—
Indianapolis			100.0		%										—												100.0		%				93.7		%																						93.7		%
Pennsylvania			100.0		%										—												100.0		%				—																								—
Houston			97.1		%										—												97.1		%				—																								—
Minneapolis-St. Paul			97.7		%										—												97.7		%				—																								—
Central Florida			97.8		%										—												97.8		%				—																								—
Seattle			85.8		%										—												85.8		%				—																								—
Columbus			100.0		%										—												100.0		%				—																								—
Nashville			86.5		%										—												86.5		%				—																								—
Northern California			88.0		%										—												88.0		%				—																								—
Raleigh			100.0		%										—												100.0		%				—																								—
DC-Baltimore			97.8		%										—												97.8		%				100.0		%																						100.0		%
Other (3)			—												100.0		%										100.0		%				100.0		%																						100.0		%
Total			98.1		%										93.8		%										98.1		%				98.0		%																						98.0		%

(1)Represents the average annual base rental payments, on a straight-line basis for the term of each lease, from space leased to tenants as of December 31, 2021, excluding amounts paid by tenants as reimbursement for operating expenses. Unconsolidated joint venture properties are shown at 100% of square feet and net effective rents, without regard to our ownership percentage.

(2)Annual net effective rent per leased square foot.

(3)Represents properties not located in our primary markets.

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Item 3.  Legal Proceedings

We are not subject to any pending legal proceedings, other than routine litigation arising in the ordinary course of business. We do not expect these legal proceedings to have a material adverse effect on our financial condition, results of operations, or liquidity.

Item 4.  Mine Safety Disclosures

Not applicable.

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PART II

Item 5.  Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information and Holders

The General Partner's common stock is listed for trading on the NYSE under the symbol "DRE." There is no established trading market for the Partnership's Common Units. As of February 16, 2022, there were 4,402 record holders of the General Partner's common stock and 73 record holders of the Partnership's Common Units. 

Stock Performance Graph

The following line graph compares the change in the General Partner's cumulative total shareholders' return on shares of its common stock to the cumulative total return of the Standard and Poor's 500 Stock Index ("S&P 500") and the FTSE NAREIT Equity REITs Index ("NAREIT Index") from December 31, 2016 to December 31, 2021. The graph assumes an initial investment of $100 in the common stock of the General Partner and each of the indices on December 31, 2016, and the reinvestment of all dividends. The performance graph is not necessarily indicative of future performance.

This graph and the accompanying text are not “soliciting material,” are not deemed filed with the SEC and are not to be incorporated by reference in any filing by the company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.

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Tax Characterization of Dividends

A summary of the tax characterization of the dividends paid per common share of the General Partner for the years ended December 31, 2021, 2020 and 2019 follows:

			2021						2020						2019
Total dividends paid per share			$	1.045					$	0.96					$	0.88
Ordinary income			91.5		%				74.6		%				80.7		%
Capital gains			8.5		%				25.4		%				19.3		%
			100.0		%				100.0		%				100.0		%

See Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources - Uses of Liquidity - Dividend and Distribution Requirements", below, for more information on our dividend policy.

Sales of Unregistered Securities

The General Partner did not sell any of its securities during the year ended December 31, 2021 that were not registered under the Securities Act.

Issuer Purchases of Equity Securities

From time to time, we may repurchase our securities under a repurchase program that initially was approved by the General Partner's board of directors and publicly announced in October 2001 (the "Repurchase Program").

During 2021 we did not repurchase any equity securities under the Repurchase Program.

On January 26, 2022 the General Partner's board of directors adopted a resolution that amended and restated the Repurchase Program and delegated authority to management to repurchase a maximum of $300.0 million of the General Partner's common shares, $750.0 million of the Partnership's debt securities and $500.0 million of the General Partner's preferred shares, subject to the prior notification of the Chairperson of the finance committee of the board of directors of planned repurchases within these limits.

Item 6.  Reserved    

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Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with the Consolidated Financial Statements included in Item 15. Exhibits and Financial Statement Schedules of this report and the matters described under Item 1A. Risk Factors.

A discussion regarding our financial condition and results of operations for 2021 compared to 2020 is under the Results of Operations section below. Our financial condition for 2019 and results of operations for 2020 compared to 2019 can be found under Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, which is incorporated herein by this reference to our Annual Report on Form 10-K for the fiscal year ended December 31, 2020, filed with the SEC on February 19, 2021, and is available on the SEC’s website at www.sec.gov and the Investor Relations section of our website at www.dukerealty.com.

Business Overview

The General Partner and Partnership collectively specialize in the ownership, management and development of industrial real estate. The General Partner is a self-administered and self-managed REIT that began operations in 1986 and is the sole general partner of the Partnership. The Partnership is a limited partnership formed in 1993, at which time all of the properties and related assets and liabilities of the General Partner, as well as proceeds from a secondary offering of the General Partner's common shares, were contributed to the Partnership. Simultaneously, the Partnership completed the acquisition of Duke Associates, a full-service commercial real estate firm operating in the Midwest whose operations began in 1972. We operate the General Partner and the Partnership as one enterprise, and therefore, our discussion and analysis refers to the General Partner and its consolidated subsidiaries, including the Partnership, collectively.

Our business operations primarily consist of two reportable operating segments: rental operations of industrial properties and service operations. Rental operations of industrial properties represent the ownership and development of industrial properties and is the primary component of our revenues and earnings. Service operations generate additional revenues from providing various real estate services primarily relating to development, construction management and property management services to customers, unconsolidated joint ventures and third-party owners.

Nationwide demand for industrial properties continues to be strong in the current economic environment as the COVID-19 pandemic has accelerated both consumer acceptance of e-commerce and the requirements of many retailers to increase inventory levels. Our operational focus is to maintain occupancy at high levels and to focus on rental rate growth. The occupancy of our consolidated industrial portfolio increased to 98.1% at December 31, 2021 as compared to 97.4% at December 31, 2020. Our annualized net effective rents for both renewals and new second generation leases, on a combined basis, executed in 2021 for consolidated properties grew by 34.8% over the previous leases. In the current environment of rising rental rates for industrial properties in most of the markets in which we operate, we believe there is potential for continued future rental rate growth to the extent we are able to renew or backfill expiring leases and maintain high levels of occupancy.

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Year in Review

We finished 2021 in strong financial condition and recorded improved year-over-year operating results. Despite the challenges of the COVID-19 variants throughout the year, the United States economy recovered earlier than many economists predicted in 2021, highlighted by vaccine rollouts and business re-openings. As the year progressed, however, inflation in the United States reached the highest levels seen since 1982. The combination of supply chain disruptions induced by COVID-19, government spending and pent-up demand caused by shutdowns led to demand outpacing supply in a number of industries, including logistics real estate. Significant congestion in major ports, most notably the Ports of Los Angeles and Long Beach, and a generalized disruption throughout the nation's logistics network have also contributed to these recent levels of inflation.

These supply chain issues have also impacted our construction and development activities as lead times for materials lengthened significantly and construction prices on materials have increased significantly. In order to adapt to the disruptions in the global supply chain, many companies are attempting to increase inventory levels and accumulate safety stock. We continued to maintain high occupancy levels through 2021 and quickly lease a significant portion of our speculative development projects.

The COVID-19 pandemic's impact on the overall global economy is continuing and the ultimate impact cannot be predicted at this time. Please see Part I, Item 1A, "Risk Factors" for additional information about the potential impacts the pandemic may have on our business and results of operations.

Highlights of our 2021 strategic and operational activities are as follows: 

•We generated $1.07 billion of total net cash proceeds from the disposition of 30 consolidated properties and 283 acres of wholly owned undeveloped land during the year ended December 31, 2021. As part of the dispositions, four industrial buildings and two trailer storage lots were contributed to a 20% owned unconsolidated joint venture.

•We acquired eight industrial properties for $447.6 million during the year ended December 31, 2021.

•We acquired 536 acres of land and one container storage lot under long term lease for $700.6 million during the year ended December 31, 2021.

•We started new development projects with expected total costs of $1.39 billion, which included $41.9 million of expected total costs for development projects started within two unconsolidated joint ventures, at our ownership share. The development projects started in 2021 were, in aggregate, 43.2% leased at December 31, 2021.

•We placed 18 newly completed consolidated development projects in service, which totaled 7.7 million square feet with total costs of $957.7 million at December 31, 2021. One fully leased, 517,000 square foot property was sold shortly after completion. The remaining new developments were 88.1% leased at December 31, 2021.

•The estimated cost of our properties under construction at December 31, 2021, including costs for unconsolidated properties shown at our ownership share, totaled $1.42 billion, with $709.1 million of such costs already incurred. The total estimated cost for two unconsolidated joint venture properties under construction at December 31, 2021 was $41.9 million, with $16.0 million of such costs already incurred. The consolidated properties under construction were 47.3% pre-leased, while the unconsolidated joint venture property under construction was 50.3% pre-leased.

•Income from continuing operations before income taxes was $880.2 million and $297.5 million for the twelve months ended December 31, 2021 and 2020, respectively.

•Same-property net operating income, on a cash basis, as defined hereafter under "Supplemental Performance Measures", increased by 5.3% for the twelve months ended December 31, 2021, as compared to the twelve months ended December 31, 2020.

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•As the result of leasing up space in speculative developments throughout 2021, the percentage of total square feet leased for our in-service portfolio of consolidated properties increased from 97.4% at December 31, 2020 to 98.1% at December 31, 2021.

•Total leasing activity for our consolidated properties totaled 31.7 million square feet in 2021 compared to 25.5 million square feet in 2020.

•Total leasing activity for our consolidated and unconsolidated joint venture properties in 2021 included 12.6 million and 326,000, respectively, square feet of lease renewals (excludes early renewals and short term renewals), which represented 76.8% and 34.9%, respectively, retention rates on a square foot basis. New second generation and renewal leases, on a combined basis, executed for consolidated properties and unconsolidated joint venture properties during the year resulted in 34.8% and 46.7%, respectively, increases to net effective rents ("net effective rents" is defined hereafter in the "Key Performance Indicators" section) when compared to the previous leases of the same space.

We utilized the capital generated from dispositions during the year to reduce debt and to fund our acquisition and development activities. Highlights of our key financing activities are as follows:

•During 2021, the General Partner issued 8.2 million common shares under its at the market ("ATM") equity program, generating gross proceeds of $408.3 million and, after deducting commissions and other costs, net proceeds of $403.6 million.

•In January 2021, we issued $450.0 million of senior unsecured notes that bear interest at a stated interest rate of 1.75%, have an effective interest rate of 1.83% and mature on February 1, 2031, the proceeds for which were allocated to finance or refinance eligible green projects.

•In June 2021, we redeemed $83.7 million of senior unsecured notes bearing a stated interest rate of 3.88% and with a scheduled maturity in 2022. In connection with the early redemption of these notes, we recognized a loss of $3.9 million consisting of a prepayment premium and the write-off of unamortized deferred financing costs.

•In August 2021, we repaid $250.0 million of senior unsecured notes bearing a stated interest rate of 3.63% and with a scheduled maturity in 2023. In connection with the early redemption of these notes, we recognized a loss of $13.9 million consisting of a prepayment premium and the write-off of unamortized deferred financing costs.

•In November 2021, we issued $500.0 million of senior unsecured notes that bear interest at a stated interest rate of 2.25%, have an effective interest rate of 2.38% and mature on January 15, 2032, the proceeds for which will be allocated to finance or refinance eligible green projects.

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Supplemental Performance Measures

The following table shows a reconciliation of net income attributable to common shareholders or common unitholders to the calculation of funds from operations ("FFO") attributable to common shareholders or common unitholders for the years ended December 31, 2021, 2020 and 2019, respectively (in thousands):

			2021						2020						2019
Net income attributable to common shareholders of the General Partner			$	852,895					$	299,915					$	428,972
Add back: Net income attributable to noncontrolling interests - common limited partnership interests in the Partnership			8,354						2,663						3,678
Net income attributable to common unitholders of the Partnership			861,249						302,578						432,650
Adjustments:
Depreciation and amortization			362,148						353,013						327,223
Company share of unconsolidated joint venture depreciation and amortization			9,383						9,265						10,083
Partnership share of gains on property sales			(585,685)						(127,811)						(235,098)
Gains on land sales			(12,917)						(10,458)						(7,445)
Income tax expense (benefit) not allocable to FFO			18,549						(5,112)						8,686
Impairment charges			—						5,626						—
Gains on sales of real estate assets - share of unconsolidated joint ventures			(20,106)						(822)						(21,239)
FFO attributable to common unitholders of the Partnership (1)			$	632,621					$	526,279					$	514,860
Additional General Partner Adjustments:
Net income attributable to noncontrolling interests - common limited partnership interests in the Partnership			(8,354)						(2,663)						(3,678)
Noncontrolling interest share of adjustments			2,222						(1,979)						(702)
FFO attributable to common shareholders of the General Partner (1)			$	626,489					$	521,637					$	510,480

(1) FFO is a non-GAAP measure used in the real estate industry and is computed in accordance with standards established by the National Association of Real Estate Investment Trusts ("Nareit"). Nareit FFO is used by industry analysts and investors as a supplemental operating performance measure of a REIT. Nareit FFO is calculated as net income attributable to the common shareholders of the General Partner in accordance with GAAP excluding depreciation and amortization related to real estate, gains and losses on sales of real estate assets (including real estate assets incidental to our business), gains and losses from change in control, impairment charges related to real estate assets (including real estate assets incidental to our business) and similar adjustments for unconsolidated partnerships and joint ventures, all net of related taxes.

The most comparable GAAP measure to Nareit FFO is net income attributable to common shareholders or common unitholders.  Management believes it is a useful indicator of consolidated operating performance, which improves the understanding of operating results of REITs among the investing public, makes comparisons of REIT operating results more meaningful and enables investors and analysts to readily identify the operating results of the long-term assets that form the core of a REIT's activity.

Net income attributable to the common shareholders of the General Partner for the year ended December 31, 2021, was $852.9 million, compared to net income of $299.9 million for the year ended December 31, 2020. Net income attributable to the common unitholders of the Partnership for the year ended December 31, 2021, was $861.2 million, compared to net income of $302.6 million for the year ended December 31, 2020. The increase in net income in 2021 for the General Partner and the Partnership, when compared to 2020, was primarily the result of higher gains on property sales, rental rate growth and increased occupancy.

Nareit FFO attributable to common shareholders of the General Partner totaled $626.5 million for the year ended December 31, 2021, compared to $521.6 million for 2020. Nareit FFO attributable to common unitholders of the Partnership totaled $632.6 million for the year ended December 31, 2021, compared to $526.3 million for 2020. The increase to Nareit FFO from 2020 for the General Partner and the Partnership was primarily driven by improved occupancy, rental rate growth, new developments being placed into service and leased up, and lower loss on debt extinguishment.

In addition to Nareit FFO we use (i) Property Level Net Operating Income - Cash Basis ("PNOI") and (ii) Same-Property Net Operating Income - Cash Basis ("SPNOI") as supplemental non-GAAP performance measures. Management believes that the use of PNOI and SPNOI combined with net income (which remains the primary measure of performance), improves the understanding of operating results of REITs among the investing public and

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makes comparisons of REIT operating results more meaningful. The most comparable GAAP measure to PNOI and SPNOI is income from continuing operations before income taxes.

PNOI and SPNOI each exclude expenses that materially impact our overall results of operations and, therefore, should not be considered as a substitute for income from continuing operations before income taxes, or any other measures derived in accordance with GAAP. Furthermore, these metrics may not be comparable to other similarly titled measures of other companies.

Property Level Net Operating Income - Cash Basis

PNOI is comprised of rental revenues from continuing operations less rental expenses and real estate taxes from continuing operations, along with certain other adjusting items. As a performance metric that consists of only the cash-based revenues and expenses directly related to ongoing real estate rental operations, PNOI is narrower in scope than Nareit FFO.

PNOI, as we calculate it, may not be directly comparable to similarly titled, but differently calculated, measures for other REITs. We believe that PNOI is another useful supplemental performance measure, as it is an input in many REIT valuation models and it provides a means by which to evaluate the performance of the properties within our Rental Operations segments. The operations of our industrial properties, as well as our non-reportable Rental Operations (our residual non-industrial properties that have not yet been sold, referred to throughout as "non-reportable"), are collectively referred to as "Rental Operations."

The major factors influencing PNOI are occupancy levels, acquisitions and sales, development properties that achieve stabilized operations, rental rate increases or decreases, and the recoverability of operating expenses.

Note 9 to the consolidated financial statements included in Part IV, Item 15 of this Report shows a calculation of our PNOI for the years ended December 31, 2021, 2020 and 2019 and provides a reconciliation of PNOI for our Rental Operations segments to income from continuing operations before income taxes.

Same-Property Net Operating Income - Cash Basis

We also evaluate the performance of our properties, including our share of properties we jointly control, on a "same-property" basis, using a metric referred to as SPNOI. We view SPNOI as a useful supplemental performance measure because it improves comparability between periods by eliminating the effects of changes in the composition of our portfolio.

On an individual property basis, SPNOI is generally computed in a consistent manner as PNOI.

We define our "same-property" population once a year at the beginning of the current calendar year and include buildings that were stabilized (the term "stabilized" means properties that have reached 90% leased or that have been in-service for at least one year since development completion or acquisition) as of January 1 of the prior calendar year. The "same-property" pool is also adjusted to remove properties that were sold subsequent to the beginning of the current calendar year. As such, the "same-property" population for the period ended December 31, 2021 includes all properties that we owned or jointly controlled at January 1, 2021, which had both been owned or jointly controlled and had reached stabilization by January 1, 2020, and have not been sold.

A reconciliation of income from continuing operations before income taxes to SPNOI is presented as follows (in thousands, except percentage data):

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						Three Months Ended December 31,									Percent						Twelve Months Ended December 31,									Percent
						2021						2020			Change						2021						2020			Change
Income from continuing operations before income taxes						$	107,305					$	166,418								$	880,167					$	297,537
Share of SPNOI from unconsolidated joint ventures						5,627						5,582									22,505						21,880
PNOI excluded from the "same-property" population						(30,619)						(13,508)									(95,678)						(31,005)
Earnings from Service Operations						(2,327)						(1,218)									(12,142)						(6,028)
Rental Operations revenues and expenses excluded from PNOI						(11,192)						(26,254)									(66,902)						(85,813)
Non-Segment Items						94,482						24,133									(88,940)						410,541
SPNOI						$	163,276					$	155,153		5.2		%				$	639,010					$	607,112		5.3		%

The composition of the line items titled "Rental Operations revenues and expenses excluded from PNOI" and "Non-Segment Items" from the table above are shown in greater detail in Note 9 to the consolidated financial statements included in Part IV, Item 15 of this Report.

We believe that the factors that impact SPNOI are generally the same as those that impact PNOI. The following table details the number of properties, square feet, average commencement occupancy and average cash rental rate for the properties included in SPNOI for the respective periods:

						Three Months Ended December 31,												Twelve Months Ended December 31,
						2021						2020						2021						2020
Number of properties						457						457						457						457
Square feet (in thousands) (1)						125,862						125,862						125,862						125,862
Average commencement occupancy percentage (2)						98.5%						98.4%						98.0%						98.1%
Average rental rate - cash basis (3)						$5.16						$4.99						$5.11						$4.93
(1) Includes the total square feet of the consolidated properties that are in the "same-property" population as well as 5.4 million square feet of space for unconsolidated joint ventures, which represents our ratable share of the 12.4 million total square feet of space for buildings owned by unconsolidated joint ventures that are in the "same-property" population.
(2) Commencement occupancy represents the percentage of total square feet where the leases have commenced.
(3) Represents the average annualized contractual rent per square foot for the three and twelve months ended December 31, 2021 and 2020 for tenants in occupancy in properties in the "same-property" population. Cash rent does not include the tenant's obligation to pay property operating expenses and real estate taxes. If a tenant was within a free rent period, its rent would equal zero for purposes of this metric.

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Key Performance Indicators

Our operating results depend primarily upon rental income from our Rental Operations. The following discussion highlights the metrics that drive the performance of our Rental Operations, which management uses to operate the business, and that we consider to be critical drivers of future revenues.

Occupancy Analysis

Occupancy is an important metric for management and our investors for understanding our financial performance. Our ability to maintain high occupancy rates is among the principal drivers of maintaining and increasing rental revenue. The following table sets forth percent leased and average net effective rent information regarding our in-service portfolio of rental properties at December 31, 2021 and 2020, respectively:

			Total Square Feet (in thousands)												Percent of Total Square Feet												Percent Leased*												Average Annual Net Effective Rent**
Type			2021						2020						2021						2020						2021						2020						2021						2020
Industrial			139,816						140,511						99.8		%				99.9		%				98.1		%				97.4		%				$5.77						$5.30
Non-reportable Rental Operations			211						211						0.2		%				0.1		%				93.8		%				96.8		%				$22.55						$22.31
Total Consolidated			140,027						140,722						100.0		%				100.0		%				98.1		%				97.4		%				$5.79						$5.32
Unconsolidated Joint Ventures			12,935						11,467																		98.0		%				98.7		%				$4.68						$4.32
Total Including Unconsolidated Joint Ventures			152,962						152,189																		98.1		%				97.5		%
* Represents the percentage of total square feet leased based on executed leases and without regard to whether the leases have commenced.
** Average annual net effective rent represents average annual base rental payments per leased square foot, on a straight-line basis for the term of each lease, from space leased to tenants at the end of the most recent reporting period. This amount excludes additional amounts paid by tenants as reimbursement for operating expenses.

The increase in occupancy at December 31, 2021 within our industrial portfolio, when compared to December 31, 2020, primarily resulted from leasing up recently delivered speculative developments while renewing or backfilling existing leases to maintain the occupancy level within our existing base of properties.

Vacancy Activity

The following table sets forth vacancy activity, shown in square feet, from our in-service rental properties for the year ended December 31, 2021 (in thousands):

			Consolidated Properties						Unconsolidated Joint Venture Properties						Total Including Unconsolidated Joint Venture Properties
Vacant square feet at December 31, 2020			3,716						150						3,866
Vacant space in completed developments			1,248						—						1,248
Expirations			6,041						667						6,708
Early lease terminations			197						87						284
Property structural changes/other			(360)						—						(360)
Leasing of previously vacant space			(8,216)						(647)						(8,863)
Vacant square feet at December 31, 2021			2,626						257						2,883

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Total Leasing Activity

Our ability to maintain and improve occupancy and net effective rents primarily depends upon our continuing ability to lease vacant space. The volume and quality of our leasing activity is closely scrutinized by management in operation of the business and provides useful information regarding future performance. The initial leasing of development projects or vacant space in acquired properties is referred to as first generation lease activity. The leasing of such space that we have previously held under lease to a tenant is referred to as second generation lease activity. Second generation lease activity may be in the form of renewals of existing leases or new leases of previously leased space. The total leasing activity for our consolidated and unconsolidated industrial rental properties, expressed in square feet of leases signed, is as follows for the years ended December 31, 2021 and 2020 (in thousands):

			2021						2020
New Leasing Activity - First Generation			7,058						7,917
New Leasing Activity - Second Generation			6,313						4,797
Renewal Leasing Activity			12,581						6,147
Early Renewal Leasing Activity *			2,841						2,671
Short-Term New Leasing Activity **			582						1,889
Short-Term Renewal Leasing Activity **			2,313						2,077
Non-Reportable Rental Operations Leasing Activity			1						36
Total Consolidated Leasing Activity			31,689						25,534
Unconsolidated Joint Venture Leasing Activity			1,823						3,154
Total Including Unconsolidated Joint Venture Leasing Activity			33,512						28,688
* Early renewals represent renewals executed more than two years in advance of a lease's originally scheduled end date.
** Short-term leases represent leases with a term of less than twelve months.

Second Generation Leases

The following table sets forth the estimated costs of tenant improvements and leasing costs, on a per square foot basis, that we are obligated to fulfill under the second generation industrial leases signed for our rental properties, during the years ended December 31, 2021 and 2020:

			Square Feet of Leases (in thousands)												Percent of Expiring Leases Renewed												Average Term in Years																		Estimated Tenant Improvement Cost per Square Foot												Leasing Commissions per Square Foot												Leasing Concessions per Square Foot
			2021						2020						2021						2020						2021						2020																		2021						2020						2021						2020						2021						2020
Consolidated - New Second Generation			6,313						4,797																		5.9						5.4																		$	2.07					$	1.79					$	2.59					$	2.87					$	0.11					$	0.05
Unconsolidated Joint Ventures - New Second Generation			577						527																		7.1						3.3																		$	3.78					$	1.56					$	2.87					$	1.12					$	0.03					$	—
Total - New Second Generation			6,890						5,324																		6.0						5.2																		$	2.21					$	1.92					$	2.61					$	2.73					$	0.10					$	0.04
Consolidated - Renewal			12,581						6,147						76.8		%				65.6		%				5.8						4.6																		$	0.81					$	0.99					$	1.54					$	1.50					$	0.20					$	0.03
Unconsolidated Joint Ventures - Renewal			326						1,142						34.9		%				86.8		%				7.4						4.7																		$	1.64					$	0.93					$	2.84					$	1.53					$	—					$	—
Total - Renewal			12,907						7,289						74.5		%				69.5		%				5.8						4.6																		$	0.84					$	0.98					$	1.58					$	1.50					$	0.20					$	0.03

Growth in average annual net effective rents for new second generation and renewal leases, on a combined basis, for our consolidated and unconsolidated industrial rental properties, is as follows for the years ended December 31:

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			2021						2020
Ownership Type
Consolidated properties			34.8		%				28.2		%
Unconsolidated joint venture properties			46.7		%				33.8		%

Lease Expirations

The table below reflects our consolidated in-service portfolio lease expiration schedule at December 31, 2021 (in thousands, except percentage data and number of leases):

			Total Consolidated Portfolio																		Industrial												Non-Reportable
Year of Expiration			Square Feet						Annual Rental Revenue*						Number of Leases						Square Feet						Annual Rental Revenue*						Square Feet						Annual Rental Revenue*
2022			9,063						$	40,799					99						9,046						$	40,607					17						$	192
2023			14,968						75,664						147						14,947						75,372						21						292
2024			14,536						78,307						154						14,529						78,225						7						82
2025			15,401						86,168						144						15,399						86,143						2						25
2026			17,193						90,196						142						17,181						90,047						12						149
2027			16,046						84,248						73						16,041						84,191						5						57
2028			11,068						74,015						53						10,949						70,528						119						3,487
2029			9,208						48,671						33						9,208						48,671						—						—
2030			7,411						47,832						34						7,411						47,832						—						—
2031			6,262						47,406						23						6,247						47,229						15						177
2032 and Thereafter			16,244						122,764						46						16,244						122,764						—						—
Total Leased			137,400						$	796,070					948						137,202						$	791,609					198						$	4,461
Total Portfolio Square Feet			140,027																		139,816												211
Percent Leased			98.1		%																98.1		%										93.8		%
* Annualized rental revenue represents average annual base rental payments, on a straight-line basis for the term of each lease, from space leased to tenants at the end of the most recent reporting period. Annualized rental revenue excludes additional amounts paid by tenants as reimbursement for operating expenses.

Property Acquisitions

Our decision process in determining whether or not to acquire a property or portfolio of properties involves several factors, including expected rent growth, multiple yield metrics, property locations and expected demographic growth in each location, current occupancy of the properties, tenant profile and remaining terms of the in-place leases in the properties. It is difficult to predict which markets may present acquisition opportunities that align with our strategy. Because of the numerous factors considered in our acquisition decisions, we do not establish specific target yields for future acquisitions.

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We acquired nine in-service buildings, including one property received through an asset distribution from an unconsolidated joint venture, and one container storage lot under long-term lease during the year ended December 31, 2021 and ten buildings during the year ended December 31, 2020. The following table summarizes the acquisition price, percent leased at time of acquisition and in-place yields of property acquisitions (in thousands, except percentage data):

			2021 Acquisitions																		2020 Acquisitions
Type			Fair Value of Acquired Assets*						In-Place Yield (Mark to Market)**						Percent Leased at Acquisition Date***						Fair Value of Acquired Assets*						In-Place Yield (Mark to Market)**						Percent Leased at Acquisition Date***
Industrial			$	609,241					4.4		%				100.0		%				$	424,941					3.5		%				80.6		%
* Includes fair value of real estate assets and acquired in-place lease intangible assets.
** In-place yields of completed acquisitions are calculated as the current annualized net rental payments from space leased to tenants at the date of acquisition, including the amortization of above or below market leases, less current annualized operating expenses not recovered through tenant reimbursements, divided by the fair value of the acquired real estate assets.
*** Represents percentage of total square feet leased based on executed leases and without regard to whether the leases have commenced, at the date of acquisition, including lease-backs with sellers executed in connection with the acquisition(s).

Building Dispositions

We dispose of properties on a basis that is generally consistent with our strategic plans. Our ability to dispose of properties, from time to time, on favorable terms is a key performance indicator from the perspective of management, as a source of capital to fund future investment. We believe that evaluating our disposition activity is also useful to investors.

We sold 30 consolidated properties including two trailer storage lots during the year ended December 31, 2021 and seven consolidated properties during the year ended December 31, 2020. The following table summarizes the sales prices, in-place yields and percent leased of industrial properties dispositions (in thousands, except percentage data):

			2021 Dispositions																		2020 Dispositions
Type			Sales Price						In-Place Yield*						Percent Leased**						Sales Price						In-Place Yield*						Percent Leased**
Industrial			$	1,069,120					4.6		%				100.0		%				$	321,800					3.8		%				77.5		%
* In-place yields of completed dispositions are calculated as annualized net operating income from space leased to tenants at the date of sale on a lease-up basis, including full rent from all executed leases, even if currently in a free rent period, divided by the sales price. Annualized net operating income is comprised of base rental payments, excluding reimbursement of operating expenses, less current annualized operating expenses not recovered through tenant reimbursements.
** Represents percentage of total square feet leased based on executed leases and without regard to whether the leases have commenced, at the date of sale.

Development

We expect to generate future earnings from Rental Operations as development properties are placed in service and leased. Development activities, and our ability to lease those developments, are viewed by management as key indicators of future earnings growth and provide useful information to investors for the same reasons.

We had 9.7 million square feet of properties under development with total estimated costs upon completion of $1.42 billion at December 31, 2021 compared to 7.4 million square feet with total estimated costs upon completion of $1.07 billion at December 31, 2020. The square footage includes both consolidated properties and unconsolidated joint venture development activity at 100% while estimated costs include consolidated properties and unconsolidated joint venture development activity at our 50% ownership share.

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The following table summarizes our properties under development at December 31, 2021 (in thousands, except percentage data and number of buildings): 

Ownership Type						Number of Buildings						Square Feet						Percent Leased						Total Estimated Project Costs						Total Incurred to Date						Amount Remaining to be Spent
Consolidated properties						29						8,538						47.3		%				$	1,378,289					$	693,116					$	685,173
Unconsolidated joint venture properties						2						1,157						50.3		%				41,911						15,967						25,944
Total						31						9,695						47.7		%				$	1,420,200					$	709,083					$	711,117

Results of Operations

A summary of our operating results and property statistics for each of the years in the three-year period ended December 31, 2021, is as follows (in thousands, except number of properties):

			2021						2020						2019
Rental and related revenue from continuing operations			$	1,025,663					$	929,194					$	855,833
General contractor and service fee revenue			80,260						64,004						117,926
Operating income			975,238						417,846						524,761
General Partner
Net income attributable to common shareholders			$	852,895					$	299,915					$	428,972
Partnership
Net income attributable to common unitholders			$	861,249					$	302,578					$	432,650
Number of in-service consolidated properties at end of year			477						480						459
In-service consolidated square footage at end of year			140,027						140,722						135,451
Number of in-service unconsolidated joint venture properties at end of year			40						40						38
In-service unconsolidated joint venture square footage at end of year			12,935						11,467						10,976

Comparison of Year Ended December 31, 2021 to Year Ended December 31, 2020

Rental and Related Revenue

The following table sets forth rental and related revenue from continuing operations (in thousands):

 

			2021						2020
Rental and related revenue:
Industrial			$	1,019,342					$	921,612
Non-reportable Rental Operations and non-segment revenues			6,321						7,582
Total rental and related revenue from continuing operations			$	1,025,663					$	929,194

The primary reasons for the increase in rental and related revenue from continuing operations were:

•We acquired 20 properties and placed 36 developments in service from January 1, 2020 to December 31, 2021, which provided incremental revenues from continuing operations of $94.2 million during the year ended December 31, 2021 as compared to the same period in 2020.

•Rental and related revenue from our "same-property" portfolio increased by $38.0 million during the twelve months ended December 31, 2021, as compared to the same period in 2020. These increased revenues were primarily driven by rental rate growth.

•The sale of 37 in-service properties since January 1, 2020, which did not meet the criteria to be classified within discontinued operations, resulted in a decrease of $36.1 million to rental and related revenue from continuing operations during the year ended December 31, 2021, as compared to the same period in 2020,

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which partially offset the aforementioned increases to rental and related revenue from continuing operations.

Rental Expenses and Real Estate Taxes

The following table sets forth rental expenses and real estate taxes from continuing operations (in thousands): 

			2021						2020
Rental expenses:
Industrial			$	85,297					$	75,345
Non-reportable Rental Operations and non-segment expenses			485						1,294
Total rental expenses from continuing operations			$	85,782					$	76,639
Real estate taxes:
Industrial			$	159,171					$	148,252
Non-reportable Rental Operations and non-segment expenses			409						1,043
Total real estate tax expense from continuing operations			$	159,580					$	149,295

Overall, rental expenses from continuing operations increased by $9.1 million in 2021 compared to 2020. The increase to rental expenses was primarily due to higher snow removal costs compared to the same period in 2020.

Overall, real estate tax expense from continuing operations increased by $10.3 million in 2021 compared to 2020. The increase to real estate tax expenses was mainly due to higher real estate tax assessments in certain of our markets and the result of acquisitions and developments placed in service from January 1, 2020 to December 31, 2021, which have generally been concentrated in markets with higher tax rates and/or assessed values. These increases were partially offset by the impact of property sales that did not meet the criteria to be classified within discontinued operations.

Service Operations

The following table sets forth the components of net earnings from the Service Operations reportable segment for the years ended December 31, 2021 and 2020, respectively (in thousands): 

			2021						2020
Service Operations:
General contractor and service fee revenue			$	80,260					$	64,004
General contractor and other services expenses			(68,118)						(57,976)
Net earnings from Service Operations			$	12,142					$	6,028

Service Operations primarily consist of the development, construction management and general contractor services, leasing, property management and asset management for unconsolidated joint venture properties and properties owned by third parties. Service Operations are heavily influenced by the current state of the economy, as construction and development services rely on the expansion of business operations of third-party property owners and joint venture partners, while leasing and property management fees are dependent upon occupancy.

Net earnings from service operations increased as the result of higher fee-based third party construction activity during 2021 compared to 2020.

Depreciation and Amortization

Depreciation and amortization expense from continuing operations was $362.1 million and $353.0 million for the years ended December 31, 2021 and 2020, respectively. The increase in depreciation and amortization expense for the year ended December 31, 2021 was primarily the result of continued growth in our portfolio through development and acquisitions placed in service from January 1, 2020 to December 31, 2021, partially offset by the impact of property sales that did not meet the criteria to be classified within discontinued operations.

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Equity in Earnings of Unconsolidated Joint Ventures

Equity in earnings of unconsolidated joint ventures represents our ownership share of net income from investments in unconsolidated joint ventures that generally own and operate rental properties. Equity in earnings of unconsolidated joint ventures was $32.8 million and $11.9 million for the years ended December 31, 2021 and 2020, respectively. In 2021, we recognized $10.6 million of equity in earnings of unconsolidated joint ventures related to gains on the distribution of joint venture assets to our partner in two unconsolidated joint ventures made in connection with a plan of dissolution (see Note 5 to the consolidated financial statements). We also recognized $10.0 million of equity in earnings related to our share of gains on the sale of properties to unrelated parties by unconsolidated joint ventures during 2021.

There were no property sales by unconsolidated joint ventures during 2020.

Gain on Sale of Properties - Continuing Operations

We sold 30 properties during 2021 that were classified in continuing operations, recognizing total gains on sale of $585.7 million. These properties did not meet the criteria for inclusion in discontinued operations.

We sold seven properties during 2020 that were classified in continuing operations, recognizing total gains on sale of $127.7 million. These properties did not meet the criteria for inclusion in discontinued operations.

Gain on Sale of Land

Gains on sale of land totaled $12.9 million and $10.5 million for the years ended December 31, 2021 and 2020, respectively. We sold 283 acres of undeveloped land in 2021 compared to 157 acres of undeveloped land in 2020.

Impairment Charges

We did not recognize any impairment charges in 2021.

We recognized $5.6 million of impairment charges during the first quarter of 2020, related to writing off pre-acquisition costs, primarily non-refundable purchase deposits, for certain planned purchases of undeveloped land that we elected not to pursue due to the uncertain economic outlook at the onset of the COVID-19 pandemic.

General and Administrative Expenses

General and administrative expenses consist of two components. The first component includes general corporate expenses, and the second component represents the indirect operating costs not allocated to, or absorbed by, either the development, leasing and operation of our consolidated properties or our Service Operations. Such indirect operating costs are primarily comprised of employee compensation, including related costs such as benefits and wage-related taxes, but also include other ancillary costs such as travel and information technology support. Total indirect operating costs, prior to any allocation or absorption, and general corporate expenses are collectively referred to as our overall pool of overhead costs.

Those indirect costs not allocated to or absorbed by these operations are charged to general and administrative expenses. We regularly review our total overhead cost structure relative to our leasing, development and construction volume and adjust the level of total overhead, generally through changes in our level of staffing in various functional departments, as necessary, in order to control overall general and administrative expenses.

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General and administrative expenses were $69.6 million and $62.4 million for the years ended December 31, 2021 and 2020, respectively. The following table sets forth the factors that led to the increase in general and administrative expenses from 2020 to 2021 (in millions):

General and administrative expenses - 2020			$	62.4
Increase to overall pool of overhead costs			12.4
Decrease in overhead restructuring charges (1)			(1.0)
Impact of increased allocation of costs to leasing and development activities (2)			(2.3)
Increased allocation of costs to Service Operations and Rental Operations (3)			(1.9)
General and administrative expenses - 2021			$	69.6

(1) We recognized approximately $3.5 million of overhead restructuring costs, primarily related to reorganizing our construction business during the year ended December 31, 2021, compared to $4.5 million of overhead restructuring charges during the year ended December 31, 2020.

(2) We capitalized $7.9 million and $28.6 million of our total overhead costs to leasing and development, respectively, for consolidated properties during 2021, compared to capitalizing $6.5 million and $28.8 million of such costs, respectively, for 2020. Non-capitalizable leasing costs were $13.3 million and $12.3 million for the years ended December 31, 2021 and 2020 (these costs are presented separately in the line item "Non-Incremental Costs Related to Successful Leases" on the Consolidated Statements of Operations). Combined overhead costs capitalized to leasing and development totaled 25.2% and 26.7% of our overall pool of overhead costs for 2021 and 2020, respectively.

(3) The increase in allocation of costs to Service Operations and Rental Operations resulted from a higher volume of third-party construction projects during 2021.

Interest Expense

Interest expense from continuing operations was $84.8 million and $93.4 million for the years ended December 31, 2021 and 2020, respectively. The decrease in interest expense from continuing operations for the year ended December 31, 2021 was primarily due to lower average interest rates resulting from refinancing unsecured notes and higher capitalization of interest expense, partially offset by increased overall borrowings.

We capitalized $35.0 million and $24.3 million of interest costs during 2021 and 2020, respectively.

Debt Extinguishment

In January 2021, the Partnership assumed and immediately repaid $40.2 million of unsecured debt related to the dissolution of two unconsolidated joint ventures (see Note 5 to the consolidated financial statements).

In June 2021, the Partnership redeemed $83.7 million of its remaining 3.88% unsecured notes due October 2022. A loss of $3.9 million was recognized in connection with the redemption of these notes including the prepayment premium and write-off of the unamortized deferred financing costs.

In August 2021, the Partnership redeemed $250.0 million of its unsecured notes due April 2023, which had a stated interest rate of 3.63%. A loss of $13.9 million was recognized in connection with the redemption of these notes including the prepayment premium and write-off of the unamortized deferred financing costs.

During 2020, the Partnership redeemed $300.0 million of unsecured notes with a stated interest rate of 4.38% and repurchased and canceled $216.3 million of unsecured notes with a stated interest rate of 3.88% pursuant to a tender offer completed by the Partnership. In connection with the redemption and repurchase of these unsecured notes, we recognized a total loss of $32.9 million including the redemption/repayment premium and write-off of the unamortized deferred financing costs.

Critical Accounting Estimates

The preparation of our consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. Certain estimates, judgments and assumptions are inherently subjective and based on the existing

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business and market conditions, and are therefore continually evaluated based upon available information and experience. Based on the nature of our business, current economic conditions and the value of our real estate assets, we have concluded that our financial statements for all periods presented have not been materially impacted by individual accounts or classes of transaction that rely on estimates. Further, we have concluded that our financial statements for all periods presented are not materially impacted by estimates of fair value that rely upon non-observable inputs.

We have determined that judgments regarding the impairment of real estate assets represent a critical accounting estimate that has the potential to be material in future periods and has been material in certain periods prior to those presented in this Form 10-K. As the result of the strong demand, and generally appreciating values, for industrial real estate assets, we have not recognized any material impairment charges in any of the periods presented in our consolidated financial statements. As described below in our description of Critical Accounting Policies, determining whether a triggering event has taken place requires an evaluation of assumptions including occupancy levels, rental rates, capitalization rates and anticipated holding periods when evaluating real estate assets for potential impairment. We do not believe that the conclusions we reached regarding the assessment of our real estate assets for impairment, in the current economic and operating environment, would result in a materially different conclusion within any reasonable range of assumptions that could have been applied. Should economic conditions worsen, and the values of industrial assets decline in future periods, then the assumptions and estimates we may make in future impairment analyses, and potential future measurement of impairment charges, could be sensitive and could result in a material change in the range of potential outcomes.

Critical Accounting Policies

Note 2 to the Consolidated Financial Statements includes further discussion of our significant accounting policies. Our management has assessed the accounting policies used in the preparation of our financial statements and discussed them with our audit committee and independent auditors. The following accounting policies are considered critical based upon materiality to the financial statements, and to a lesser extent, the degree of judgment involved in estimating reported amounts and sensitivity to changes in industry and economic conditions:

Impairment of Real Estate Assets: We evaluate our real estate assets, with the exception of those that are classified as held-for-sale, for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. If such an evaluation is considered necessary, we compare the carrying amount of that real estate asset, or asset group, with the expected undiscounted cash flows that are directly associated with, and that are expected to arise as a direct result of, the use and eventual disposition of that asset, or asset group. Our estimate of the expected future cash flows used in testing for impairment is based on, among other things, our estimates regarding future market conditions, rental rates, occupancy levels, costs of tenant improvements, leasing commissions and other tenant concessions, assumptions regarding the residual value of our properties at the end of our anticipated holding period and the length of our anticipated holding period and is, therefore, subjective by nature. These assumptions could differ materially from actual results. If our strategy changes or if market conditions otherwise dictate a reduction in the holding period and an earlier sale date, an impairment loss could be recognized and such loss could be material. To the extent the carrying amount of a real estate asset, or asset group, exceeds the associated estimate of undiscounted cash flows, an impairment loss is recorded to reduce the carrying value of the asset to its fair value.

The determination of the fair value of real estate assets is also highly subjective, especially in markets where there is a lack of recent comparable transactions. We primarily utilize the income approach to estimate the fair value of our income producing real estate assets. To the extent that the assumptions used in testing long-lived assets for impairment differ from those of a marketplace participant, the assumptions are modified in order to estimate the fair value of a real estate asset when an impairment charge is measured. In addition to determining future cash flows, which make the estimation of a real estate asset's undiscounted cash flows highly subjective, the selection of the discount rate and exit capitalization rate used in applying the income approach is also highly subjective.

To the extent applicable marketplace data is available, we generally use the market approach in estimating the fair value of undeveloped land that is determined to be impaired.

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Real estate assets that are classified as held-for-sale are reported at the lower of their carrying value or their fair value, less estimated costs to sell.

Acquisition of Real Estate Property and Related Assets: We generally account for real estate acquisitions as asset acquisitions as opposed to business combinations. We allocate the purchase price of acquired properties to tangible and identified intangible assets based on their relative fair values, using all pertinent information available at the date of acquisition. The allocation of the purchase price to tangible assets (buildings, tenant improvements and land) is based upon management's determination of the value of the property as if it were vacant. This “as-if vacant” value is estimated using an income, or discounted cash flow, approach that relies upon internally determined assumptions that we believe are consistent with current market conditions for similar properties. The most important assumptions in determining the allocation of the purchase price to tangible assets are the exit capitalization rate, estimated market rents and the fair value of the underlying land.

The purchase price of real estate assets is also allocated to intangible assets consisting of the above or below market component of in-place leases and the value of in-place leases. The value allocable to the above or below market component of an acquired in-place lease is determined based upon the present value (using a discount rate which reflects the risks associated with the acquired leases) of the difference between (i) the contractual amounts to be received pursuant to the lease over its remaining term and (ii) management's estimate of the amounts that would be received using fair market rates over the remaining term of the lease. The amounts allocated to above market leases are included in deferred leasing and other costs in the balance sheet and below market leases are included in other liabilities in the balance sheet; both are amortized to rental income over the remaining terms of the respective leases. Factors considered in determining the value allocable to in-place leases include estimates, during hypothetical lease up periods, related to space that is actually leased at the time of acquisition. These estimates include (i) lost rent at market rates, (ii) fixed operating costs that will be recovered from tenants and (iii) theoretical leasing commissions required to execute similar leases. These intangible assets are included in deferred leasing and other costs in the balance sheet and are amortized over the remaining term of the existing lease.

The audit committee has reviewed the critical accounting policies identified by management.

Liquidity and Capital Resources

Overview

We expect to meet our short-term liquidity requirements over the next 12 months, which include payments of dividends and distributions, completion of development projects that are currently under construction and capital expenditures needed to maintain our current real estate assets, through working capital, net cash provided by operating activities and short term borrowings on the Partnership's unsecured line of credit. We had no outstanding borrowings on the Partnership's $1.20 billion unsecured line of credit and had $69.8 million of cash on hand at December 31, 2021.

In addition to our existing sources of liquidity, we expect to meet long-term liquidity requirements, such as scheduled mortgage and unsecured debt maturities, financing of development activities, acquisitions and other capital improvements, through multiple sources of capital including operating cash flow, proceeds from property dispositions and accessing the public debt and equity markets.

Sources of Liquidity

Rental Operations

Cash flows from Rental Operations is our primary source of liquidity and provides a stable source of cash flow to fund operational expenses. We believe that this cash-based revenue stream is substantially aligned with revenue recognition (except for items such as periodic straight-line rental income accruals and amortization of above or below market rents) as cash receipts from the leasing of rental properties are generally received in advance of, or a short time following, the actual revenue recognition.

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We are subject to a number of risks related to general economic conditions, including reduced occupancy, tenant defaults and bankruptcies and potential reduction in rental rates upon renewal or re-letting of properties, any of which would result in reduced cash flow from operations.

Debt and Equity Securities

Our unsecured line of credit at December 31, 2021 is described as follows (in thousands): 

Description			Borrowing Capacity						Maturity Date						Outstanding Balance at December 31, 2021
Unsecured Line of Credit – Partnership			$	1,200,000					March 31, 2025						$	—

In March 2021, the Partnership amended and restated its existing $1.20 billion unsecured line of credit, which was set to mature in January 2022 with two six-month extension options. The amended and restated unsecured line of credit bears interest at one-month LIBOR plus 0.775% with a reduction in borrowing costs if certain sustainability linked metrics are achieved each year. The amended and restated line of credit matures on March 31, 2025 with two six-month extension options to extend until March 31, 2026. Subject to certain conditions, the terms also include an option to increase the facility by up to an additional $800.0 million, for a total of up to $2.00 billion. This line of credit provides us with an option to obtain borrowings from financial institutions that participate in the line at rates that may be lower than the stated interest rate, subject to certain restrictions.

This line of credit contains financial covenants that require us to meet certain financial ratios and defined levels of performance, including those related to fixed charge coverage, unsecured interest expense coverage and debt-to-asset value (with asset value being defined in the Partnership's unsecured line of credit agreement). At December 31, 2021, we were in compliance with all covenants under this line of credit.

In 2017, the Alternative Reference Rates Committee proposed that the Secured Overnight Funding Rate replace LIBOR. In March 2021, the administrator of LIBOR announced that the publication of LIBOR will cease for one-week and two-month USD LIBOR settings immediately after December 31, 2021, and the remaining USD LIBOR settings immediately after June 30, 2023. As the Partnership's unsecured line of credit agreement has provisions that allow for automatic transition to a new rate, and the Partnership has no other material debt arrangements that are indexed to LIBOR, we believe that the transition will not have a material impact on our consolidated financial statements.

At December 31, 2021, we had on file with the SEC an automatic shelf registration statement on Form S-3 relating to the offer and sale, from time to time, of an indeterminate amount of debt and equity securities (including guarantees of the Partnership's debt securities by the General Partner). Equity securities are offered and sold by the General Partner, and the net proceeds of such offerings are contributed to the Partnership in exchange for additional General Partner Units or Preferred Units. From time to time, we expect to issue additional securities under this automatic shelf registration statement to fund the repayment of debt, development and future acquisitions and for other general corporate purposes.

In February 2021, the General Partner terminated its previous equity distribution agreement for its previous ATM equity program and entered into a new equity distribution agreement pursuant to which the General Partner may sell from time to time up to an aggregate offering price of $400.0 million of its common stock through sales agents or forward sellers. During the three months ended December 31, 2021, the General Partner issued 1.7 million common shares pursuant to its new ATM equity program, resulting in net proceeds of $94.6 million after paying total compensation of $955,000 to the applicable sales agents. During the year ended December 31, 2021, the General Partner issued 8.0 million common shares under its new ATM equity program, generating net proceeds of $396.0 million after paying total compensation of $4.0 million to the applicable sales agents. In addition, during the year ended December 31, 2021, the General Partner issued 210,000 common shares under its predecessor ATM equity program, resulting in net proceeds of $8.3 million after paying total compensation of $84,000 to the applicable sales agents. These issuances under both ATM programs resulted in net proceeds of $403.6 million during 2021, after deducting the commissions and other fees paid, totaling $626,000. As of December 31, 2021, substantially all of the ATM equity program has been utilized.

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In January 2021, the Partnership issued $450.0 million of senior unsecured notes, which bear interest at a stated interest rate of 1.75%, have an effective interest rate of 1.83%, and mature on February 1, 2031, for cash proceeds of $446.6 million.

In November 2021, the Partnership issued $500.0 million of senior unsecured notes, which bear interest at a stated interest rate of 2.25%, have an effective interest rate of 2.38%, and mature on January 15, 2032, for cash proceeds of $494.1 million.

The Partnership has issued debt securities pursuant to certain indentures and related supplemental indentures, which also require us to comply with financial ratios and other covenants regarding our operations. We were in compliance with all such covenants at December 31, 2021.

Sale of Real Estate Assets

We dispose of certain properties in a manner consistent with our strategic plans. Our ability to dispose of such properties on favorable terms is dependent upon a number of factors including the availability of credit to potential buyers to purchase properties at prices that we consider acceptable. Although we believe that we have demonstrated our ability to generate significant liquidity through property dispositions, potential future adverse changes to market and economic conditions could negatively impact our further ability to dispose of properties that no longer meet our long-term objectives.

Sales of buildings and land provided $1.07 billion in net proceeds in 2021, compared to $336.3 million in 2020 and $432.7 million in 2019.

Transactions with Unconsolidated Joint Ventures

Transactions with unconsolidated joint ventures also provide a source of liquidity. From time to time we will sell properties to unconsolidated joint ventures, while retaining a continuing interest in that entity, and receive proceeds commensurate to those interests that we do not own. Additionally, unconsolidated joint ventures will from time to time obtain debt financing or sell properties and will then distribute to us, and our joint venture partners, all or a portion of the proceeds from such transactions. During 2021, our share of sale and capital distributions from unconsolidated joint ventures totaled $61.6 million. As part of closings of the contribution of properties to the recently formed 20% owned unconsolidated joint venture, we received $41.1 million for our ownership share of proceeds from third party mortgage loans originated by this joint venture during 2021.

Uses of Liquidity

Our principal uses of liquidity include the following:

 

•property investment;

•leasing/capital costs;

•dividends and distributions to shareholders and unitholders;

•debt service and maturities;

•opportunistic repurchases of outstanding debt; and

•other contractual obligations.

Property Investment

Our overall strategy is to continue to increase our investment in quality industrial properties, primarily through development, on both a speculative and build-to-suit basis, supplemented with acquisitions in Coastal Tier 1 markets. Pursuant to this strategy, we evaluate development and acquisition opportunities based upon our market outlook, including general economic conditions, supply and long-term growth potential. Our ability to make future property investments is dependent upon identifying suitable acquisition and development opportunities, and our continued access to our longer-term sources of liquidity, including issuances of debt or equity securities as well as generating cash flow by disposing of selected properties.

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Leasing/Capital Costs

Tenant improvements and lease-related costs pertaining to our initial leasing of newly completed space, or vacant space in acquired properties, are referred to as first generation expenditures. Such first generation expenditures for tenant improvements are included within "development of real estate investments" in our Consolidated Statements of Cash Flows, while such expenditures for capitalizable lease-related costs are included within "other deferred leasing costs."

Cash expenditures related to the construction of a building's shell, as well as the associated site improvements, are also included within "development of real estate investments" in our Consolidated Statements of Cash Flows.

Tenant improvements and leasing costs to renew or re-let rental space that we previously leased to tenants for second generation leases are referred to as second generation expenditures. Building improvements that are not specific to any tenant, but serve to improve integral components of our real estate properties, are also second generation expenditures. One of the principal uses of our liquidity is to fund the second generation leasing/capital expenditures of our real estate investments.

The following table summarizes our second generation capital expenditures by type of expenditure, as well as capital expenditures for the development of real estate investments and for other deferred leasing costs (in thousands):

			2021						2020						2019
Second generation tenant improvements			$	23,270					$	17,126					$	12,165
Second generation leasing costs			36,691						23,808						28,467
Building improvements			8,484						4,103						12,505
Total second generation capital expenditures			$	68,445					$	45,037					$	53,137
Development of real estate investments			$	661,416					$	573,544					$	446,801
Other deferred leasing costs			$	42,214					$	41,607					$	32,921

We had consolidated properties under development with an expected total cost of $1.38 billion at December 31, 2021, compared to projects with an expected cost of $1.04 billion and $1.05 billion at December 31, 2020 and 2019, respectively. We had $685.2 million of remaining costs to complete for consolidated properties under development at December 31, 2021.

The capital expenditures in the table above include the capitalization of internal overhead costs. We capitalized $7.9 million, $6.5 million and $6.8 million of overhead costs that are incremental to executing leases, including both first and second generation leases, during the years ended December 31, 2021, 2020 and 2019, respectively. We capitalized $28.6 million, $28.8 million and $24.2 million of overhead costs related to development activities, including both development and tenant improvement projects on first and second generation space, during the years ended December 31, 2021, 2020 and 2019, respectively. Combined overhead costs capitalized to leasing and development totaled 25.2%, 26.7% and 22.8% of our overall pool of overhead costs at December 31, 2021, 2020 and 2019, respectively.

Further discussion of the capitalization of overhead costs can be found herein, in the year-to-year comparison of general and administrative expenses of this Item 7.

In addition to the capitalization of overhead costs, the totals for development of real estate assets in the table above include the capitalization of $35.0 million, $24.3 million and $26.5 million of interest costs during the years ended December 31, 2021, 2020 and 2019, respectively.

Both our first and second generation expenditures vary significantly between leases on a per square foot basis, dependent upon several factors including the nature of a tenant's operations, the specific physical characteristics of each individual property and the market in which the property is located.

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Dividend and Distribution Requirements

The General Partner is required to meet the distribution requirements of the Code in order to maintain its REIT status. We paid regular dividends or distributions of $1.045, $0.96 and $0.88 per common share or Common Unit for the years ended December 31, 2021, 2020 and 2019, respectively.

We expect to continue to distribute at least an amount equal to our taxable earnings, to meet the requirements to maintain the General Partner's REIT status, and additional amounts as determined by the General Partner's board of directors. Distributions are declared at the discretion of the General Partner's board of directors and are subject to actual cash available for distribution, our financial condition, capital requirements and such other factors as the General Partner's board of directors deems relevant.

Debt Service and Maturities

Debt outstanding at December 31, 2021 had a face value totaling $3.73 billion with a weighted average interest rate of 3.02% and maturities at various dates through 2050. Of this total amount, we had $3.68 billion of unsecured debt, $56.2 million of secured debt and no outstanding borrowings on our unsecured line of credit at December 31, 2021. Scheduled principal amortization, maturities and repayments of unsecured debt, outstanding line of credit balances and assumed joint venture debt totaled $673.4 million for the year ended December 31, 2021.

The following table is a summary of the scheduled future amortization and maturities of our indebtedness at December 31, 2021 (in thousands, except percentage data): 

			Future Repayments
Year			Scheduled Amortization						Maturities						Total						Weighted Average Interest Rate of Future Repayments
2022			$	4,646					$	—					$	4,646					5.19%
2023			4,893						—						4,893						5.22%
2024			5,155						300,000						305,155						3.92%
2025			5,102						—						5,102						5.09%
2026			3,238						375,000						378,238						3.38%
2027			1,615						475,000						476,615						3.18%
2028			1,307						500,000						501,307						4.45%
2029			1,359						400,000						401,359						2.88%
2030			1,413						350,000						351,413						1.86%
2031			1,469						450,000						451,469						1.84%
Thereafter			3,261						847,734						850,995						2.74%
			$	33,458					$	3,697,734					$	3,731,192					3.02%

We anticipate generating capital to fund our debt maturities by using undistributed cash generated from our Rental Operations and property dispositions and by raising additional capital from future debt or equity transactions.

On January 14, 2022, we provided notice of redemption to the holders of our $300.0 million of 3.75% unsecured notes, which are scheduled to mature in December 2024. This redemption will be funded with the proceeds of the contribution of third tranche of assets to a 20% owned joint venture which closed in January 2022.

Repayments of Outstanding Debt

To the extent that it supports our overall capital strategy, we may purchase or redeem some of our outstanding unsecured notes prior to their stated maturities.

In January 2021, the Partnership assumed, and immediately repaid $40.2 million of unsecured debt associated with the properties received as a result of the dissolution of two unconsolidated joint ventures.

In June 2021, we redeemed $83.7 million of unsecured notes that were scheduled to mature in October 2022.

In August 2021, we redeemed $250.0 million of unsecured notes that were scheduled to mature in April 2023.

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Lease Commitments

As of December 31, 2021, we have total future payment obligations of $223.5 million on our ground leases and $25.5 million on our office leases and other lease arrangements, over their non-cancellable lease periods including applicable lease extension and renewal options when deemed reasonably certain of exercise. No payments on these leases are material in any individual year.

Guarantee Obligations

We are subject to various guarantee obligations in the normal course of business and, in most cases, do not anticipate these obligations to result in significant cash payments. At December 31, 2021, we guaranteed the repayment of a $4.8 million loan associated with one of our unconsolidated joint ventures.

Additionally, as of December 31, 2021, we guaranteed the repayment of $18.5 million of economic development bonds issued by various municipalities in connection with certain commercial developments.

Historical Cash Flows

Cash, cash equivalents and restricted cash were $103.2 million, $67.2 million and $121.4 million at December 31, 2021, 2020, and 2019, respectively. The following table highlights significant changes in net cash associated with our operating, investing and financing activities (in millions): 

			Years Ended December 31,
			2021						2020						2019
Net cash provided by operating activities			$	642.4					$	566.4					$	505.9
Net cash used for investing activities			$	(832.4)					$	(856.2)					$	(555.1)
Net cash provided by financing activities			$	225.9					$	235.6					$	145.1

Operating Activities

Cash flows from operating activities provide the cash necessary to meet our operational requirements and the receipt of rental income from Rental Operations continues to be our primary source of operating cash flows. The increase in net cash provided by operating activities, from 2019 to 2020 and from 2020 to 2021, was driven by increasing occupancy and rental rates within our existing portfolio and increasing our asset base through acquisitions and development, financed through equity or low cost debt issuances.

Investing Activities

Highlights of significant cash sources and uses are as follows (in millions):

			Years Ended December 31,
			2021						2020						2019
Development of real estate investments			$	(661.4)					$	(573.5)					$	(446.8)
Acquisition of buildings, land and other real estate assets			(1,148.2)						(632.1)						(598.4)
Proceeds from sale of land and properties, net			1,068.0						336.3						432.7
Second generation tenant improvements, leasing costs and building improvements			(68.4)						(45.0)						(53.1)
Issuance of mortgage loan			(31.7)						—						—
Purchase deposit for assets to be contributed to an unconsolidated joint venture			13.4						—						—
Proceeds from the repayments of notes receivable from property sales			—						110.0						162.6
Capital distributions from unconsolidated joint ventures			61.6						0.9						26.3
Capital contributions and advances to unconsolidated joint ventures			(22.6)						(6.2)						(34.5)

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Financing Activities

Highlights of cash inflows and outflows from equity transactions are as follows (in millions):

			Years Ended December 31,
			2021						2020						2019
Proceeds from issuances of common shares under ATM equity programs			$	403.6					$	175.0					$	263.3
Distributions to common shareholders			(394.5)						(355.3)						(318.7)
Distributions to limited partners			(3.9)						(3.2)						(2.8)

Highlights of cash inflows and outflows from debt transactions are as follows (in millions):

			Years Ended December 31,
			2021						2020						2019
Proceeds from the issuance of debt
Secured debt			$	—					$	18.4					$	—
Senior unsecured debt			940.7						663.1						582.3
			$	940.7					$	681.5					$	582.3
Repurchase of and repayments on debt (including extinguishment costs)
Secured debt			$	—					$	(9.0)					$	(41.7)
Senior unsecured debt			(390.9)						(547.0)						(255.8)
			$	(390.9)					$	(556.0)					$	(297.5)
(Repayments) borrowings on line of credit, net
Unsecured line of credit			$	(295.0)					$	295.0					$	(30.0)

Impact of Changes in Credit Ratings on Our Liquidity

We are currently assigned investment grade corporate credit ratings on our senior unsecured notes from Moody's Investors Service and Standard & Poor's Ratings Group. Our senior unsecured notes have been assigned a rating of Baa1 by Moody's Investors Service. In addition, our senior unsecured notes have been assigned a rating of BBB+ by Standard & Poor's Ratings Group. A securities rating is not a recommendation to buy, sell, or hold securities and is subject to revision or withdrawal at any time by the rating organization.

The ratings of our senior unsecured notes could change based upon, among other things, the impact that prevailing economic conditions may have on our results of operations and financial condition. If our credit ratings are downgraded or other negative action is taken, we could be required, among other things, to pay additional interest and fees on outstanding borrowings under our revolving credit agreement. Credit rating reductions by one or more rating agencies could also adversely affect our access to funding sources, the cost and other terms of obtaining funding, as well as our overall financial condition, operating results and cash flow.

Financial Instruments

We are exposed to capital market risk, such as changes in interest rates. In order to reduce the volatility relating to interest rate risk, we may enter into interest rate hedging arrangements from time to time. We do not utilize derivative financial instruments for trading or speculative purposes.

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Item 7A.  Quantitative and Qualitative Disclosures About Market Risk

We are exposed to market risks, including interest rates, in the ordinary course of business.

Interest Rate Risk

We are exposed to interest rate changes primarily as a result of our line of credit and long-term borrowings. Our interest rate risk management objective is to limit the impact of interest rate changes on earnings and cash flows and to lower overall borrowing costs. To achieve our objectives, we borrow primarily at fixed rates and may enter into derivative financial instruments such as interest rate swaps in order to mitigate our interest rate risk on a related financial instrument. We do not enter into derivative or interest rate transactions for speculative purposes.

Our interest rate risk is monitored using a variety of techniques. The table below presents the principal amounts (in thousands) of the expected annual maturities, weighted average interest rates for the average debt outstanding in the specified period and fair values (in thousands).

			2022						2023						2024						2025						2026						Thereafter						Total						Fair Value
Long-Term Debt:
Fixed rate secured debt			$	4,346					$	4,593					$	4,855					$	4,702					$	3,238					$	33,158					$	54,892					$	59,989
Weighted average interest rate			5.54		%				5.55		%				5.56		%				5.51		%				5.27		%				4.08		%				4.64		%
Variable rate secured debt			$	300					$	300					$	300					$	400					$	—					$	—					$	1,300					$	1,300
Weighted average interest rate			0.12		%				0.12		%				0.12		%				0.12		%				N/A						N/A						0.12		%
Fixed rate unsecured debt			$	—					$	—					$	300,000					$	—					$	375,000					$	3,000,000					$	3,675,000					$	3,779,465
Weighted average interest rate			N/A						N/A						3.90		%				N/A						3.36		%				2.86		%				3.00		%

On January 14, 2022, we provided notice of redemption to the holders of our $300.0 million of 3.75% unsecured notes, which are scheduled to mature in December 2024.

As the above table incorporates only those exposures that existed at December 31, 2021, it does not consider those exposures or positions that could arise after that date. As a result, the ultimate impact of interest rate fluctuations will depend on future exposures that arise, our hedging strategies at that time, to the extent we are party to interest rate derivatives, and interest rates. Interest expense on our unsecured line of credit, to the extent there are outstanding borrowings, will be affected by fluctuations in the one-month LIBOR indices or applicable replacement rates, changes in our credit rating as well as certain sustainability linked metrics achieved each year. The interest rate at such point in the future as we may renew, extend or replace our unsecured line of credit will be heavily dependent upon the state of the credit environment.

At December 31, 2021, the face value of our unsecured debt was $3.68 billion and we estimated the fair value of that unsecured debt to be $3.78 billion.  At December 31, 2020, the face value of our unsecured debt was $3.06 billion and we estimated the fair value of that unsecured debt to be $3.39 billion. 

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Item 8.  Financial Statements and Supplementary Data

The financial statements and supplementary data are included under Item 15 of this Report and are incorporated herein by reference.

Item 9.  Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

There was no change or disagreement with our accountants related to our accounting and financial disclosures.

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Item 9A.  Controls and Procedures

Controls and Procedures (General Partner)

We conducted an evaluation of the effectiveness of the design and operation of our "disclosure controls and procedures" as of the end of the period covered by this Report. The controls evaluation was done under the supervision and with the participation of management, including the Chief Executive Officer and the Chief Financial Officer.

Attached as exhibits to this Report are certifications of our Chief Executive Officer and Chief Financial Officer, which are required in accordance with Rule 13a-14 of the Securities Exchange Act of 1934. This Controls and Procedures section includes the information concerning the controls evaluation referred to in the certifications and it should be read in conjunction with the certifications for a more complete understanding of the topics presented.

Disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the "Exchange Act")) are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed under the Exchange Act, such as this Report, is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures are also designed to ensure that such information is accumulated and communicated to our management, including our principal executive and principal financial officers, as appropriate, to allow timely decisions regarding required disclosure.

Based on the disclosure controls and procedures evaluation referenced above, our Chief Executive Officer and Chief Financial Officer have concluded that as of the end of the period covered by this Report, our disclosure controls and procedures were effective.

Management's annual report on internal control over financial reporting and the audit report of our independent registered public accounting firm are included in Item 15 of Part IV under the headings "Management's Report on Internal Control" and "Report of Independent Registered Public Accounting Firm," respectively, and are incorporated herein by reference.

There were no changes in our internal control over financial reporting during the quarter ended December 31, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Controls and Procedures (Partnership)

We conducted an evaluation of the effectiveness of the design and operation of our "disclosure controls and procedures" as of the end of the period covered by this Report. The controls evaluation was done under the supervision and with the participation of management, including the General Partner's Chief Executive Officer and Chief Financial Officer.

Attached as exhibits to this Report are certifications of the General Partner's Chief Executive Officer and Chief Financial Officer, which are required in accordance with Rule 13a-14 of the Securities Exchange Act of 1934. This Controls and Procedures section includes the information concerning the controls evaluation referred to in the certifications and it should be read in conjunction with the certifications for a more complete understanding of the topics presented.

Disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed under the Exchange Act, such as this Report, is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures are also designed to ensure that such information is accumulated and communicated to management, including the General Partner's principal executive and principal financial officers, as appropriate, to allow timely decisions regarding required disclosure.

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Based on the disclosure controls and procedures evaluation referenced above, the General Partner's Chief Executive Officer and Chief Financial Officer have concluded that as of the end of the period covered by this Report, our disclosure controls and procedures were effective.

Management's annual report on internal control over financial reporting and the audit report of our independent registered public accounting firm are included in Item 15 of Part IV under the headings "Management's Report on Internal Control" and "Report of Independent Registered Public Accounting Firm," respectively, and are incorporated herein by reference.

There were no changes in our internal control over financial reporting during the quarter ended December 31, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B.  Other Information

There was no information required to be disclosed in a report on Form 8-K during the fourth quarter of 2021 for which no Form 8-K was filed.

Our discussion of federal income tax considerations in Exhibit 99.1 attached hereto, which is incorporated herein by reference, supersedes and replaces, in its entirety, (i) the disclosure under the heading “Federal Income Tax Considerations” in the prospectus dated July 25, 2019, which is a part of our Registration Statement on Form S-3 (File No. 333-232816), as amended or supplemented, (ii) the disclosure under the heading “Federal Income Tax Considerations” in the prospectus dated April 30, 2021, which is a part of our Registration Statement on Form S-3 (File No. 333-255633), as amended or supplemented, and (iii) similarly titled sections in the prospectuses contained in our other Registration Statements on Form S-3 (File Nos. 333-128132, 333-108556, 333-70678, 333-59138, 333-51344, 333-39498, 333-35008, 333-85009, 333-82063, 333-66919, 333-50081, 333-26833, 333-24289, and 033-64659), as amended or supplemented. Our updated discussion addresses recent tax law changes.

Item 9C.  Holding Foreign Companies Accountable Act Disclosure

Not applicable.

PART III

Item 10.  Directors, Executive Officers and Corporate Governance

The following is a summary of the executive officers of the General Partner:

James B. Connor, age 63.  Mr. Connor was named the General Partner's Chairman and Chief Executive Officer, commencing April 26, 2017, and joined the General Partner's Board of Directors in 2015. Prior to being named Chairman and Chief Executive Officer, Mr. Connor held various senior management positions with the General Partner, including President and Chief Executive Officer from January 1, 2016 to April 25, 2017; Senior Executive Vice President and Chief Operating Officer from 2013 to 2015; Senior Regional Executive Vice President from 2011 to 2013; Executive Vice President of the Midwest Region from 2003 to 2011; and Senior Vice President between 1998 and 2003. Prior to joining the General Partner in 1998, Mr. Connor held numerous executive and brokerage positions with Cushman & Wakefield, most recently serving as Senior Managing Director for the Midwest area. In 2019, Mr. Connor joined the Board of Trustees of EPR Properties, a publicly traded REIT. Mr. Connor also serves on the Board of Trustees of Roosevelt University.

Mark A. Denien, age 54. Mr. Denien was appointed the General Partner's Executive Vice President and Chief Financial Officer on May 17, 2013. Prior to being named Executive Vice President and Chief Financial Officer, Mr. Denien was Senior Vice President and Chief Accounting Officer from 2009 to 2013 and, prior to that, served as Senior Vice President, Corporate Controller. Prior to joining the General Partner in 2005, Mr. Denien spent 16 years with KPMG LLP. Mr. Denien serves as a director of Goodwill Industries of Central Indiana, Inc.

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Steven W. Schnur, age 48. Mr. Schnur has served as the General Partner's Executive Vice President and Chief Operating Officer since September 2019. Prior to being named Executive Vice President and Chief Operating Officer, Mr. Schnur served as Senior Regional Executive Vice President from May 2017 until September 2019; Executive Vice President, Central Region from January 2015 until May 2017; Senior Regional, Senior Vice President from August 2014 until January 2015; Senior Vice President, Midwest Region from December 2013 until August 2014; and Senior Vice President, Chicago from October 2004 until December 2013. Mr. Schnur began his career with the General Partner as a Vice President, Leasing in September 2003. Prior to that, Mr. Schnur was Director of Real Estate for Opus North Corporation.

Nicholas C. Anthony, age 56. Mr. Anthony was appointed the General Partner's Executive Vice President and Chief Investment Officer on June 17, 2013. His responsibilities include overseeing the General Partner's acquisition and disposition activity, as well as the overall management of its joint venture business. Prior to being named Executive Vice President and Chief Investment Officer, Mr. Anthony held various senior management positions with the General Partner, including Senior Vice President, Capital Transactions and Joint Ventures from 2010 until 2013. Mr. Anthony began his career with the General Partner in 1989 as a staff accountant.

Ann C. Dee, age 62. Ms. Dee was appointed the General Partner's Executive Vice President, General Counsel and Corporate Secretary on June 17, 2013. Prior to being named Executive Vice President, General Counsel and Corporate Secretary, Ms. Dee held the position of Senior Vice President, General Counsel and Corporate Secretary from January 1, 2013 until June 17, 2013 and the position of Deputy General Counsel and Senior Vice President from June 23, 2008 until January 1, 2013. Ms. Dee joined the General Partner in 1996 as a Corporate Attorney. Prior to joining the General Partner, Ms. Dee serves as a member of the Board of Directors of First Internet Bancorp, a bank holding company in Fishers, Indiana and the Center for Performing Arts in Carmel, Indiana.

All other information required by this item will be included in the General Partner's 2022 proxy statement (the "2022 Proxy Statement") for the General Partner's Annual Meeting of Shareholders to be held on April 14, 2022, and is incorporated herein by reference. In addition, the General Partner's Code of Business Ethics (which applies to each of our associates, officers and directors) and the General Partner's Corporate Governance Guidelines are available in the investor information/corporate governance section of our website at www.dukerealty.com. A copy of these documents may also be obtained without charge by writing to Duke Realty Corporation, 8711 River Crossing Boulevard, Indianapolis, Indiana 46240, Attention: Investor Relations.

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Item 11.  Executive Compensation

The information required by Item 11 of this Report will be included in our 2022 Proxy Statement, which information is incorporated herein by this reference.

Item 12.  Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The information required by Item 12 of this Report will be included in our 2022 Proxy Statement, which information is incorporated herein by this reference.

Item 13. Certain Relationships and Related Transactions, and Director Independence

The information required to be furnished pursuant to Item 13 of this Report will be included in our 2022 Proxy Statement, which information is incorporated herein by this reference.

Item 14. Principal Accountant Fees and Services

KPMG LLP (Indianapolis, Indiana; PCAOB ID#185) is the independent registered public accounting firm for both the General Partner and the Partnership. The information required to be furnished pursuant to Item 14 of this Report will be included in our 2022 Proxy Statement, which information is incorporated herein by this reference.

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PART IV

Item 15.  Exhibits and Financial Statement Schedules 

(a)The following documents are filed as part of this Annual Report:

1.    Consolidated Financial Statements

The following Consolidated Financial Statements, together with the Management's Report on Internal Control and the Report of Independent Registered Public Accounting Firm are listed below:

			Duke Realty Corporation:
			Management's Report on Internal Control
			Report of Independent Registered Public Accounting Firm
			Duke Realty Limited Partnership:
			Management's Report on Internal Control
			Report of Independent Registered Public Accounting Firm
			Duke Realty Corporation:
			Consolidated Balance Sheets, December 31, 2021 and 2020
			Consolidated Statements of Operations and Comprehensive Income, Years Ended December 31, 2021, 2020 and 2019
			Consolidated Statements of Cash Flows, Years Ended December 31, 2021, 2020 and 2019
			Consolidated Statements of Changes in Equity, Years Ended December 31, 2021, 2020 and 2019
			Duke Realty Limited Partnership:
			Consolidated Balance Sheets, December 31, 2021 and 2020
			Consolidated Statements of Operations and Comprehensive Income, Years Ended December 31, 2021, 2020 and 2019
			Consolidated Statements of Cash Flows, Years Ended December 31, 2021, 2020 and 2019
			Consolidated Statements of Changes in Equity, Years Ended December 31, 2021, 2020 and 2019
			Duke Realty Corporation and Duke Realty Limited Partnership:
			Notes to Consolidated Financial Statements

 

2.    Consolidated Financial Statement Schedules

    Duke Realty Corporation and Duke Realty Limited Partnership:

    Schedule III – Real Estate and Accumulated Depreciation

 3.    Exhibits

The exhibits required to be filed with this Report pursuant to Item 601 of Regulation S-K are listed on pages 115 to 119 of this Report and are incorporated herein by reference. 

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Management's Report on Internal Control

We, as management of Duke Realty Corporation and its subsidiaries (the "General Partner"), are responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended). Pursuant to the rules and regulations of the Securities and Exchange Commission, internal control over financial reporting is a process designed by, or under the supervision of, the company's principal executive and principal financial officers, or persons performing similar functions, and effected by the company's board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America and includes those policies and procedures that:

 

•Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of assets of the company;

•Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and

•Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company's assets that could have a material effect on the financial statements.

Management has evaluated the effectiveness of its internal control over financial reporting as of December 31, 2021 based on the control criteria established in a report entitled Internal Control – Integrated Framework (2013), issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on such evaluation, we have concluded that, as of December 31, 2021, our internal control over financial reporting is effective based on these criteria.

The independent registered public accounting firm of KPMG LLP, as auditors of the General Partner's consolidated financial statements, has also issued an audit report on the General Partner's internal control over financial reporting.

 

/s/ James B. Connor
James B. Connor
Chairman and Chief Executive Officer
/s/ Mark A. Denien
Mark A. Denien
Executive Vice President and Chief Financial Officer

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Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors

Duke Realty Corporation:

Opinions on the Consolidated Financial Statements and Internal Control Over Financial Reporting

We have audited the accompanying consolidated balance sheets of Duke Realty Corporation and subsidiaries (the Company) as of December 31, 2021 and 2020, the related consolidated statements of operations and comprehensive income, cash flows, and changes in equity for each of the years in the three-year period ended December 31, 2021, and the related notes and financial statement schedule III - real estate and accumulated depreciation (collectively, the consolidated financial statements). We also have audited the Company's internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2021, in conformity with U.S. generally accepted accounting principles. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Basis for Opinions

The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control. Our responsibility is to express an opinion on the Company’s consolidated financial statements and an opinion on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

-55-

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Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Assessment of certain values assigned to acquired assets and liabilities in certain asset acquisitions

As discussed in Notes 2 and 5 to the consolidated financial statements, the Company acquired approximately $571 million of real estate assets in 2021. For asset acquisitions, the Company records the purchase price to the tangible and identified intangible assets based on its “as-if vacant” fair value and other valuation techniques.

We identified the assessment of the fair value of land and the below market component of in-place leases in certain asset acquisitions as a critical audit matter. There is a high degree of subjective auditor judgment in determining the fair value of land and market rents used to determine the below market component of in-place leases.

The primary procedures we performed to address this critical audit matter included the following. We tested certain internal controls over the Company’s asset allocation process, including controls to identify and select publicly available comparable land sales and market rents used to estimate the fair value of land and the below market component of in-place leases, respectively. We involved valuation professionals with specialized skills and knowledge, who assisted in comparing:

•the Company’s estimated fair value of land to a range of independently developed estimates based on publicly available and comparable land sales: and

•the market rents used in the Company’s estimated fair value of the below market component of in-place leases to publicly available market data for similar properties.

/s/ KPMG LLP
We have served as the Company’s auditor since 1986.
Indianapolis, Indiana
February 18, 2022

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Management's Report on Internal Control

We, as management of Duke Realty Limited Partnership and its subsidiaries (the "Partnership"), are responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended). Pursuant to the rules and regulations of the Securities and Exchange Commission, internal control over financial reporting is a process designed by, or under the supervision of the principal executive and principal financial officers, or persons performing similar functions, of Duke Realty Corporation (the "General Partner"), and effected by the General Partner's board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America and includes those policies and procedures that:

 

•Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of assets of the Partnership;

•Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the General Partner; and

•Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Partnership's assets that could have a material effect on the financial statements.

Management has evaluated the effectiveness of its internal control over financial reporting as of December 31, 2021 based on the control criteria established in a report entitled Internal Control – Integrated Framework (2013), issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on such evaluation, we have concluded that, as of December 31, 2021, our internal control over financial reporting is effective based on these criteria.

The independent registered public accounting firm of KPMG LLP, as auditors of the Partnership's consolidated financial statements, has also issued an audit report on the Partnership's internal control over financial reporting.

 

/s/ James B. Connor
James B. Connor
Chairman and Chief Executive Officer
of the General Partner
/s/ Mark A. Denien
Mark A. Denien
Executive Vice President and Chief Financial Officer
of the General Partner

-57-

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Report of Independent Registered Public Accounting Firm

To the Unitholders of Duke Realty Limited Partnership and the Board of Directors of Duke Realty Corporation:

Opinions on the Consolidated Financial Statements and Internal Control Over Financial Reporting

We have audited the accompanying consolidated balance sheets of Duke Realty Limited Partnership and subsidiaries (the Partnership) as of December 31, 2021 and 2020, the related consolidated statements of operations and comprehensive income, cash flows, and changes in equity for each of the years in the three-year period ended December 31, 2021, and the related notes and financial statement schedule III - real estate and accumulated depreciation (collectively, the consolidated financial statements). We also have audited the Partnership's internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Partnership as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2021, in conformity with U.S. generally accepted accounting principles. Also in our opinion, the Partnership maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Basis for Opinions

The Partnership’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control. Our responsibility is to express an opinion on the Partnership’s consolidated financial statements and an opinion on the Partnership’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Partnership in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

-58-

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Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Assessment of certain values assigned to acquired assets and liabilities in certain asset acquisitions

As discussed in Notes 2 and 5 to the consolidated financial statements, the Partnership acquired approximately $571 million of real estate assets in 2021. For asset acquisitions, the Partnership records the purchase price to the tangible and identified intangible assets based on its “as-if vacant” fair value and other valuation techniques.

We identified the assessment of the fair value of land and the below market component of in-place leases in certain asset acquisitions as a critical audit matter. There is a high degree of subjective auditor judgment in determining the fair value of land and market rents used to determine the below market component of in-place leases.

The primary procedures we performed to address this critical audit matter included the following. We tested certain internal controls over the Partnership’s asset allocation process, including controls to identify and select publicly available comparable land sales and market rents used to estimate the fair value of land and the below market component of in-place leases, respectively. We involved valuation professionals with specialized skills and knowledge, who assisted in comparing:

•the Partnership’s estimated fair value of land to a range of independently developed estimates based on publicly available and comparable land sales: and

•the market rents used in the Partnership’s estimated fair value of the below market component of in-place leases to publicly available market data for similar properties.

/s/ KPMG LLP
We have served as the Partnership’s auditor since 1994.
Indianapolis, Indiana
February 18, 2022

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DUKE REALTY CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets

As of December 31,

(in thousands, except per share amounts)

 

			2021						2020
ASSETS
Real estate investments:
Real estate assets			$	9,616,076					$	8,745,155
Construction in progress			744,871						695,219
Investments in and advances to unconsolidated joint ventures			168,336						131,898
Undeveloped land			473,317						291,614
			11,002,600						9,863,886
Accumulated depreciation			(1,684,413)						(1,659,308)
Net real estate investments			9,318,187						8,204,578
Real estate investments and other assets held-for-sale			144,651						67,946
Cash and cash equivalents			69,752						6,309
Accounts receivable			13,449						15,204
Straight-line rent receivable			172,225						153,943
Receivables on construction contracts, including retentions			57,258						30,583
Deferred leasing and other costs, net of accumulated amortization of $209,975 and $204,122			337,936						329,765
Restricted cash held in escrow for like-kind exchange			—						47,682
Other escrow deposits and other assets			332,197						255,384
			$	10,445,655					$	9,111,394
LIABILITIES AND EQUITY
Indebtedness:
Secured debt, net of deferred financing costs of $304 and $343			$	59,418					$	64,074
Unsecured debt, net of deferred financing costs of $45,136 and $32,763			3,629,864						3,025,977
Unsecured line of credit			—						295,000
			3,689,282						3,385,051
Liabilities related to real estate investments held-for-sale			6,278						7,740
Construction payables and amounts due subcontractors, including retentions			107,009						62,332
Accrued real estate taxes			77,464						76,501
Accrued interest			20,815						18,363
Other liabilities			339,023						269,806
Tenant security deposits and prepaid rents			66,823						57,153
Total liabilities			4,306,694						3,876,946
Shareholders' equity:
Common shares ($0.01 par value); 600,000 shares authorized; 382,513 and 373,258 shares issued and outstanding, respectively			3,825						3,733
Additional paid-in capital			6,143,147						5,723,326
Accumulated other comprehensive loss			(28,011)						(31,568)
Distributions in excess of net income			(75,210)						(532,519)
Total shareholders' equity			6,043,751						5,162,972
Noncontrolling interests			95,210						71,476
Total equity			6,138,961						5,234,448
			$	10,445,655					$	9,111,394

See accompanying Notes to Consolidated Financial Statements.

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DUKE REALTY CORPORATION AND SUBSIDIARIES

Consolidated Statements of Operations and Comprehensive Income

For the Years Ended December 31,

(in thousands, except per share amounts)

			2021						2020						2019
Revenues:
Rental and related revenue			$	1,025,663					$	929,194					$	855,833
General contractor and service fee revenue			80,260						64,004						117,926
			1,105,923						993,198						973,759
Expenses:
Rental expenses			85,782						76,639						75,584
Real estate taxes			159,580						149,295						129,520
General contractor and other services expenses			68,118						57,976						111,566
Depreciation and amortization			362,148						353,013						327,223
			675,628						636,923						643,893
Other operating activities:
Equity in earnings of unconsolidated joint ventures			32,804						11,944						31,406
Gain on sale of properties			585,685						127,700						234,653
Gain on land sales			12,917						10,458						7,445
Other operating expenses			(3,607)						(8,209)						(5,318)
Impairment charges			—						(5,626)						—
Non-incremental costs related to successful leases			(13,302)						(12,292)						(12,402)
General and administrative expenses			(69,554)						(62,404)						(60,889)
			544,943						61,571						194,895
Operating income			975,238						417,846						524,761
Other income (expenses):
Interest and other income, net			4,451						1,721						9,941
Interest expense			(84,843)						(93,442)						(89,756)
Loss on debt extinguishment			(17,901)						(32,900)						(6,320)
Gain on involuntary conversion			3,222						4,312						2,259
Income from continuing operations before income taxes			880,167						297,537						440,885
Income tax (expense) benefit			(18,549)						5,112						(8,686)
Income from continuing operations			861,618						302,649						432,199
Discontinued operations:
Gain on sale of properties			—						111						445
Income from discontinued operations			—						111						445
Net income			861,618						302,760						432,644
Net income attributable to noncontrolling interests			(8,723)						(2,845)						(3,672)
Net income attributable to common shareholders			$	852,895					$	299,915					$	428,972
Basic net income per common share:
Continuing operations attributable to common shareholders			$	2.25					$	0.81					$	1.18
Total			$	2.25					$	0.81					$	1.18
Diluted net income per common share:
Continuing operations attributable to common shareholders			$	2.25					$	0.80					$	1.18
Total			$	2.25					$	0.80					$	1.18
Weighted average number of common shares outstanding			377,673						370,057						362,234
Weighted average number of common shares and potential dilutive securities			383,476						374,156						367,339
Comprehensive income:
Net income			$	861,618					$	302,760					$	432,644
Other comprehensive income (loss):
Unrealized losses on interest rate swap contracts			—						—						(30,893)
Amortization of interest rate swap contracts			3,557						3,468						533
Total other comprehensive income (loss)			3,557						3,468						(30,360)
Comprehensive income			$	865,175					$	306,228					$	402,284

See accompanying Notes to Consolidated Financial Statements.

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DUKE REALTY CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the Years Ended December 31,

(in thousands)

			2021						2020						2019
Cash flows from operating activities:
Net income			$	861,618					$	302,760					$	432,644
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of buildings and tenant improvements			304,935						297,158						272,422
Amortization of deferred leasing and other costs			57,213						55,855						54,801
Amortization of deferred financing costs			9,735						9,155						6,536
Straight-line rental income and expense, net			(32,081)						(25,865)						(21,197)
Impairment charges			—						5,626						—
Loss on debt extinguishment			17,901						32,900						6,320
Gain on involuntary conversion			(3,222)						(4,312)						(2,259)
Gain on land and property sales			(598,602)						(138,269)						(242,543)
Third-party construction contracts, net			(6,269)						(2,511)						9,254
Other accrued revenues and expenses, net			48,194						29,333						8,476
Equity in earnings (in excess of) less than operating distributions received from unconsolidated joint ventures			(16,996)						4,606						(18,556)
Net cash provided by operating activities			642,426						566,436						505,898
Cash flows from investing activities:
Development of real estate investments			(661,416)						(573,544)						(446,801)
Acquisition of buildings and related intangible assets			(447,584)						(383,672)						(210,224)
Acquisition of land and other real estate assets			(700,632)						(248,413)						(388,202)
Second generation tenant improvements, leasing costs and building improvements			(68,445)						(45,037)						(53,137)
Other deferred leasing costs			(42,214)						(41,607)						(32,921)
Other assets			(19,067)						(4,868)						(10,777)
Proceeds from the repayments of notes receivable from property sales			—						110,000						162,550
Proceeds from land and property sales, net			1,067,967						336,255						432,662
Capital distributions from unconsolidated joint ventures			61,616						876						26,272
Capital contributions and advances to unconsolidated joint ventures			(22,640)						(6,211)						(34,496)
Net cash used for investing activities			(832,415)						(856,221)						(555,074)
Cash flows from financing activities:
Proceeds from issuance of common shares, net			406,576						187,856						272,761
Proceeds from unsecured debt			940,749						663,123						582,284
Payments on unsecured debt			(390,900)						(546,972)						(255,812)
Proceeds from secured debt financings			—						18,400						—
Payments on secured indebtedness including principal amortization			(4,413)						(13,457)						(45,515)
(Repayments) borrowings on line of credit, net			(295,000)						295,000						(30,000)
Distributions to common shareholders			(394,487)						(355,287)						(318,702)
Distributions to noncontrolling interests, net			(4,352)						(3,347)						(2,648)
Tax payments on stock-based compensation awards			(5,132)						(4,360)						(6,825)
Change in book cash overdrafts			(12,453)						1,941						138
Cash settlement of interest rate swaps			—						—						(35,569)
Other financing activities			(357)						163						(10,183)
Deferred financing costs			(14,262)						(7,483)						(4,839)
Redemption of Limited Partner Units			(39)						—						—
Net cash provided by financing activities			225,930						235,577						145,090
Net increase (decrease) in cash, cash equivalents and restricted cash			35,941						(54,208)						95,914
Cash, cash equivalents and restricted cash at beginning of year			67,223						121,431						25,517
Cash, cash equivalents and restricted cash at end of year			$	103,164					$	67,223					$	121,431
Non-cash activities:
Lease liabilities arising from right-of-use assets			$	19,822					$	20,883					$	40,467
Assumption of indebtedness and other liabilities in real estate acquisitions			$	128,639					$	39,966					$	—
Non-cash distribution of assets from unconsolidated joint ventures, net			$	11,124					$	—					$	—
Contribution of properties to unconsolidated joint venture			$	74,942					$	—					$	—
Conversion of Limited Partner Units to common shares			$	5,099					$	—					$	1,624
Issuance of Limited Partner Units for acquisition			$	11,603					$	—					$	—

See accompanying Notes to Consolidated Financial Statements.

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DUKE REALTY CORPORATION AND SUBSIDIARIES

Consolidated Statements of Changes in Equity

(in thousands, except per share data)

 

									Common Shareholders
									Common Stock						Additional Paid-in Capital						Accumulated Other Comprehensive Income (Loss)						Distributions in Excess of Net Income						Non- Controlling Interests						Total
Balance at December 31, 2018									$	3,589					$	5,244,375					$	(4,676)					$	(585,087)					$	55,042					$	4,713,243
Net income									—						—						—						428,972						3,672						432,644
Other comprehensive loss									—						—						(30,360)						—						—						(30,360)
Issuance of common shares									83						272,678						—						—						—						272,761
Contributions from noncontrolling interests									—						—						—						—						312						312
Stock-based compensation plan activity									7						6,787						—						(1,175)						7,703						13,322
Conversion of Limited Partner Units									1						1,623						—						—						(1,624)						—
Distributions to common shareholders ($0.88 per share)									—						—						—						(318,702)						—						(318,702)
Distributions to noncontrolling interests									—						—						—						—						(2,960)						(2,960)
Balance at December 31, 2019									$	3,680					$	5,525,463					$	(35,036)					$	(475,992)					$	62,145					$	5,080,260
Net income									—						—						—						299,915						2,845						302,760
Other comprehensive income									—						—						3,468						—						—						3,468
Issuance of common shares									50						187,806						—						—						—						187,856
Contributions from noncontrolling interests									—						—						—						—						200						200
Stock-based compensation plan activity									3						10,057						—						(1,155)						9,833						18,738
Distributions to common shareholders ($0.96 per share)									—						—						—						(355,287)						—						(355,287)
Distributions to noncontrolling interests									—						—						—						—						(3,547)						(3,547)
Balance at December 31, 2020									$	3,733					$	5,723,326					$	(31,568)					$	(532,519)					$	71,476					$	5,234,448
Net income									—						—						—						852,895						8,723						861,618
Other comprehensive income									—						—						3,557						—						—						3,557
Issuance of common shares									82						406,494						—						—						—						406,576
Stock-based compensation plan activity									6						8,274						—						(1,099)						12,895						20,076
Issuance of Limited Partner Units									—						—						—						—						11,564						11,564
Conversion of Limited Partner Units									4						5,095						—						—						(5,099)						—
Redemption of Limited Partner Units									—						(42)						—						—						3						(39)
Distributions to common shareholders ($1.045 per share)									—						—						—						(394,487)						—						(394,487)
Distributions to noncontrolling interests									—						—						—						—						(4,352)						(4,352)
Balance at December 31, 2021									$	3,825					$	6,143,147					$	(28,011)					$	(75,210)					$	95,210					$	6,138,961

See accompanying Notes to Consolidated Financial Statements.

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DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES

Consolidated Balance Sheets

As of December 31,

(in thousands)

 

			2021						2020
ASSETS
Real estate investments:
Real estate assets			$	9,616,076					$	8,745,155
Construction in progress			744,871						695,219
Investments in and advances to unconsolidated joint ventures			168,336						131,898
Undeveloped land			473,317						291,614
			11,002,600						9,863,886
Accumulated depreciation			(1,684,413)						(1,659,308)
Net real estate investments			9,318,187						8,204,578
Real estate investments and other assets held-for-sale			144,651						67,946
Cash and cash equivalents			69,752						6,309
Accounts receivable			13,449						15,204
Straight-line rent receivable			172,225						153,943
Receivables on construction contracts, including retentions			57,258						30,583
Deferred leasing and other costs, net of accumulated amortization of $209,975 and $204,122			337,936						329,765
Restricted cash held in escrow for like-kind exchange			—						47,682
Other escrow deposits and other assets			332,197						255,384
			$	10,445,655					$	9,111,394
LIABILITIES AND EQUITY
Indebtedness:
Secured debt, net of deferred financing costs of $304 and $343			$	59,418					$	64,074
Unsecured debt, net of deferred financing costs of $45,136 and $32,763			3,629,864						3,025,977
Unsecured line of credit			—						295,000
			3,689,282						3,385,051
Liabilities related to real estate investments held-for-sale			6,278						7,740
Construction payables and amounts due subcontractors, including retentions			107,009						62,332
Accrued real estate taxes			77,464						76,501
Accrued interest			20,815						18,363
Other liabilities			339,023						269,806
Tenant security deposits and prepaid rents			66,823						57,153
Total liabilities			4,306,694						3,876,946
Partners’ equity:
Common equity (382,513 and 373,258 General Partner Units issued and outstanding, respectively)			6,071,762						5,194,540
Limited Partners' common equity (3,663 and 3,326 Limited Partner Units issued and outstanding, respectively)			90,679						66,874
Accumulated other comprehensive loss			(28,011)						(31,568)
Total partners' equity			6,134,430						5,229,846
Noncontrolling interests			4,531						4,602
Total equity			6,138,961						5,234,448
			$	10,445,655					$	9,111,394

See accompanying Notes to Consolidated Financial Statements.

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DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES

Consolidated Statements of Operations and Comprehensive Income

For the Years Ended December 31,

(in thousands, except per unit amounts)

			2021						2020						2019
Revenues:
Rental and related revenue			$	1,025,663					$	929,194					$	855,833
General contractor and service fee revenue			80,260						64,004						117,926
			1,105,923						993,198						973,759
Expenses:
Rental expenses			85,782						76,639						75,584
Real estate taxes			159,580						149,295						129,520
General contractor and other services expenses			68,118						57,976						111,566
Depreciation and amortization			362,148						353,013						327,223
			675,628						636,923						643,893
Other operating activities:
Equity in earnings of unconsolidated joint ventures			32,804						11,944						31,406
Gain on sale of properties			585,685						127,700						234,653
Gain on land sales			12,917						10,458						7,445
Other operating expenses			(3,607)						(8,209)						(5,318)
Impairment charges			—						(5,626)						—
Non-incremental costs related to successful leases			(13,302)						(12,292)						(12,402)
General and administrative expenses			(69,554)						(62,404)						(60,889)
			544,943						61,571						194,895
Operating income			975,238						417,846						524,761
Other income (expenses):
Interest and other income, net			4,451						1,721						9,941
Interest expense			(84,843)						(93,442)						(89,756)
Loss on debt extinguishment			(17,901)						(32,900)						(6,320)
Gain on involuntary conversion			3,222						4,312						2,259
Income from continuing operations before income taxes			880,167						297,537						440,885
Income tax (expense) benefit			(18,549)						5,112						(8,686)
Income from continuing operations			861,618						302,649						432,199
Discontinued operations:
Gain on sale of properties			—						111						445
Income from discontinued operations			—						111						445
Net income			861,618						302,760						432,644
Net (income) loss attributable to noncontrolling interests			(369)						(182)						6
Net income attributable to common unitholders			$	861,249					$	302,578					$	432,650
Basic net income per Common Unit:
Continuing operations attributable to common unitholders			$	2.25					$	0.81					$	1.18
Total			$	2.25					$	0.81					$	1.18
Diluted net income per Common Unit:
Continuing operations attributable to common unitholders			$	2.25					$	0.80					$	1.18
Total			$	2.25					$	0.80					$	1.18
Weighted average number of Common Units outstanding			381,381						373,360						365,352
Weighted average number of Common Units and potential dilutive securities			383,476						374,156						367,339
Comprehensive income:
Net income			$	861,618					$	302,760					$	432,644
Other comprehensive income (loss):
Unrealized losses on interest rate swap contracts			—						—						(30,893)
Amortization of interest rate swap contracts			3,557						3,468						533
Total other comprehensive income (loss)			3,557						3,468						(30,360)
Comprehensive income			$	865,175					$	306,228					$	402,284

See accompanying Notes to Consolidated Financial Statements.

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DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the Years Ended December 31,

(in thousands)

 

			2021						2020						2019
Cash flows from operating activities:
Net income			$	861,618					$	302,760					$	432,644
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of buildings and tenant improvements			304,935						297,158						272,422
Amortization of deferred leasing and other costs			57,213						55,855						54,801
Amortization of deferred financing costs			9,735						9,155						6,536
Straight-line rental income and expense, net			(32,081)						(25,865)						(21,197)
Impairment charges			—						5,626						—
Loss on debt extinguishment			17,901						32,900						6,320
Gain on involuntary conversion			(3,222)						(4,312)						(2,259)
Gain on land and property sales			(598,602)						(138,269)						(242,543)
Third-party construction contracts, net			(6,269)						(2,511)						9,254
Other accrued revenues and expenses, net			48,194						29,333						8,476
Equity in earnings (in excess of) less than operating distributions received from unconsolidated joint ventures			(16,996)						4,606						(18,556)
Net cash provided by operating activities			642,426						566,436						505,898
Cash flows from investing activities:
Development of real estate investments			(661,416)						(573,544)						(446,801)
Acquisition of buildings and related intangible assets			(447,584)						(383,672)						(210,224)
Acquisition of land and other real estate assets			(700,632)						(248,413)						(388,202)
Second generation tenant improvements, leasing costs and building improvements			(68,445)						(45,037)						(53,137)
Other deferred leasing costs			(42,214)						(41,607)						(32,921)
Other assets			(19,067)						(4,868)						(10,777)
Proceeds from the repayments of notes receivable from property sales			—						110,000						162,550
Proceeds from land and property sales, net			1,067,967						336,255						432,662
Capital distributions from unconsolidated joint ventures			61,616						876						26,272
Capital contributions and advances to unconsolidated joint ventures			(22,640)						(6,211)						(34,496)
Net cash used for investing activities			(832,415)						(856,221)						(555,074)
Cash flows from financing activities:
Contributions from the General Partner			406,576						187,856						272,761
Proceeds from unsecured debt			940,749						663,123						582,284
Payments on unsecured debt			(390,900)						(546,972)						(255,812)
Proceeds from secured debt financings			—						18,400						—
Payments on secured indebtedness including principal amortization			(4,413)						(13,457)						(45,515)
(Repayments) borrowings on line of credit, net			(295,000)						295,000						(30,000)
Distributions to common unitholders			(398,399)						(358,484)						(321,469)
(Distributions to) contributions from noncontrolling interests, net			(440)						(150)						119
Tax payments on stock-based compensation awards			(5,132)						(4,360)						(6,825)
Change in book cash overdrafts			(12,453)						1,941						138
Cash settlement of interest rate swaps			—						—						(35,569)
Other financing activities			(357)						163						(10,183)
Deferred financing costs			(14,262)						(7,483)						(4,839)
Redemption of Limited Partner Units			(39)						—						—
Net cash provided by financing activities			225,930						235,577						145,090
Net increase (decrease) in cash, cash equivalents and restricted cash			35,941						(54,208)						95,914
Cash, cash equivalents and restricted cash at beginning of year			67,223						121,431						25,517
Cash, cash equivalents and restricted cash at end of year			$	103,164					$	67,223					$	121,431
Non-cash activities:
Lease liabilities arising from right-of-use assets			$	19,822					$	20,883					$	40,467
Assumption of indebtedness and other liabilities in real estate acquisitions			$	128,639					$	39,966					$	—
Non-cash distribution of assets from unconsolidated joint ventures, net			$	11,124					$	—					$	—
Contribution of properties to unconsolidated joint venture			$	74,942					$	—					$	—
Conversion of Limited Partner Units to common shares of the General Partner			$	5,099					$	—					$	1,624
Issuance of Limited Partner Units for acquisition			$	11,603					$	—					$	—

See accompanying Notes to Consolidated Financial Statements.

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DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES

Consolidated Statements of Changes in Equity

(in thousands, except per unit data) 

			Common Unitholders
			General												Limited						Accumulated
			Partner												Partners'						Other						Total
			Common												Common						Comprehensive						Partners'						Noncontrolling						Total
			Equity												Equity						Income (Loss)						Equity						Interests						Equity
Balance at December 31, 2018			$	4,662,877											$	50,585					$	(4,676)					$	4,708,786					$	4,457					$	4,713,243
Net income			428,972												3,678						—						432,650						(6)						432,644
Other comprehensive loss			—												—						(30,360)						(30,360)						—						(30,360)
Capital contribution from the General Partner			272,761												—						—						272,761						—						272,761
Stock-based compensation plan activity			5,619												7,703						—						13,322						—						13,322
Contributions from noncontrolling interests			—												—						—						—						312						312
Conversion of Limited Partner Units			1,624												(1,624)						—						—						—						—
Distributions to Partners ($0.88 per Common Unit)			(318,702)												(2,767)						—						(321,469)						—						(321,469)
Distributions to noncontrolling interests			—												—						—						—						(193)						(193)
Balance at December 31, 2019			$	5,053,151											$	57,575					$	(35,036)					$	5,075,690					$	4,570					$	5,080,260
Net income			299,915												2,663						—						302,578						182						302,760
Other comprehensive income			—												—						3,468						3,468						—						3,468
Capital contribution from the General Partner			187,856												—						—						187,856						—						187,856
Stock-based compensation plan activity			8,905												9,833						—						18,738						—						18,738
Contributions from noncontrolling interests			—												—						—						—						200						200
Distributions to Partners ($0.96 per Common Unit)			(355,287)												(3,197)						—						(358,484)						—						(358,484)
Distributions to noncontrolling interests			—												—						—						—						(350)						(350)
Balance at December 31, 2020			$	5,194,540											$	66,874					$	(31,568)					$	5,229,846					$	4,602					$	5,234,448
Net income			852,895												8,354						—						861,249						369						861,618
Other comprehensive income			—												—						3,557						3,557						—						3,557
Capital contribution from the General Partner			406,576												—						—						406,576						—						406,576
Stock-based compensation plan activity			7,181												12,895						—						20,076						—						20,076
Issuance of Limited Partner Units			—												11,564						—						11,564						—						11,564
Conversion of Limited Partner Units			5,099												(5,099)						—						—						—						—
Redemption of Limited Partner Units			(42)												3						—						(39)						—						(39)
Distributions to Partners ($1.045 per Common Unit)			(394,487)												(3,912)						—						(398,399)						—						(398,399)
Distributions to noncontrolling interests			—												—						—						—						(440)						(440)
Balance at December 31, 2021			$	6,071,762											$	90,679					$	(28,011)					$	6,134,430					$	4,531					$	6,138,961

See accompanying Notes to Consolidated Financial Statements.

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DUKE REALTY CORPORATION AND DUKE REALTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1)The Company

The General Partner was formed in 1985, and we believe that it qualifies as a REIT under the provisions of the Code. The Partnership was formed on October 4, 1993, when the General Partner contributed all of its properties and related assets and liabilities, together with the net proceeds from an offering of additional shares of its common stock, to the Partnership. Simultaneously, the Partnership completed the acquisition of Duke Associates, a full-service commercial real estate firm operating in the Midwest whose operations began in 1972.

The General Partner is the sole general partner of the Partnership, owning approximately 99.1% of the Common Units at December 31, 2021. The remaining 0.9% of the Common Units are owned by limited partners. As the sole general partner of the Partnership, the General Partner has full, exclusive and complete responsibility and discretion in the day-to-day management and control of the Partnership. The General Partner and the Partnership are operated as one enterprise. The management of the General Partner consists of the same members as the management of the Partnership. As the sole general partner with control of the Partnership, the General Partner consolidates the Partnership for financial reporting purposes, and the General Partner does not have any significant assets other than its investment in the Partnership. Therefore, the assets and liabilities of the General Partner and the Partnership are substantially the same.

Limited partners have the right to redeem their Limited Partner Units, subject to certain restrictions. Pursuant to the Partnership Agreement, the General Partner is obligated to redeem the Limited Partner Units in shares of its common stock, unless it determines in its reasonable discretion that the issuance of shares of its common stock could cause it to fail to qualify as a REIT. Each Limited Partner Unit shall be redeemed for one share of the General Partner's common stock, or, in the event that the issuance of shares could cause the General Partner to fail to qualify as a REIT, cash equal to the fair market value of one share of the General Partner's common stock at the time of redemption, in each case, subject to certain adjustments described in the Partnership Agreement. The Limited Partner Units are not required, per the terms of the Partnership Agreement, to be redeemed in registered shares of the General Partner.

As of December 31, 2021, we owned and operated a portfolio primarily consisting of industrial properties and provided real estate services to third-party owners, customers and joint ventures.

Substantially all of our Rental Operations (see Note 9) are conducted through the Partnership. We conduct our Service Operations (see Note 9) through Duke Realty Services, LLC, Duke Realty Services Limited Partnership and Duke Construction Limited Partnership ("DCLP"), which are consolidated entities that are 100% owned by a combination of the General Partner and the Partnership. DCLP is owned through a taxable REIT subsidiary.

(2)Summary of Significant Accounting Policies

Principles of Consolidation

The consolidated financial statements include our accounts and the accounts of our majority-owned or controlled subsidiaries. The equity interests in these controlled subsidiaries not owned by us are reflected as noncontrolling interests in the consolidated financial statements. All significant intercompany balances and transactions have been eliminated in the consolidated financial statements. Investments in entities that we do not control, and variable interest entities ("VIEs") in which we are not the primary beneficiary (to the extent applicable), are not consolidated and are reflected as investments in unconsolidated joint ventures under the equity method of reporting.

Due to the fact that the Limited Partners do not have kick out rights, or substantive participating rights, the Partnership is a VIE. Because the General Partner holds majority ownership and exercises control over every aspect of the Partnership's operations, the General Partner has been determined as the primary beneficiary of the Partnership and, therefore, consolidates the Partnership.

The assets and liabilities of the General Partner and the Partnership are substantially the same, as the General Partner does not have any significant assets other than its investment in the Partnership.

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DUKE REALTY CORPORATION AND DUKE REALTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Reclassifications

Certain amounts in the accompanying consolidated financial statements have been reclassified to conform to the 2021 consolidated financial statement presentation.

Real Estate Investments

Rental real property, including land, land improvements, buildings and tenant improvements, are included in real estate investments and are generally stated at cost. Construction in process and undeveloped land are included in real estate investments and are stated at cost. Real estate investments also include our equity interests in unconsolidated joint ventures that own and operate rental properties and hold land for development.

Depreciation

Buildings and land improvements are depreciated on the straight-line method over their estimated lives not to exceed 40 and 15 years, respectively, for properties that we develop, and not to exceed 30 and 10 years, respectively, for acquired properties. Tenant improvement costs are depreciated using the straight-line method over the shorter of the useful life of the asset or term of the related lease.

Cost Capitalization

Direct and certain indirect costs, including interest, clearly associated with the development, construction or expansion of real estate investments are capitalized as a cost of the property. Direct costs include all leasing commissions paid to third parties for new leases or lease renewals. We capitalize a portion of our indirect costs associated with our construction and development efforts. Costs that are incremental to executing a lease are capitalized. In assessing the amount of direct and indirect costs to be capitalized, allocations are made based on estimates of the actual amount of time spent in each activity. We do not capitalize any costs attributable to downtime or to unsuccessful projects.

We capitalize interest and direct and indirect project costs during the period when we commence activities necessary to get the property ready for its intended use, including land entitlement and preconstruction activities, up to the time the property is substantially complete and ready for its intended use. In addition, we capitalize costs, including real estate taxes, insurance and utilities, that have been allocated to vacant space based on the square footage of the portion of the building not held available for immediate occupancy during the extended lease-up periods after construction of the building shell has been completed if costs are being incurred to ready the vacant space for its intended use. If costs and activities incurred to ready the vacant space cease, then cost capitalization is also discontinued until such activities are resumed. Once necessary work has been completed on a vacant space, project costs are no longer capitalized.

We cease capitalization of all project costs on extended lease-up periods when significant activities have ceased, which does not exceed the shorter of a one-year period after the completion of the building shell or when the property attains 90% occupancy.

Impairment

We evaluate our real estate assets, with the exception of those that are classified as held-for-sale, for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. If such an evaluation is considered necessary, we compare the carrying amount of that real estate asset, or asset group, with the expected undiscounted cash flows that are directly associated with, and that are expected to arise as a direct result of, the use and eventual disposition of that asset, or asset group. Our estimate of the expected future cash flows used in testing for impairment is based on, among other things, our estimates regarding future market conditions, rental rates, occupancy levels, costs of tenant improvements, leasing commissions and other tenant concessions, assumptions regarding the residual value of our properties at the end of our anticipated holding period and the length of our anticipated holding period and is, therefore, subjective by nature. These assumptions could differ materially from actual results. If our strategy changes or if market conditions otherwise dictate a reduction in the holding period and an earlier sale date, an impairment loss could be recognized and such loss could be material.

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DUKE REALTY CORPORATION AND DUKE REALTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

To the extent the carrying amount of a real estate asset, or asset group, exceeds the associated estimate of undiscounted cash flows, an impairment loss is recorded to reduce the carrying value of the asset to its fair value.

The determination of the fair value of real estate assets is also highly subjective, especially in markets where there is a lack of recent comparable transactions. We primarily utilize the income approach to estimate the fair value of our income producing real estate assets. We utilize marketplace participant assumptions to estimate the fair value of a real estate asset when an impairment charge is required to be measured. The estimation of future cash flows, as well as the selection of the discount rate and exit capitalization rate used in applying the income approach, are highly subjective measures in estimating fair value.

Real estate assets classified as held-for-sale are reported at the lower of their carrying value or their fair value, less estimated costs to sell. Once a property is designated as held-for-sale, no further depreciation expense is recorded.

Asset Acquisitions

Our acquisitions of properties have been accounted for as asset acquisitions as they have not met the definition of a business. Transaction costs related to asset acquisitions are capitalized. To the extent that we gain control of real estate properties that are accounted for as asset acquisitions, as opposed to business combinations, we accumulate the costs of any pre-existing equity interests and consideration paid for additional interest acquired and we do not remeasure our pre-existing equity interest. Generally contingencies arising from an asset acquisition are only recognized when probable.

We allocate the purchase price of asset acquisitions to tangible and identified intangible assets based on their relative fair values, using all pertinent information available at the date of acquisition. Capitalized acquisition costs are also included in the total cost basis of acquired properties that are asset acquisitions. The allocation to tangible assets (buildings, tenant improvements and land) is based upon management's determination of the value of the property as if it were vacant. This “as-if vacant” value is estimated using an income, or discounted cash flow, approach that relies upon internally determined assumptions that we believe are consistent with current market conditions for similar properties. The most important assumptions in determining the allocation of the purchase price to tangible assets are the exit capitalization rate, estimated market rents and the fair value of the underlying land. The purchase price of real estate assets is also allocated to intangible assets consisting of the above or below market component of in-place leases and the value of in-place leases.

The value allocable to the above or below market component of an acquired in-place lease is determined based upon the present value (using a discount rate which reflects the risks associated with the acquired leases) of the difference between (i) the contractual amounts to be received pursuant to the lease over its remaining term and (ii) management's estimate of the amounts that would be received using fair market rates over the remaining term of the lease. The amounts allocated to above market leases are included in deferred leasing and other costs in the balance sheet and below market leases are included in other liabilities in the balance sheet; both are amortized to rental income over the remaining terms of the respective leases.

Factors considered in determining the value allocable to in-place leases include estimates, during hypothetical expected lease-up periods, of space that is actually leased at the time of acquisition, of lost rent at market rates, fixed operating costs that will be recovered from tenants and theoretical leasing commissions required to execute similar leases. These intangible assets are included in deferred leasing and other costs in the balance sheet and are amortized over the remaining term of the existing lease.

Joint Ventures

We have equity interests in unconsolidated joint ventures that are primarily engaged in the operation and development of industrial real estate properties.

We consolidate joint ventures that are considered to be VIEs where we are the primary beneficiary. We analyze our investments in joint ventures to determine if the joint venture is considered a VIE and would require consolidation. We (i) evaluate the sufficiency of the total equity investment at risk, (ii) review the voting rights and decision-making authority of the equity investment holders as a group and whether there are limited partners (or similar

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DUKE REALTY CORPORATION AND DUKE REALTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

owning entities) that lack substantive participating or kick out rights, guaranteed returns, protection against losses, or capping of residual returns within the group and (iii) establish whether activities within the venture are on behalf of an investor with disproportionately few voting rights in making this VIE determination.

To the extent that we own interests in a VIE and we (i) have the power to direct the activities that most significantly impact the economic performance of the VIE and (ii) have the obligation or rights to absorb losses or receive benefits that could potentially be significant to the VIE, then we would be determined to be the primary beneficiary and would consolidate the VIE. To the extent that we own interests in a VIE, then at each reporting period, we re-assess our conclusions as to which, if any, party within the VIE is considered the primary beneficiary. Consolidated joint ventures that are VIE's were not significant in any period presented in these consolidated financial statements.

To the extent that our joint ventures do not qualify as VIEs, they are consolidated if we control them through majority ownership interests or if we are the managing entity (general partner or managing member) and our partner does not have substantive participating rights. Control is further demonstrated by our ability to unilaterally make significant operating decisions, refinance debt and sell the assets of the joint venture without the consent of the non-managing entity and the inability of the non-managing entity to remove us from our role as the managing entity. Consolidated joint ventures that are not VIEs are not significant in any period presented in these consolidated financial statements.

We use the equity method of accounting for those joint ventures where we exercise significant influence but do not have control. Under the equity method of accounting, our investment in each joint venture is included on our balance sheet; however, the assets and liabilities of the joint ventures for which we use the equity method are not included on our balance sheet.

When we sell or contribute properties to unconsolidated joint ventures and retain a non-controlling ownership interest in such assets, we recognize the difference between the consideration received and the carrying amount of the asset sold or contributed when its derecognition criteria are met. The equity method investment we retain in such partial sale transactions is noncash consideration and is measured at fair value. As a result, the accounting for a partial sale results in the recognition of a full gain or loss.

When circumstances indicate there may have been a reduction in the value of an equity investment, we evaluate whether the loss in value is other than temporary. If we conclude it is other than temporary, we recognize an impairment charge to reflect the equity investment at fair value.

In July 2021, we entered into a 20%-owned unconsolidated joint venture with CBRE Global Investors ("CBREGI") with plans to contribute three tranches of properties. We contributed two separate tranches of properties to the joint venture during 2021 (see Note 5) while the third tranche was closed in January 2022 (see Note 14). The joint venture financed the acquisition of these properties with a combination of third party first mortgage loans and equity contributions from our partner in this joint venture.

There were no unconsolidated joint ventures, in which we have any recognized assets or liabilities or have retained any economic exposure to loss at December 31, 2021 that met the criteria to be considered VIEs. At December 31, 2021, we guaranteed the repayment of a loan associated with one of our unconsolidated joint ventures. The maximum guarantee exposure for the loan was approximately $4.8 million.

Cash Equivalents

Investments with an original maturity of three months or less are classified as cash equivalents.

Valuation of Receivables

Our determination of the adequacy of our allowances for tenant receivables includes a binary assessment of whether or not the amounts due under a tenant’s lease agreement are probable of collection. For such amounts that are deemed probable of collection, revenue continues to be recorded on a straight-line basis over the lease term. For such amounts that are deemed not probable of collection, revenue is recorded as the lesser of (i) the amount which would be recognized on a straight-line basis or (ii) cash that has been received from the tenant, with any tenant and

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deferred rent receivable balances charged as a direct write-off against rental income in the period of the change in the collectability determination.

Deferred Costs

Deferred Financing Costs

Costs incurred in connection with obtaining financing are deferred and are amortized to interest expense over the term of the related loan. The costs for issuing debt, other than lines of credit, are presented on the consolidated balance sheets as a direct deduction from the debt's carrying value, while debt issuance costs related to the Partnership's unsecured line of credit are presented as assets on the consolidated balance sheets, as part of other escrow deposits and other assets.

Lease Related Costs and Acquired Lease-Related Intangible Assets

Costs that are directly incremental to executing a lease are capitalized.

Acquired lease-related intangible assets consist of above market lease assets and the value allocable to in-place leases. Above market lease assets are amortized as a reduction to rental income over the remaining terms of the respective leases. In-place lease intangible assets are amortized on a straight-line basis and included within depreciation and amortization in the consolidated statements of operations and comprehensive income.

Deferred leasing costs and acquired lease-related intangible assets at December 31, 2021 and 2020, excluding amounts classified as held-for-sale, were as follows (in thousands):

			2021						2020
Deferred leasing costs			$	376,597					$	359,646
Acquired lease-related intangible assets			171,314						174,241
			$	547,911					$	533,887
Accumulated amortization - deferred leasing costs			$	(122,789)					$	(120,756)
Accumulated amortization - acquired lease-related intangible assets			(87,186)						(83,366)
Total			$	337,936					$	329,765

Amounts recorded related to amortization expense for in-place leases for the years ended December 31, 2021, 2020 and 2019 totaled $20.4 million, $19.5 million and $22.0 million, respectively. Charges to rental income related to the amortization of above market lease assets for the years ended December 31, 2021, 2020 and 2019 totaled $367,000, $639,000 and $703,000, respectively.

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The expected future amortization, or charge to rental income, of acquired lease-related intangible assets is summarized in the table below (in thousands):

Year			Amortization Expense						Charge to Rental Income
2022			$	18,168					$	352
2023			15,271						353
2024			11,986						59
2025			9,789						—
2026			7,574						—
Thereafter			20,576						—
			$	83,364					$	764

Noncontrolling Interests

Noncontrolling interests relate to the minority ownership interests in the Partnership and interests in consolidated property partnerships that are not wholly owned by the General Partner or the Partnership. Noncontrolling interests are subsequently adjusted for additional contributions, distributions to noncontrolling holders and the noncontrolling holders' proportionate share of the net earnings or losses of each respective entity. We report noncontrolling interests as a component of total equity.

When a Common Unit of the Partnership is redeemed (Note 1), the change in ownership is treated as an equity transaction by the General Partner and there is no effect on its earnings or net assets.

Revenue Recognition

Rental and Related Revenue

Rental income from leases to customers is recognized on a straight-line basis. If a lease provides for tenant improvements, we determine whether we or the tenant is the owner of the tenant improvements. When we are the owner of the tenant improvements, any tenant improvements funded by the tenant are treated as lease payments which are deferred and amortized as revenue over the lease term. When the tenant is the owner of the tenant improvements, and we fund such improvements, we record such tenant improvement allowances as lease incentives and amortize as a reduction of revenue over the lease term.

We record lease termination fees when a tenant has executed a definitive termination agreement with us and the payment of the termination fee is not subject to any material conditions that must be met or waived before the fee is due to us.

General Contractor and Service Fee Revenue

General contractor and service fee revenues are comprised primarily of construction and development related revenues earned from third parties while acting in capacity of a developer, as a general contractor or a construction manager. We evaluate the goods and services provided in these construction arrangements to determine whether we are acting as principal or agent and, accordingly, recognize revenue on a gross or net basis based on that evaluation. There are other ancillary streams of revenue included in general contractor and service fee revenues (see Note 9), such as management fees earned from unconsolidated joint ventures in accordance with the terms specific to each arrangement, which are not significant.

Our construction arrangements are typically structured with only one performance obligation, which generally represents an obligation either to construct a new building or to construct fixtures in an existing building, and these single performance obligations are satisfied over time as construction progresses. We recognize revenue as we satisfy such performance obligations using the percentage of completion method, which is an input method. Using this method, profits are recorded based on our estimates of the percentage of completion of individual contracts, commencing when the work performed under the contracts reaches a point where the final costs can be estimated with reasonable accuracy. The percentage of completion estimates are based on a comparison of the contract expenditures incurred to the estimated final costs. We believe the percentage of completion method is a faithful

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depiction of the transfer of goods and services as changes in job performance and estimated profitability, which result in revisions to costs and income and are recognized in the period in which the revisions are determined, have not historically been significant. We typically receive regular progress payments on the majority of our construction arrangements and such arrangements generally have an original duration of less than one year. As the result of the relatively short duration of our construction arrangements, we apply the optional disclosure exemptions, related to our remaining performance obligations for our in-process construction projects, for which any future variable consideration is not material. Changes in job performance, job conditions and estimated profitability may result in revisions to costs and income and are recognized in the period in which the revisions are determined. To the extent that a fixed-price contract is estimated to result in a loss, the loss is recorded immediately.

Opening and closing balances of construction receivables are presented separately on the Consolidated Balance Sheets. Under billed and over billed receivables on construction contracts totaled $45.8 million and $1.9 million, respectively, at December 31, 2021 and $16.6 million and $105,000, respectively, at December 31, 2020. Over billed receivables are included in other liabilities in the Consolidated Balance Sheets. We generally do not have any contract assets associated with our construction arrangements.

Management fees are based on a percentage of rental receipts of properties managed and are recognized as the rental receipts are collected. Maintenance fees are based upon established hourly rates and are recognized as the services are performed.

Property Sales

Only disposals representing a strategic shift in operations (for example, a disposal of a major geographic area or a major line of business) should be presented as discontinued operations in accordance with ASC 205-20, without consideration of significant continuing involvement.

We recognize gains on sales of properties, including partial sales, of non-financial assets (and in-substance non-financial assets) when the recognition criteria are met. In the typical course of our business, sales of non-financial assets represent only one performance obligation and are recognized when an enforceable contract is in place, collectability is ensured and control is transferred to the buyer.

Leases

As a lessor, our primary business is the development, acquisition, and operation of industrial real estate properties that are held for investment and leased to tenants. We manage residual risk through investing in properties that we believe will appreciate in value over time. We also evaluate the collectability of the cash flows of our leases prior to their execution, and on an ongoing basis, to ensure collectability is probable prior to recognizing lease revenues on an accrual basis.

We only capitalize the incremental costs of signing a lease. Non-incremental costs attributable to successful leases, as presented in the Consolidated Statements of Operations, represent internal costs allocable to successful leasing activities and exclude estimated costs related to downtime and/or unsuccessful deals. These costs primarily consist of compensation and other benefits for internal leasing and legal personnel. These costs are not capitalizable "incremental costs" in the context of the applicable lease accounting rules, but we believe separate presentation on the Consolidated Statements of Operations provides useful information for purposes of comparability with economically similar success-based costs incurred by other organizations that outsource their leasing functions, which are generally capitalizable.

We exclude certain lessor costs, such as real estate taxes and insurance, that are paid directly by lessees to third parties, from rental revenue and the associated rental expense. Lessor costs that are paid by the lessor and reimbursed by the lessee continue to be recorded through rental revenue and the associated rental expense.

The applicable lease accounting rules allow a practical expedient for lessors to not separate rental recovery revenue related to lease-related services from the associated rental revenue related to the lease when certain criteria are met. The lease-related services provided to our tenants include property management, common area maintenance ("CAM") and utilities. We assessed the applicable criteria, concluding that the timing and straight-line pattern of

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

transfer to the lessees for rental recovery revenue from our lease-related services and revenue from the underlying leases are the same and that lease classification does not change, and we have consistently applied this practical expedient in all periods presented.

As a lessee, we apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase of the leased asset. This classification determines whether the lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. In the capacity of a lessee, we record a right-of-use ("ROU") asset and a lease liability for all leases with a term of greater than 12 months regardless of classification.

See Note 3 for further disclosure on our leases as a lessor and lessee.

Net Income Per Common Share or Common Unit

Basic net income per common share or Common Unit is computed by dividing net income attributable to common shareholders or common unitholders, less dividends or distributions on share-based awards expected to vest (referred to as "participating securities" and primarily composed of unvested restricted stock units), by the weighted average number of common shares or Common Units outstanding for the period.

Diluted net income per common share is computed by dividing the sum of net income attributable to common shareholders and the noncontrolling interest in earnings allocable to Limited Partner Units (to the extent the Limited Partner Units are dilutive), less dividends or distributions on participating securities that are anti-dilutive, by the sum of the weighted average number of common shares outstanding and, to the extent they are dilutive, weighted average number of Limited Partner Units outstanding and any potential dilutive securities for the period. Diluted net income per Common Unit is computed by dividing the net income attributable to common unitholders, less dividends or distributions on participating securities that are anti-dilutive, by the sum of the weighted average number of Common Units outstanding and any potential dilutive securities for the period.

The following table reconciles the components of basic and diluted net income per common share or Common Unit (in thousands): 

			2021						2020						2019
General Partner
Net income attributable to common shareholders			$	852,895					$	299,915					$	428,972
Less: Dividends on participating securities			(1,356)						(1,447)						(1,487)
Basic net income attributable to common shareholders			851,539						298,468						427,485
Add back dividends on dilutive participating securities			1,356						—						1,487
Noncontrolling interest in earnings of common unitholders			8,354						2,663						3,678
Diluted net income attributable to common shareholders			$	861,249					$	301,131					$	432,650
Weighted average number of common shares outstanding			377,673						370,057						362,234
Weighted average Limited Partner Units outstanding			3,708						3,303						3,118
Other potential dilutive shares			2,095						796						1,987
Weighted average number of common shares and potential dilutive securities			383,476						374,156						367,339
Partnership
Net income attributable to common unitholders			$	861,249					$	302,578					$	432,650
Less: Distributions on participating securities			(1,356)						(1,447)						(1,487)
Basic net income attributable to common unitholders			$	859,893					$	301,131					$	431,163
Add back distributions on dilutive participating securities			1,356						—						1,487
Diluted net income attributable to common unitholders			$	861,249					$	301,131					$	432,650
Weighted average number of Common Units outstanding			381,381						373,360						365,352
Other potential dilutive units			2,095						796						1,987
Weighted average number of Common Units and potential dilutive securities			383,476						374,156						367,339

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The following table summarizes the data that is excluded from the computation of net income per common share or Common Unit as a result of being anti-dilutive (in thousands):

			2021						2020						2019
General Partner and Partnership
Other potential dilutive shares or units:
Anti-dilutive outstanding potential shares or units under fixed stock option and other stock-based compensation plans			—						—						—
Anti-dilutive outstanding participating securities			—						1,621						—

Federal Income Taxes

General Partner

The General Partner has elected to be taxed as a REIT under the Code, as amended. To qualify as a REIT, the General Partner must meet a number of organizational and operational requirements, including a requirement to distribute at least 90% of its REIT taxable income to its shareholders. Management intends to continue to adhere to these requirements and to maintain the General Partner's REIT status. As a REIT, the General Partner is entitled to a tax deduction for the dividends it pays to shareholders. Accordingly, the General Partner generally will not be subject to federal income taxes as long as it currently distributes to shareholders an amount equal to or in excess of its taxable income. The General Partner is, however, generally subject to federal income taxes on any taxable income that is not currently distributed to its shareholders. If the General Partner fails to qualify as a REIT in any taxable year, it will be subject to federal income taxes and may not be able to qualify as a REIT for four subsequent taxable years.

REIT qualification reduces, but does not eliminate, the amount of state and local taxes we pay. In addition, our financial statements include the operations of taxable corporate subsidiaries that are not entitled to a dividends paid deduction and are subject to federal, state and local income taxes. As a REIT, the General Partner may also be subject to certain federal excise taxes if it engages in certain types of transactions.

The following table reconciles the General Partner's net income to taxable income before the dividends paid deduction, and subject to the 90% distribution requirement, for the years ended December 31, 2021, 2020 and 2019 (in thousands): 

			2021						2020						2019
Net income			$	861,618					$	302,760					$	432,644
Book/tax differences			(467,205)						63,838						(120,421)
Taxable income before the dividends paid deduction			394,413						366,598						312,223
Less: capital gains			(33,652)						(62,165)						(62,513)
Adjusted taxable income subject to the 90% distribution requirement			$	360,761					$	304,433					$	249,710

The General Partner's dividends paid deduction is summarized below (in thousands): 

			2021						2020						2019
Cash dividends paid			$	394,487					$	355,287					$	318,702
Cash dividends declared and paid in subsequent year that apply to current year			26,886						22,960						6,521
Cash dividends declared and paid in current year that apply to previous year			(22,960)						(6,521)						(9,286)
Dividends paid deduction			398,413						371,726						315,937
Less: Capital gain distributions			(33,652)						(62,165)						(62,513)
Dividends paid deduction attributable to adjusted taxable income subject to the 90% distribution requirement			$	364,761					$	309,561					$	253,424

Our tax return for the year ended December 31, 2021 has not been filed. The taxability information presented for our dividends paid in 2021 is based upon management’s estimate. Consequently, the taxability of dividends is subject to change. A summary of the designated tax characterization of the dividends paid by the General Partner for the years ended December 31, 2021, 2020 and 2019 is as follows:

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			2021						2020						2019
Common Shares
Ordinary income			91.5		%				74.6		%				80.7		%
Capital gains			8.5		%				25.4		%				19.3		%
			100.0		%				100.0		%				100.0		%

Partnership

For the Partnership, the allocated share of income and loss other than the operations of its taxable REIT subsidiary is included in the income tax returns of its partners; accordingly the only federal income taxes included in the accompanying consolidated financial statements of the Partnership are in connection with its taxable REIT subsidiary.

Income taxes are not material to our operating results or financial position. Our taxable REIT subsidiary has no significant net deferred income tax positions or unrecognized tax benefit items.

Cash Paid for Income Taxes

We paid federal, state and local income taxes, net of income tax refunds, of $22.2 million and $7.8 million in 2021 and 2019, respectively. We received income tax refunds, net of federal, state and local income tax payments, of $308,000 in 2020.

Fair Value Measurements

We estimate fair value using available market information and valuation methodologies. Assets and liabilities recorded at fair value on the consolidated balance sheets are categorized based on the inputs to the valuation techniques as follows:

Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities to which we have access.

Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates and yield curves that are observable at commonly quoted intervals.

Level 3 inputs are unobservable inputs for the asset or liability, which are typically based on an entity's own assumptions, as there is little, if any, related market activity.

In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.

Derivative Financial Instruments

We periodically enter into certain interest rate protection agreements to effectively convert or cap floating rate debt to a fixed rate, and to hedge anticipated future financing transactions, both of which qualify for cash flow hedge accounting treatment. We do not utilize derivative financial instruments for trading or speculative purposes. The entire effect of any hedging instruments and hedged items are presented in the same income statement line item.

If a derivative qualifies as a cash flow hedge, the gain or loss on the derivative is recorded in accumulated other comprehensive income or loss and subsequently reclassified into interest expense in the same period during which the hedged forecasted transaction affects earnings. For all hedging relationships, we formally document the hedging relationship and its risk-management objective and strategy for undertaking the hedge, the hedging instrument, the hedged item, the nature of the risk being hedged and how the hedging instrument’s effectiveness in offsetting the hedged risk will be assessed prospectively and retrospectively.

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Use of Estimates

The preparation of the financial statements requires management to make a number of estimates and assumptions that affect the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates.

(3)Leases

Lease Income

Our leases generally include scheduled rent increases, but do not include variable payments based on indexes. Our rental revenue is primarily based on fixed, non-cancelable leases. Our variable rental revenue primarily consists of amounts recovered from lessees for property tax, insurance and CAM.

All revenues related to lease and lease-related services are included in, and comprise substantially all of, the caption "Rental and Related Revenue" on the Consolidated Statements of Operations and Comprehensive Income. The components of Rental and Related Revenue are as follows (in thousands):

			Twelve Months Ended December 31,
			2021						2020						2019
Rental revenue - fixed payments			$	764,574					$	692,753					$	645,759
Rental revenue - variable payments (1)			261,089						236,441						210,074
Rental and related revenue			$	1,025,663					$	929,194					$	855,833

(1) Primarily includes tenant recoveries for real estate taxes, insurance and CAM.

The future minimum rents due to us under non-cancelable operating leases are as follows (in thousands):

Year			December 31, 2021
2022			$	784,537
2023			769,715
2024			705,620
2025			630,618
2026			546,431
Thereafter			2,299,185
			$	5,736,106

Lessee Accounting

As of December 31, 2021, our lease arrangements, where we are the lessee, primarily consisted of office and ground leases. For these lease arrangements, we recognized ROU assets and the corresponding lease liabilities representing the discounted value of future lease payments required. In determining these amounts, we elected an available practical expedient that allows us, as a lessee, to not separate lease and non-lease components. Expenses recognized on these leases for the year ended December 31, 2021 were not material.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Our operating leases primarily include all of our office leases and two ground leases. As of December 31, 2021, a $36.8 million ROU asset associated with operating leases was included within Other Escrow Deposits and Other Assets and a corresponding lease liability of $41.4 million was included in Other Liabilities on our Consolidated Balance Sheets. As of December 31, 2020, total ROU assets and liabilities for operating leases were $38.9 million and $42.9 million, respectively. The following table summarizes the future lease payments (in thousands) to be made under non-cancellable operating lease arrangements:

Year			December 31, 2021
2022			$	4,617
2023			4,327
2024			3,433
2025			1,759
2026			1,644
Thereafter			81,487
Total undiscounted operating lease payments			$	97,267
Less: imputed interest			55,904
Present value of operating lease payments			$	41,363

The weighted average remaining lease term for our operating lease arrangements, on a combined basis as of December 31, 2021, was 34.3 years. The weighted average discount rate for our operating lease arrangements as of December 31, 2021 was 4.42%. As the discount rates implied in our operating lease arrangements were not readily determinable, we utilized our current credit ratings and credit yields observed from market traded securities with similar credit ratings to form a reasonable basis to establish secured borrowing rates when determining the present value of future operating lease payments.

Our finance leases include two long term ground leases. As of December 31, 2021, a $37.5 million ROU asset associated with finance leases was included within Other Escrow Deposits and Other Assets and a corresponding $39.2 million lease liability was included within Other Liabilities on our Consolidated Balance Sheets. As of December 31, 2020, total finance lease related ROU assets and liabilities were $19.2 million and $19.4 million, respectively. The future lease payments (in thousands) under our finance leases as of December 31, 2021 for five years and thereafter are as follows:

Year			December 31, 2021
2022			$	1,414
2023			1,714
2024			1,731
2025			1,762
2026			1,787
Thereafter			127,532
Total undiscounted finance lease payments			$	135,940
Less: imputed interest			96,746
Present value of finance lease payments			$	39,194

The ground lease payment obligation for one ground lease is subject to an annual consumer price index increase limited within a minimum 2% and a maximum 3% increase. The contractual obligations for both leases included above assume the minimum annual increase for the remainder of the lease term since we cannot predict future adjustments. The weighted average remaining lease term for our finance lease arrangements, on a combined basis as of December 31, 2021 was 54.2 years. The weighted average discount rate for our finance lease arrangements as of December 31, 2021 was 5.12%. The lessors' implicit rates in the leases were readily determinable when the leases were commenced.

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(4)Restricted Cash

Restricted cash primarily consists of cash proceeds from dispositions but restricted only for qualifying like-kind exchange transactions and cash held in escrow related to acquisition and disposition holdbacks. The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the Consolidated Balance Sheets that sum to the total of the same such amounts shown in the Consolidated Statements of Cash Flows (in thousands):

			December 31, 2021						December 31, 2020
Cash and cash equivalents			$	69,752					$	6,309
Restricted cash held in escrow for like-kind exchange			—						47,682
Restricted cash included in other escrow deposits and other assets			33,412						13,232
Total cash, cash equivalents, and restricted cash shown in the Consolidated Statements of Cash Flows			$	103,164					$	67,223

Restricted cash held in escrow for like-kind exchange on the Consolidated Balance Sheets consists of cash received from property dispositions intended to be used for qualifying like-kind exchange transactions.

(5)Acquisitions and Dispositions

Acquisitions and dispositions for the periods presented were completed in accordance with our strategy to reposition our investment concentration among the markets in which we operate and to increase our overall investment concentration in Coastal Tier 1 markets. Transaction costs related to asset acquisitions are capitalized.

Acquisitions

The following table summarizes our real estate acquisition activities for the years ended December 31 (dollars in thousands):

			2021						2020						2019
Buildings:
Number of buildings			8						10						6
Cash paid at time of acquisition			$	447,584					$	383,672					$	210,224
Land and other real estate assets:
Acres of land			536						250						517
Cash paid at time of acquisition (1)			$	700,632					$	248,413					$	388,202

(1) Includes the cash acquisition cost of other real estate investments totaling $163.7 million, $13.1 million and $160.4 million for the years ended December 31, 2021, 2020 and 2019, respectively. See Note 7 for information on other real estate investments.

During 2021, we acquired a container storage lot in Northern New Jersey for a combination of $64.0 million of cash and Limited Partner Units with a fair value of $11.6 million. This income producing acquisition is included as part of land and other real estate assets above and also included in the table below.

The following table summarizes amounts recognized for each major class of assets and liabilities (in thousands) for acquisitions of income producing properties during the years ended December 31:

			2021						2020						2019
Real estate assets			$	570,820					$	410,481					$	205,390
Lease related intangible assets			11,796						14,460						11,716
Total acquired assets			$	582,616					$	424,941					$	217,106
Secured debt			—						25,455						—
Below market lease liabilities			57,441						14,124						—

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The leases in the acquired properties had a weighted average remaining life at acquisition of approximately 11.0 years, 6.4 years and 6.5 years during 2021, 2020 and 2019, respectively.

Distribution of Joint Venture Properties

As part of a plan of dissolution, we received a non-cash distribution of real estate assets from two 50%-owned unconsolidated joint ventures. These joint ventures distributed their ownership in two in-service properties and certain parcels of undeveloped land to our partner, who shares control with us over both joint ventures, while distributing their ownership interest in an in-service property, a property under construction and a parcel of undeveloped land to us. These distributions were based on values negotiated between us and our partner on an arms-length basis and we determined that these negotiated values represented the fair value of the assets at their highest and best use, as determined from the perspective of a market participant. Concurrent with these asset distributions, both we and our partner assumed and repaid all of the joint ventures' unsecured debt, with each party paying off an amount necessary for the value of the assets distributed, net of debt repayments, to be equal.

As the result of this dissolution transaction, we recognized a gain of $10.6 million (included in equity in earnings in the Consolidated Statements of Operations), which was related to the properties distributed to our partner. We did not recognize a gain to remeasure our existing ownership interest in the assets we received in distribution and we recognized such assets at a combined basis of $52.2 million in the Consolidated Balance Sheets (not included in the 2021 Acquisitions table above). We assumed and immediately repaid unsecured debt of the joint ventures totaling $40.2 million.

Fair Value Measurements

We determine the fair value of the individual components of income producing real estate asset acquisitions primarily through calculating the "as-if vacant" value of a building, using an income approach, which relies significantly upon internally determined assumptions. We have determined that these estimates primarily rely on Level 3 inputs, which are unobservable inputs based on our own assumptions. The most significant assumptions used in calculating the "as-if vacant" value for acquisition activity during 2021 and 2020, respectively, are as follows:

			2021									2020
			Low			High						Low			High
Exit capitalization rate			3.50%			5.00%						3.98%			5.46%
Annual net rental rate per square foot on acquired buildings			$6.62			$17.16						$5.28			$18.11
Annual net rental rate per acre on acquired ground lease			$182,136			$182,136						$—			$—

The estimate of the portion of the "as-if vacant" value that is allocated to the land underlying the acquired real estate relies on Level 3 inputs and is primarily determined by reference to recent comparable transactions.

Capitalized acquisition costs were insignificant and the fair value of net assets acquired from unrelated parties during the year ended December 31, 2021 was substantially the same as the cost of acquisition.

Dispositions

Dispositions of buildings (see Note 7 for the number of buildings sold in each year) and undeveloped land generated net cash proceeds of $1.07 billion, $336.3 million and $432.7 million in 2021, 2020 and 2019, respectively.

On July 22, 2021, we closed on the sale of 14 wholly-owned buildings and 15 acres of undeveloped land, for net cash proceeds of $286.3 million, which completed our previously announced exit from the St. Louis market. This sale did not represent a strategic shift in operations.

In addition, in July 2021 we entered into a 20%-owned unconsolidated joint venture with plans to contribute three tranches of properties for a total of nine properties. Pursuant to the terms of the joint venture, on July 27, 2021, we contributed to the joint venture the first tranche of three properties, which consisted of two buildings and one trailer storage lot in Chicago and Atlanta, for net cash proceeds of $115.7 million. On September 21, 2021, we contributed

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the second tranche of three properties, which consisted of two buildings and one trailer storage lot in Baltimore, to the joint venture for net cash proceeds of $172.9 million. The joint venture financed the acquisition of these properties with a combination of third party first mortgage loans and equity contributions from our partner. we received $41.1 million for our ownership share of proceeds from such third party first mortgage loans, which was included in capital distributions from unconsolidated joint ventures in the Consolidated Statements of Cash Flows for the year ended December 31, 2021. We closed on the contribution of the third tranche in January 2022 (see Note 14).

During 2020, we collected the remaining $110.0 million of principal on our outstanding notes receivable, which was related to the sale of our medical office portfolio during 2017.

In September 2019, we completed the sale of 18 non-strategic industrial properties for $217.5 million in proceeds and recorded a gain on sale of $146.3 million. These properties totaled 4.1 million square feet and were located in primarily Midwest markets.

All other dispositions were not individually material.

(6)Investments in Unconsolidated Joint Ventures

Summarized Financial Information

As of December 31, 2021, we had equity interests in nine unconsolidated joint ventures that primarily own and operate rental properties.

Combined summarized financial information for the unconsolidated joint ventures at December 31, 2021 and 2020, and for the years ended December 31, 2021, 2020 and 2019, are as follows (in thousands):

			2021						2020						2019
Rental revenue			$	67,142					$	57,952					$	59,905
Gains on land and property sales - continuing operations			$	64,480					$	2,076					$	24,099
Net income			$	85,323					$	19,183					$	40,134
Equity in earnings of unconsolidated joint ventures			$	32,804					$	11,944					$	31,406
Land, buildings and tenant improvements, net			$	625,206					$	321,803
Construction in progress			31,745						23,507
Undeveloped land			3,326						23,653
Other assets			106,521						79,842
			$	766,798					$	448,805
Indebtedness			$	286,430					$	155,539
Other liabilities			45,580						31,946
			332,010						187,485
Owners' equity			434,788						261,320
			$	766,798					$	448,805
Investments in and advances to unconsolidated joint ventures (1)			$	168,336					$	131,898

(1) Differences between the net investment in our unconsolidated joint ventures and our underlying equity in the net assets of the ventures are primarily a result of basis differences associated with the sales of properties to joint ventures in which we retained an ownership interest. These adjustments have resulted in an aggregate difference increasing our investments in unconsolidated joint ventures by $3.8 million and $2.7 million as of December 31, 2021 and 2020, respectively. Differences between historical cost basis and the basis reflected at the joint venture level (other than loans and impairments) are typically depreciated over the life of the related asset.

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The scheduled principal payments of long term debt for the unconsolidated joint ventures, at our ratable ownership percentage, for each of the next five years and thereafter as of December 31, 2021 are as follows (in thousands):

Year			Future Repayments
2022			$	121
2023			126
2024			2,525
2025			30,885
2026			47,341
Thereafter			—
			$	80,998

During 2021, a 20% owned joint venture partially financed acquisitions of properties from us with third party mortgage loans and our proportional share of such borrowings was $41.5 million with maturity dates in 2026 (see Note 5). In January 2022, this unconsolidated joint venture financed an additional acquisition of assets from us with $34.0 million, at our proportional share, of third party mortgage loans that mature in 2025 (see Note 14).

(7)Real Estate Assets, Discontinued Operations and Assets Held-for-Sale

Real Estate Assets

Real estate assets, excluding assets held-for-sale, consisted of the following (in thousands):

			December 31, 2021						December 31, 2020
Buildings and tenant improvements			$	6,007,848					$	5,812,004
Land and improvements			3,435,591						2,883,674
Other real estate investments (1)			172,637						49,477
Real estate assets			$	9,616,076					$	8,745,155

(1) Includes underutilized in-fill sites, which may have had buildings/structures on site when we acquired them, that are either (i) under lease to a third party and, after the lease ends, are expected to be redeveloped or will require significant capital expenditures before re-leasing; or (ii) industrial/logistics properties that we intend to re-lease after significant retrofitting and/or environmental remediation is completed. The leases on these assets are usually short term in nature.

Allocation of Noncontrolling Interests - General Partner

The following table illustrates the General Partner's share of the income attributable to common shareholders from continuing operations and discontinued operations, reduced by the allocation of income between continuing and discontinued operations to noncontrolling interests, for the years ended December 31, 2021, 2020 and 2019, respectively (in thousands):

			2021						2020						2019
Income from continuing operations attributable to common shareholders			$	852,895					$	299,805					$	428,531
Income from discontinued operations attributable to common shareholders			—						110						441
Net income attributable to common shareholders			$	852,895					$	299,915					$	428,972

Allocation of Noncontrolling Interests - Partnership

Substantially all of the income from discontinued operations for all periods presented in the Partnership's Consolidated Statements of Operations and Comprehensive Income is attributable to the common unitholders.

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Assets Sold or Held-for-Sale

The following table illustrates the number of sold or held-for-sale properties:

									Held-for-Sale at December 31, 2021						Sold in 2021						Sold in 2020						Sold in 2019						Total
Properties sold or classified as held-for-sale									3						30						7						28						68

These held-for-sale properties were wholly-owned and leased by our largest tenant, which was the third tranche of assets to be contributed to a 20% owned unconsolidated joint venture (see Note 5). The contribution was closed in January 2022 (see Note 14).

At December 31, 2021, three in-service properties were classified as held-for-sale, but did not meet the criteria to be classified within discontinued operations. The following table illustrates aggregate balance sheet information for properties held-for-sale (in thousands):

			Held-for-Sale Properties Included in Continuing Operations
			December 31, 2021						December 31, 2020
Land and improvements			$	67,818											$	27,954
Buildings and tenant improvements			102,867												44,800
Accumulated depreciation			(36,785)												(5,976)
Deferred leasing and other costs, net			5,392												936
Other assets			5,359												232
Total assets held-for-sale			$	144,651											$	67,946
Accrued expenses			$	43											$	660
Other liabilities			6,235												7,080
Total liabilities held-for-sale			$	6,278											$	7,740

(8)Indebtedness

All debt is issued directly or indirectly by the Partnership. The General Partner does not have any indebtedness, but does guarantee some of the unsecured debt of the Partnership.

Indebtedness at December 31, 2021 and 2020 consists of the following (in thousands):

			Maturity Date						Weighted Average Interest Rate						Weighted Average Interest Rate
									2021						2020						2021						2020
Fixed rate secured debt			2025 to 2035						4.51		%				4.56		%				$	58,422					$	62,817
Variable rate secured debt			2025						0.12		%				0.08		%				1,300						1,600
Unsecured debt			2024 to 2050						3.00		%				3.35		%				3,675,000						3,058,740
Unsecured line of credit			2026						—		%				1.03		%				—						295,000
																					$	3,734,722					$	3,418,157
Less: Deferred financing costs																					45,440						33,106
Total indebtedness as reported on consolidated balance sheets																					$	3,689,282					$	3,385,051

Secured Debt

At December 31, 2021, our secured debt was collateralized by rental properties with a carrying value of $158.9 million and by a letter of credit in the amount of $1.3 million.

The fair value of our fixed rate secured debt at December 31, 2021 was $60.0 million. Because our fixed rate secured debt is not actively traded in any marketplace, we utilized a discounted cash flow methodology to determine

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its fair value. Accordingly, we calculated fair value by applying an estimate of the current market rate to discount the debt's remaining contractual cash flows. Our estimate of a current market rate, which is the most significant input in the discounted cash flow calculation, is intended to replicate debt of similar maturity and loan-to-value relationship. The estimated market rates for all of our current fixed rate secured debt are between 2.40% and 2.90%, depending on the attributes of the specific loans. The current market rates we utilized were internally estimated; therefore, we have concluded that our determination of fair value for our fixed rate secured debt was primarily based upon Level 3 inputs.

In February 2020, a consolidated joint venture obtained an $18.4 million secured loan from a third party financial institution, with a fixed annual interest rate of 3.41% and a maturity date of March 1, 2035.

In September 2020, we assumed two secured loans in conjunction with a two-building asset acquisition. These assumed loans had a total face value of $21.5 million and fair value of $25.5 million. These assumed loans had a weighted average remaining term at acquisition of 11.8 years and carried a weighted average stated interest rate of 4.54%. The difference between the fair value and the face value of loans assumed in connection with the acquisition is recorded as a premium and amortized to interest expense over the life of the loans assumed. We used an estimated market interest rate of 2.50% in determining the fair values of these loans.

During 2020, we repaid one fixed rate secured loan, totaling $9.0 million, which had a stated interest rate of 5.61%.

Unsecured Debt

At December 31, 2021, all of our unsecured debt bore interest at fixed rates and primarily consisted of unsecured notes that are publicly traded. We utilized broker estimates in estimating the fair value of our fixed rate unsecured debt. The broker estimates took into account any recent trades within the same series of our fixed rate unsecured debt, comparisons to recent trades of other series of our fixed rate unsecured debt, trades of fixed rate unsecured debt from companies with profiles similar to ours, as well as overall economic conditions. We reviewed these broker estimates for reasonableness and accuracy, considering whether the estimates were based upon market participant assumptions within the principal and most advantageous market and whether any other observable inputs would be more accurate indicators of fair value than the broker estimates. We concluded that the broker estimates were representative of fair value. We have determined that our estimation of the fair value of our fixed rate unsecured debt was primarily based upon Level 3 inputs. The estimated trading values of our fixed rate unsecured debt, depending on the maturity and coupon rates, ranged from 95.00% to 125.00% of face value.

The indentures (and related supplemental indentures) governing our outstanding series of unsecured notes also require us to comply with financial ratios and other covenants regarding our operations. We were in compliance with all such financial covenants at December 31, 2021.

We took the following actions during 2021 and 2020 as they pertain to our unsecured indebtedness:

•In November 2021, the Partnership issued $500.0 million of senior unsecured notes that bear a stated interest rate of 2.25%, have an effective interest rate of 2.38% and mature on January 15, 2032. Proceeds from this unsecured notes offering will be allocated to finance or refinance eligible green projects.

•In August 2021, we redeemed $250.0 million of 3.63% senior unsecured notes due April 2023. We recognized a loss of $13.9 million in connection with the redemption of these notes including the prepayment premium and write-off of unamortized deferred financing costs.

•In June 2021, we redeemed $83.7 million of 3.88% senior unsecured notes due October 2022. In connection with the early repayment of these notes, we recognized a loss of $3.9 million, including the prepayment premium and the write-off of unamortized deferred financing costs.

•In January 2021, the Partnership issued $450.0 million of senior unsecured notes that bear a stated interest rate of 1.75%, have an effective interest rate of 1.83%, and mature on February 1, 2031. Proceeds from the unsecured notes offering were allocated to finance or refinance eligible green projects. In addition, in January 2021, the Partnership assumed and immediately repaid $40.2 million of unsecured debt related to the assets received as part of the dissolution of unconsolidated joint ventures (see Note 5).

•In June 2020, we issued $350.0 million of senior unsecured notes, which bear interest at a stated interest rate of 1.75%, have an effective interest rate of 1.85% and mature on July 1, 2030. Proceeds from the unsecured notes offering were primarily used to repurchase and cancel $216.3 million of 3.88% senior

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unsecured notes due 2022 pursuant to a tender offer completed by the Partnership in June 2020. In connection with the early cancellation of these notes, we recognized a loss of $15.1 million consisting of a repayment premium and the write-off of unamortized deferred financing costs.

•In February 2020, we issued $325.0 million of senior unsecured notes that bear interest at a stated interest rate of 3.05%, have an effective interest rate of 3.19%, and mature on March 1, 2050. Proceeds from the unsecured notes offering were primarily used to repay the $300.0 million of senior unsecured notes bearing a stated interest rate of 4.38% due 2022. In connection with the early redemption of these notes, we recognized a loss of $17.8 million consisting of a prepayment premium and the write-off of unamortized deferred financing costs.

Unsecured Line of Credit

Our unsecured line of credit at December 31, 2021 is described as follows (in thousands):

 

Outstanding Balance at

Description

Borrowing Capacity

Maturity Date

December 31, 2021

Unsecured Line of Credit – Partnership

$

1,200,000

March 31, 2025

$

—

In March 2021, the Partnership amended and restated its existing $1.20 billion unsecured line of credit, which was set to mature in January 2022 with with options to extend until January 30, 2023. The amended and restated line of credit bears interest at one-month LIBOR plus 0.775% with a reduction in borrowing costs if certain sustainability linked metrics are achieved each year. In addition, the amended and restated line of credit matures on March 31, 2025 with options to extend until March 31, 2026. Subject to certain conditions, the terms also include an option to increase the facility by up to an additional $800.0 million, for a total of up to $2.00 billion. This line of credit provides us with an option to obtain borrowings from financial institutions that participate in the line at rates that may be lower than the stated interest rate, subject to certain restrictions. The line of credit also allows automatic transition to an alternative rate of interest in the event that the one-month LIBOR ceases to publish and needs to be replaced. As a result of amending and restating the unsecured line of credit, we incurred $6.2 million of deferred financing costs through December 31, 2021.

This line of credit contains financial covenants that require us to meet certain financial ratios and defined levels of performance, including those related to fixed charge coverage, unsecured interest expense coverage and debt-to-asset value (with asset value being defined in the Partnership's unsecured line of credit agreement). At December 31, 2021, we were in compliance with all financial covenants under this line of credit.

We utilized a discounted cash flow methodology in order to estimate the fair value of outstanding borrowings on our unsecured line of credit. To the extent that credit spreads have changed since the origination of the line of credit, the net present value of the difference between future contractual interest payments and future interest payments based on our estimate of a current market rate would represent the difference between the book value and the fair value. This estimate of a current market rate is based upon the rate, considering current market conditions and our specific credit profile, at which we estimate we could obtain similar borrowings. As our credit spreads have not changed appreciably, we believe that the contractual interest rate and the current market rate on any outstanding borrowings on the line of credit are the same. The current market rate is internally estimated and therefore is primarily based upon a Level 3 input.

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Changes in Fair Value

As all of our fair value debt disclosures relied primarily on Level 3 inputs, the following table summarizes the book value and changes in the fair value of our debt for the year ended December 31, 2021 (in thousands): 

			Book Value at 12/31/2020						Book Value at 12/31/2021						Fair Value at 12/31/2020						Issuances and Assumptions						Payments/Payoffs						Adjustments to Fair Value						Fair Value at 12/31/2021
Fixed rate secured debt			$	62,817					$	58,422					$	65,848					$	—					$	(4,113)					$	(1,746)					$	59,989
Variable rate secured debt			1,600						1,300						1,600						—						(300)						—						1,300
Unsecured debt			3,058,740						3,675,000						3,387,913						990,226						(373,966)						(224,708)						3,779,465
Unsecured line of credit			295,000						—						295,000						—						(295,000)						—						—
Total			$	3,418,157					$	3,734,722					$	3,750,361					$	990,226					$	(673,379)					$	(226,454)					$	3,840,754
Less: Deferred financing costs			33,106						45,440
Total indebtedness as reported on the consolidated balance sheets			$	3,385,051					$	3,689,282

Scheduled Maturities and Interest Paid

At December 31, 2021, the scheduled amortization and maturities of all indebtedness, excluding fair value adjustment, for the next five years and thereafter were as follows (in thousands):

Year			Amount
2022			$	4,646
2023			4,893
2024			305,155
2025			5,102
2026			378,238
Thereafter			3,033,158
			$	3,731,192

The amount of interest paid in 2021, 2020 and 2019 was $107.9 million, $104.6 million and $111.8 million, respectively. The amount of interest capitalized in 2021, 2020 and 2019 was $35.0 million, $24.3 million and $26.5 million, respectively.

(9)Segment Reporting

Reportable Segments

As of December 31, 2021, we had two reportable operating segments, the first consisting of the ownership and rental of industrial real estate investments. We continue to increase our investments in quality industrial properties largely based on anticipated geographic trends in supply and demand for industrial buildings, as well as the real estate needs of our major tenants that operate on a national level. We treat our industrial properties as a single operating and reportable segment based on our method of internal reporting. Properties not included in this reportable segment, because they are not industrial properties and do not by themselves meet the quantitative thresholds for separate presentation as a reportable segment, are generally referred to as non-reportable Rental Operations. Our non-reportable Rental Operations primarily include our remaining office properties and medical office property at December 31, 2021. The operations of our industrial properties, as well as our non-reportable Rental Operations, are collectively referred to as "Rental Operations."

Our second reportable segment consists of various real estate services such as development, general contracting, construction management, property management, asset management, maintenance and leasing to third-party property customers, owners and joint ventures, and is collectively referred to as "Service Operations." The Service Operations segment is identified as one single operating segment because the lowest level of financial results reviewed by our chief operating decision maker are the results for the Service Operations segment in total.  Further,

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our reportable segments are managed separately because each segment requires different operating strategies and management expertise.

Revenues by Reportable Segment

The following table shows the revenues for each of the reportable segments, as well as a reconciliation to consolidated revenues, for the years ended December 31, 2021, 2020 and 2019 (in thousands):

			2021						2020						2019
Revenues
Rental Operations:
Industrial			$	1,019,342					$	921,612					$	848,806
Non-reportable Rental Operations			5,506						5,995						5,794
Service Operations			80,260						64,004						117,926
Total segment revenues			1,105,108						991,611						972,526
Other revenue			815						1,587						1,233
Consolidated revenue			$	1,105,923					$	993,198					$	973,759

Major Customer

The table below shows the revenues from a major customer from each of our reportable segments (in thousands):

			Twelve Months Ended December 31,
			2021						2020						2019
Revenues
Rental Operations - Industrial			$	91,495					$	92,986					$	63,805
Service Operations			30,315						32,771						45,177

We generated more than 10% of our total revenues from this customer for the year ended December 31, 2021. Revenues from Rental Operations related to leasing properties to this customer. Revenues from Service Operations for this customer pertained primarily to general contractor and fee based construction management services.

Supplemental Performance Measure

PNOI is the non-GAAP supplemental performance measure that we use to evaluate the performance of, and to allocate resources among, the real estate investments in the reportable and operating segments that comprise our Rental Operations. PNOI for our Rental Operations segments is comprised of rental revenues from continuing operations less rental expenses and real estate taxes from continuing operations, along with certain other adjusting items (collectively referred to as "Rental Operations revenues and expenses excluded from PNOI," as shown in the following table). Additionally, we do not allocate interest expense, depreciation expense and certain other non-property specific revenues and expenses (collectively referred to as "Non-Segment Items," as shown in the following table) to our individual operating segments.

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We evaluate the performance of our Service Operations reportable segment using net income or loss, as allocated to that segment ("Earnings from Service Operations").The following table shows a reconciliation of our segment-level measures of profitability to consolidated income from continuing operations before income taxes, for the years ended December 31, 2021, 2020 and 2019 (in thousands and excluding discontinued operations):

						2021						2020						2019
PNOI
Industrial						$	706,956					$	611,217					$	550,399
Non-reportable Rental Operations						5,227						5,020						3,811
PNOI, excluding all sold properties						712,183						616,237						554,210
PNOI from sold properties included in continuing operations						24,834						49,574						63,911
PNOI, continuing operations						737,017						665,811						618,121
Earnings from Service Operations						12,142						6,028						6,360
Rental Operations revenues and expenses excluded from PNOI:
Straight-line rental income and expense, net						32,081						25,865						21,197
Revenues related to lease buyouts						323						2,863						1,611
Amortization of lease concessions and above and below market rents						12,368						8,984						7,802
Intercompany rents and other adjusting items						(2,704)						(1,473)						1,012
Non-Segment Items:
Equity in earnings of unconsolidated joint ventures						32,804						11,944						31,406
Interest expense						(84,843)						(93,442)						(89,756)
Depreciation and amortization expense						(362,148)						(353,013)						(327,223)
Gain on sale of properties						585,685						127,700						234,653
Impairment charges						—						(5,626)						—
Interest and other income, net						4,451						1,721						9,941
General and administrative expenses						(69,554)						(62,404)						(60,889)
Gain on land sales						12,917						10,458						7,445
Other operating expenses						(3,607)						(8,209)						(5,318)
Loss on extinguishment of debt						(17,901)						(32,900)						(6,320)
Gain on involuntary conversion						3,222						4,312						2,259
Non-incremental costs related to successful leases						(13,302)						(12,292)						(12,402)
Other non-segment revenues and expenses, net						1,216						1,210						986
Income from continuing operations before income taxes						$	880,167					$	297,537					$	440,885

The most comparable GAAP measure to PNOI is income from continuing operations before income taxes. PNOI excludes expenses that materially impact our overall results of operations and, therefore, should not be considered as a substitute for income from continuing operations before income taxes or any other measures derived in accordance with GAAP. Furthermore, PNOI may not be comparable to other similarly titled measures of other companies.

Assets by Reportable Segment

 The assets for each of the reportable segments at December 31, 2021 and 2020 were as follows (in thousands):

			December 31, 2021						December 31, 2020
Assets
Rental Operations:
Industrial			$	9,887,635					$	8,709,960
Non-reportable Rental Operations			33,702						35,292
Service Operations			182,979						160,194
Total segment assets			10,104,316						8,905,446
Non-segment assets			341,339						205,948
Consolidated assets			$	10,445,655					$	9,111,394

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In addition to revenues and PNOI, we also review our second generation capital expenditures in measuring the performance of our individual Rental Operations segments. We review these expenditures to determine the costs associated with re-leasing vacant space and maintaining the condition of our properties. Our second generation capital expenditures are included within "second generation tenant improvements, leasing costs and building improvements" in our consolidated statements of Cash Flows and are primarily attributable to the industrial segment for the years ended December 31, 2021, 2020 and 2019.

(10)Employee Benefit Plans

We maintain a 401(k) plan for our eligible employees. We make matching contributions of 50% of the employee salary deferral contributions up to 6% of eligible compensation and may also make annual discretionary contributions. A discretionary contribution was declared at the end of 2021, 2020 and 2019. The total expense recognized for this plan was $2.6 million, $2.2 million and $2.1 million for the years ended December 31, 2021, 2020 and 2019, respectively.

Effective January 1, 2022, we have increased the matching contribution of 50% of employee salary deferral contributions to up to 10% of employees' eligible compensation.

(11)Shareholders' Equity of the General Partner and Partners' Capital of the Partnership

General Partner

The General Partner has an at the market ("ATM") equity program that allows it to issue and sell its common shares through sales agents from time to time. Actual sales under the ATM equity program depend on a variety of factors to be determined by the General Partner, including, among others, market conditions, the trading price of the General Partner’s common stock, determinations by the General Partner of the appropriate sources of funding and potential uses of funding available.

In February 2021, the General Partner terminated its previous equity distribution agreement for the ATM equity program and entered into a new equity distribution agreement pursuant to which the General Partner may sell from time to time up to an aggregate offering price of $400.0 million of its common stock through sales agents or forward sellers. No forward sales were executed in 2021 and substantially all of the capacity of this ATM program was utilized as of December 31, 2021.

During 2021, the General Partner issued 8.2 million common shares pursuant to its ATM equity programs, generating gross proceeds of $408.3 million and, after deducting commissions and other costs, net proceeds of $403.6 million. The proceeds from these offerings were contributed to the Partnership and used to fund development activities.

During 2020, the General Partner issued 4.6 million common shares pursuant to its ATM equity programs, generating gross proceeds of $177.1 million and, after deducting commissions and other costs, net proceeds of $175.0 million. The proceeds from these offerings were contributed to the Partnership and used to fund development activities.

During 2019, the General Partner issued 8.0 million common shares pursuant to its ATM equity program, generating gross proceeds of approximately $266.3 million and, after deducting commissions and other costs, net proceeds of approximately $263.3 million. The proceeds from these offerings were contributed to the Partnership and used to fund development activities.

Partnership

For each common share or preferred share that the General Partner issues, the Partnership issues a corresponding General Partner Unit or Preferred Unit, as applicable, to the General Partner in exchange for the contribution of the proceeds from the stock issuance. Similarly, when the General Partner redeems or repurchases common shares or preferred shares, the Partnership redeems the corresponding General Partner Units or Preferred Units held by the General Partner at the same price.

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DUKE REALTY CORPORATION AND DUKE REALTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(12)Stock Based Compensation

We are authorized to issue up to 9.7 million shares of the General Partner's common stock under our stock-based employee and non-employee compensation plans. Executive officers may elect to receive Long-Term Incentive Plan Units ("LTIP Units"), which represent an interest in the Partnership, in lieu of stock based compensation awards denominated in the General Partner's common stock.

Restricted Stock Units ("RSUs")

Under our 2015 Long-Term Incentive Plan, which was approved by the General Partner's shareholders in April 2015, and our 2015 Non-Employee Directors Compensation Plan (collectively, the "Compensation Plans"), RSUs may be granted to non-employee directors, executive officers and selected employees. An RSU is economically equivalent to a share of the General Partner's common stock, and RSUs are valued based on the market price of the General Partner's common stock on the date of the award. Amounts disclosed below include both RSUs and any elected LTIP Units, which have the same vesting schedule as RSUs.

RSUs granted to employees from 2015 to 2021 vest ratably in most cases over a three-year period and are payable in shares of our common stock with a new share of such common stock issued upon each RSU's vesting. RSUs granted to existing non-employee directors vest 100% over one year and have contractual lives of one year.

To the extent that a recipient of an RSU grant is not determined to be retirement eligible, as defined by the Compensation Plans, we recognize expense on a straight-line basis over the vesting period. Expense is recognized immediately at the date of grant to the extent a recipient is retirement eligible and expense is accelerated to the extent that a participant will become retirement eligible prior to the end of the contractual life of granted RSUs.

The following table summarizes transactions for our unvested RSUs, excluding dividend equivalents, for 2021: 

Restricted Stock Units			Number of RSUs						Weighted Average Grant-Date Fair Value
December 31, 2020			678,803						$32.98
Granted in 2021			322,227						$42.15
Vested in 2021			(368,428)						$31.66
Forfeited in 2021			(41,760)						$37.47
December 31, 2021			590,842						$38.49

Compensation cost recognized for RSUs totaled $12.5 million, $12.1 million and $11.0 million for the years ended December 31, 2021, 2020 and 2019, respectively.

As of December 31, 2021, there was $6.3 million of total unrecognized compensation expense related to nonvested RSUs granted under the Plan, which is expected to be recognized over a weighted average period of 1.7 years.

The total intrinsic value (which is equal to the value of a share of the General Partner's common stock on the date of vesting) of RSUs vested during the years ended December 31, 2021, 2020 and 2019 was $11.7 million, $15.4 million and $17.7 million, respectively.

The weighted average grant-date fair value of RSUs granted during 2020 and 2019 was $37.28 and $29.98, respectively.

The weighted average grant-date fair value of nonvested RSUs as of December 31, 2019 was $27.73.

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DUKE REALTY CORPORATION AND DUKE REALTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Performance-Based Awards

A portion of the annual stock-based compensation awards granted to our executive officers annually include performance conditions, measured over a three-year performance period, based on pre-established goals for growth in a defined adjusted funds from operations (“AFFO”) metric. These performance-based awards disclosed below include awards denominated in both common shares of the General Partner or LTIP Units. The total number of instruments issued at the end of each performance period may be earned in a range from 0% to 200% of the target value of the award depending on our AFFO performance relative to the pre-established goals.

To the extent that a recipient of these performance-based awards is not determined to be retirement eligible, as defined by the Compensation Plans, we recognize expense on a straight-line basis over the performance period based on the most likely payout percentage at each reporting period for each grant to the extent that a payout is determined to be probable. Expense is recognized immediately at the date of grant, based on the most likely payout percentage to the extent that a payout is determined to be probable, when a recipient is retirement eligible, and expense is accelerated to the extent that a participant will become retirement eligible prior to the end of the performance period of an award.

Details on the unvested amounts of these annual grants by performance period are as follows:

Performance-Based Awards						Unvested Awards Outstanding						Unvested Weighted Average Grant Date Fair Value
Unvested awards at December 31, 2020						207,712						$33.58
Above target performance adjustment						105,416						$29.98
Vested in 2021						(210,832)						$29.98
Granted in 2021						97,527						$42.07
Unvested awards at December 31, 2021						199,823						$39.62

A summary of vested performance-based awards that are denominated in LTIP units is as follows:

						Vested LTIP Awards Outstanding
Vested Awards at December 31, 2020						322,569
Vested in 2021						148,518
Completed holding period in 2021						(142,324)
Vested Awards at December 31, 2021						328,763

Compensation cost recognized for these performance-based awards totaled $8.5 million, $7.8 million and $6.2 million for the years ended December 31, 2021, 2020 and 2019, respectively.

As of December 31, 2021, there was $760,000 of total unrecognized compensation expense related to nonvested performance-based awards, which is expected to be recognized over a weighted average period of 1.5 years.

The weighted average grant-date fair value, per instrument, for these performance-based awards granted during 2020 and 2019 was $37.29 and $29.98.

The weighted average grant-date fair value of these nonvested performance-based awards as of December 31, 2019 was $27.50.

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DUKE REALTY CORPORATION AND DUKE REALTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(13)Commitments and Contingencies

Legal

We are subject to various legal proceedings and claims that arise in the ordinary course of business. In the opinion of management, the amount of any ultimate liability with respect to these actions is not expected to materially affect our consolidated financial statements or results of operations. 

Environmental

We generally perform environmental site assessments at properties we are considering acquiring. The properties, particularly land parcels, we acquire may have been subject to adverse environmental conditions as a result of previous owners’ operations, which require remediation prior to development of land by the applicable environmental laws or regulations.

At the time of acquisition, we establish a liability for the costs associated with environmental remediation when such obligation has been incurred and can be reasonably estimated. Subsequently we adjust the liability as appropriate when additional information becomes available. We record such environmental liabilities in other liabilities on the Consolidated Balance Sheets. We purchase various environmental insurance policies to mitigate our exposure to environmental liabilities. As of December 31, 2021, we are not aware of any environmental liabilities that would have a material adverse effect on our consolidated financial condition, results of operations or cash flows.

Off-Balance Sheet Liabilities

The Partnership has guaranteed the repayment of $18.5 million of economic development bonds issued by various municipalities in connection with certain commercial developments. We may be required to make payments under our guarantees to the extent that incremental taxes from specified developments are not sufficient to pay the bond debt service. Management does not believe that it is probable that we will be required to make any significant payments in satisfaction of these guarantees.

The Partnership also has guaranteed the repayment of a loan associated with one of our unconsolidated joint ventures. At December 31, 2021, the maximum guarantee exposure for the loan was approximately $4.8 million.

(14)Subsequent Events

Declaration of Dividends/Distributions

The General Partner's board of directors declared the following dividends/distributions at its regularly scheduled board meeting held on January 26, 2022:

Class of stock/units

Quarterly Amount per Share or Unit

Record Date

Payment Date

Common

$

0.28

February 16, 2022

February 28, 2022

Property Dispositions

In January 2022, we contributed three buildings to an unconsolidated joint venture. The joint venture financed the acquisition of these properties with a combination of third party first mortgage loans and equity contributions from our partner and we received approximately $289.7 million of net cash proceeds, including our share of the proceeds from the joint venture's first mortgage loans.

Debt Extinguishment

On January 14, 2022, we provided notice of redemption to the holders of our $300.0 million of 3.75% unsecured notes, which are scheduled to mature in December 2024. This redemption occurred on February 13, 2022 and resulted in a loss on debt extinguishment of approximately $22.0 million, which is comprised of the prepayment premium and the write-off of unamortized deferred financing costs.

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DUKE REALTY CORPORATION AND DUKE REALTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Duke Realty Corporation and Duke Realty Limited Partnership Real Estate and Accumulated Depreciation December 31, 2021 (in thousands of U.S. dollars, as applicable)																														Schedule III
																		Initial Cost												Cost Capitalized Subsequent to Development or Acquisition						Gross Book Value at 12/31/2021
			Name						Asset Type			Encumbrances						Land						Buildings												Land/Land Imp						Bldgs/TI						Total (1)						Accum. Depr. (2)			Year Constructed/Renovated			Year Acquired
Atlanta, Georgia
			Airport Distribution 3781						Industrial			—						4,064						11,383						320						4,064						11,703						15,767						3,683			2002			2014
Aurora, Illinois
			Meridian Business 880						Industrial			—						963						4,625						1,467						963						6,092						7,055						3,376			2000			2000
			4220 Meridian Parkway						Industrial			—						970						3,512						102						970						3,614						4,584						1,544			2004			2004
			Butterfield 2805						Industrial			—						9,185						10,795						5,847						9,272						16,555						25,827						11,623			2008			2008
			Butterfield 4000						Industrial			—						3,132						12,639						70						3,132						12,709						15,841						3,870			2016			2016
			Butterfield 2850						Industrial			—						11,317						18,305						130						11,317						18,435						29,752						6,561			2016			2016
			Butterfield 4200						Industrial			—						5,777						13,108						68						5,967						12,986						18,953						3,493			2016			2016
Austell, Georgia
			Hartman Business 7545						Industrial			—						2,640						21,471						20						2,640						21,491						24,131						8,725			2008			2012
			240 The Bluffs						Industrial			—						6,138						15,447						3,086						6,138						18,533						24,671						2,314			2018			2018
Avenel, New Jersey
			Paddock 1						Industrial			—						20,861						15,408						91						20,861						15,499						36,360						1,644			2020			2020
Baltimore, Maryland
			Chesapeake Commerce 5901						Industrial			—						3,345						1,355						3,855						3,365						5,190						8,555						3,834			2008			2008
			Chesapeake Commerce 5003						Industrial			—						6,488						7,087						5,767						6,546						12,796						19,342						6,739			2008			2008
			Chesapeake Commerce 1500						Industrial			—						8,289						10,109						108						8,333						10,173						18,506						4,326			2016			2016
			Chesapeake Commerce 5900						Industrial			—						5,567						6,100						876						5,567						6,976						12,543						2,373			2017			2017
			Chesapeake Commerce 6000						Industrial			—						2,418						10,369						362						2,418						10,731						13,149						835			2020			2020
Batavia, Ohio
			S Afton Industrial Park 3001						Industrial			—						5,729						20,717						—						5,729						20,717						26,446						2,881			2019			2019
Bloomingdale, Georgia
			Morgan Business Center 400						Industrial			—						18,385						44,455						539						18,385						44,994						63,379						9,004			2017			2017
Bolingbrook, Illinois
			250 East Old Chicago Road						Industrial			—						1,229						4,038						253						1,229						4,291						5,520						1,723			2005			2005
			Crossroads 2						Industrial			—						1,134						5,434						1,407						1,134						6,841						7,975						2,375			1998			2010
			Crossroads 375						Industrial			—						1,064						4,371						497						1,064						4,868						5,932						1,848			2000			2010
			Crossroads Parkway 370						Industrial			—						2,409						4,236						912						2,409						5,148						7,557						2,383			1989			2011
			Crossroads Parkway 605						Industrial			—						3,656						7,587						3,550						3,656						11,137						14,793						3,970			1998			2011
			Crossroads Parkway 335						Industrial			—						2,574						8,342						1,032						2,574						9,374						11,948						3,533			1997			2012

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DUKE REALTY CORPORATION AND DUKE REALTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Duke Realty Corporation and Duke Realty Limited Partnership Real Estate and Accumulated Depreciation December 31, 2021 (in thousands of U.S. dollars, as applicable)																														Schedule III
																		Initial Cost												Cost Capitalized Subsequent to Development or Acquisition						Gross Book Value at 12/31/2021
			Name						Asset Type			Encumbrances						Land						Buildings												Land/Land Imp						Bldgs/TI						Total (1)						Accum. Depr. (2)			Year Constructed/Renovated			Year Acquired
Boynton Beach, Florida
			Gateway Center 1103						Industrial			—						3,701						5,300						1,712						3,702						7,011						10,713						2,920			2002			2010
			Gateway Center 3602						Industrial			—						1,738						4,584						265						1,739						4,848						6,587						1,789			2002			2010
			Gateway Center 3402						Industrial			—						2,063						3,218						471						2,064						3,688						5,752						1,485			2002			2010
			Gateway Center 2055						Industrial			—						1,560						2,583						175						1,560						2,758						4,318						1,036			2000			2010
			Gateway Center 2045						Industrial			—						1,073						1,541						835						1,073						2,376						3,449						922			2000			2010
			Gateway Center 2035						Industrial			—						1,073						1,304						699						1,073						2,003						3,076						772			2000			2010
			Gateway Center 2025						Industrial			—						1,560						2,658						145						1,560						2,803						4,363						1,048			2000			2010
			Gateway Center 1926						Industrial			—						4,143						9,900						1,458						4,144						11,357						15,501						4,653			2004			2010
Braselton, Georgia
			Braselton Business 920						Industrial			—						1,365						7,713						4,921						1,529						12,470						13,999						7,001			2001			2001
			625 Braselton Pkwy						Industrial			—						4,355						21,010						5,726						5,417						25,674						31,091						11,360			2006			2005
			1350 Braselton Parkway						Industrial			—						8,227						8,856						2,158						8,227						11,014						19,241						8,839			2008			2008
Brentwood, Tennessee
			Brentwood South Business 7104						Industrial			—						1,065						4,410						2,084						1,065						6,494						7,559						3,469			1987			1999
			Brentwood South Business 7106						Industrial			—						1,065						1,844						1,974						1,065						3,818						4,883						2,100			1987			1999
			Brentwood South Business 7108						Industrial			—						848						3,233						1,392						848						4,625						5,473						2,650			1989			1999
Brooklyn Park, Minnesota
			7300 Northland Drive						Industrial			—						700						5,289						862						703						6,148						6,851						3,398			1999			1998
			Crosstown North 9201						Industrial			—						835						4,433						1,501						1,121						5,648						6,769						3,168			1998			1999
			Crosstown North 8400						Industrial			—						2,079						4,926						3,044						2,233						7,816						10,049						4,003			1999			1999
			Crosstown North 9100						Industrial			—						1,079						3,743						999						1,166						4,655						5,821						2,591			2000			2000
			Crosstown North 9200						Industrial			—						1,222						2,674						2,690						1,256						5,330						6,586						2,262			2005			2005
			Crosstown North 7601						Industrial			—						2,998						7,472						885						2,998						8,357						11,355						3,366			2005			2005
Buena Park, California
			6280 Artesia Boulevard						Industrial			—						28,582						5,010						871						28,582						5,881						34,463						1,253			2005			2017
Carol Stream, Illinois
			Carol Stream 815						Industrial			—						3,037						11,210						1,849						3,037						13,059						16,096						6,008			2004			2003
			Carol Stream 640						Industrial			—						876						3,200						495						876						3,695						4,571						1,534			1999			2010
			Carol Stream 370						Industrial			—						1,319						5,960						1,053						1,332						7,000						8,332						2,561			2002			2010
			250 Kehoe Boulevard						Industrial			—						1,715						7,552						136						1,715						7,688						9,403						2,843			2008			2011
			Carol Stream 720						Industrial			—						3,362						17,759						1,020						4,083						18,058						22,141						6,592			1999			2011

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DUKE REALTY CORPORATION AND DUKE REALTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Duke Realty Corporation and Duke Realty Limited Partnership Real Estate and Accumulated Depreciation December 31, 2021 (in thousands of U.S. dollars, as applicable)																														Schedule III
																		Initial Cost												Cost Capitalized Subsequent to Development or Acquisition						Gross Book Value at 12/31/2021
			Name						Asset Type			Encumbrances						Land						Buildings												Land/Land Imp						Bldgs/TI						Total (1)						Accum. Depr. (2)			Year Constructed/Renovated			Year Acquired
Carson, California
			20915 S Wilmington Ave						Industrial			—						24,350						7,934						545						24,350						8,479						32,829						346			1996			2020
Carteret, New Jersey
			900 Federal Blvd.						Industrial			—						2,088						24,712						36						2,088						24,748						26,836						4,503			2017			2017
Chino, California
			13799 Monte Vista						Industrial			—						14,046						8,236						2,252						14,046						10,488						24,534						6,983			2013			2013
Cincinnati, Ohio
			Kenwood Commons 8230						Office			663						638						35						2,460						638						2,495						3,133						769			1986			1993
			Kenwood Commons 8280						Office			637						638						275						2,059						638						2,334						2,972						1,241			1986			1993
			World Park 5389						Industrial			—						963						5,550						1,464						963						7,014						7,977						2,616			1994			2010
			World Park 5232						Industrial			—						1,078						5,074						818						1,077						5,893						6,970						2,139			1997			2010
			World Park 5399						Industrial			—						739						5,251						896						740						6,146						6,886						2,605			1998			2010
			World Park 5265						Industrial			—						2,118						11,569						4,480						2,118						16,049						18,167						5,889			2015			2010
City of Industry, California
			825 Ajax Ave						Industrial			—						38,930						27,627						8,133						38,930						35,760						74,690						6,546			2017			2017
			14508 Nelson Ave						Industrial			—						26,162						25,210						950						26,162						26,160						52,322						1,147			2010			2020
College Park, Georgia
			2929 Roosevelt Highway						Industrial			—						9,419						17,205						65						9,419						17,270						26,689						1,696			2020			2020
College Station, Texas
			Baylor College Station MOB						Medical Office			—						5,551						33,770						5,293						5,551						39,063						44,614						17,731			2013			2013
Columbus, Ohio
			RGLP Intermodal North 9224						Industrial			—						1,550						19,873						985						1,550						20,858						22,408						4,100			2016			2016
			RGLP Intermodal S 9799						Industrial			—						13,065						44,159						239						13,065						44,398						57,463						6,695			2018			2018
Coppell, Texas
			Freeport X						Industrial			—						2,145						12,784						3,624						2,145						16,408						18,553						7,325			2004			2004
			Point West 400						Industrial			—						10,181						12,803						9,041						10,475						21,550						32,025						14,092			2008			2008
			Point West 240						Industrial			—						6,785						11,700						6,299						7,519						17,265						24,784						10,965			2008			2008
			Point West 120						Industrial			—						3,267						8,695						147						3,267						8,842						12,109						4,058			2015			2015
Corona, California
			1283 Sherborn Street						Industrial			—						7,231						13,575						428						7,231						14,003						21,234						4,690			2005			2011
Cranbury, New Jersey
			311 Half Acre Road						Industrial			—						6,600						14,106						317						6,600						14,423						21,023						4,886			2004			2013
			315 Half Acre Road						Industrial			—						14,100						29,188						6,998						14,100						36,186						50,286						10,481			2004			2013

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DUKE REALTY CORPORATION AND DUKE REALTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Duke Realty Corporation and Duke Realty Limited Partnership Real Estate and Accumulated Depreciation December 31, 2021 (in thousands of U.S. dollars, as applicable)																														Schedule III
																		Initial Cost												Cost Capitalized Subsequent to Development or Acquisition						Gross Book Value at 12/31/2021
			Name						Asset Type			Encumbrances						Land						Buildings												Land/Land Imp						Bldgs/TI						Total (1)						Accum. Depr. (2)			Year Constructed/Renovated			Year Acquired
Cypress, California
			6450 Katella Ave						Industrial			—						85,984						2,517						—						85,984						2,517						88,501						204			2021			2021
Davenport, Florida
			Park 27 Distribution 210						Industrial			—						1,143						5,052						600						1,198						5,597						6,795						2,698			2003			2003
			Park 27 Distribution 220						Industrial			—						4,374						5,066						5,850						4,502						10,788						15,290						6,664			2007			2007
Davie, Florida
			Westport Business Park 2555						Industrial			—						1,040						951						69						1,040						1,020						2,060						366			1991			2011
			Westport Business Park 2501						Industrial			—						943						629						239						943						868						1,811						401			1991			2011
			Westport Business Park 2525						Industrial			—						2,048						5,774						1,472						2,048						7,246						9,294						2,725			1991			2011
Deer Park, Texas
			801 Seaco Court						Industrial			—						2,331						4,673						627						2,331						5,300						7,631						2,240			2006			2012
Des Moines, Washington
			21202 24th Ave South						Industrial			—						18,720						36,496						43						18,720						36,539						55,259						4,946			2018			2018
			21402 24th Ave South						Industrial			—						18,970						31,048						1,176						18,970						32,224						51,194						4,140			2018			2018
Duluth, Georgia
			Sugarloaf 2775						Industrial			—						560						4,298						1,185						560						5,483						6,043						2,989			1997			1999
			Sugarloaf 3079						Industrial			—						776						4,536						3,482						776						8,018						8,794						4,260			1998			1999
			Sugarloaf 2855						Industrial			—						765						2,618						1,906						765						4,524						5,289						2,301			1999			1999
			Sugarloaf 6655						Industrial			—						1,651						6,804						879						1,651						7,683						9,334						3,591			1998			2001
			2625 Pinemeadow Court						Industrial			—						732						3,096						889						732						3,985						4,717						1,389			1994			2010
			2660 Pinemeadow Court						Industrial			—						459						1,670						118						459						1,788						2,247						699			1996			2010
			2450 Satellite Boulevard						Industrial			—						473						1,730						414						473						2,144						2,617						886			1994			2010
DuPont, Washington
			2700 Center Drive						Industrial			—						34,413						37,943						520						34,582						38,294						72,876						16,473			2013			2013
			2800 Center Drive						Industrial			—						21,025						48,060						1,794						21,025						49,854						70,879						2,420			2020			2020
			2900 Center Drive						Industrial			—						34,692						71,066						34						34,692						71,100						105,792						3,872			2020			2020
			2980 Center Drive						Industrial			—						15,956						17,527						(63)						15,956						17,464						33,420						861			1996			2020
			Center Drive trailer lot						Grounds			—						3,252						—						1						3,253						—						3,253						80			n/a			2020
Durham, North Carolina
			Centerpoint Raleigh 1805						Industrial			—						3,574						10,339						5,260						3,574						15,599						19,173						6,791			2000			2011
			Centerpoint Raleigh 1757						Industrial			—						2,607						8,722						125						2,607						8,847						11,454						2,990			2007			2011
Eagan, Minnesota
			Apollo 920						Industrial			—						866						3,234						2,036						895						5,241						6,136						3,178			1997			1997
			Apollo 940						Industrial			—						474						2,092						784						474						2,876						3,350						1,624			2000			2000
			Apollo 950						Industrial			—						1,432						5,988						127						1,432						6,115						7,547						3,333			2000			2000
			2015 Silver Bell Road						Industrial			—						1,740						4,180						2,997						1,740						7,177						8,917						4,135			1999			1999

-97-

---

DUKE REALTY CORPORATION AND DUKE REALTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Duke Realty Corporation and Duke Realty Limited Partnership Real Estate and Accumulated Depreciation December 31, 2021 (in thousands of U.S. dollars, as applicable)																														Schedule III
																		Initial Cost												Cost Capitalized Subsequent to Development or Acquisition						Gross Book Value at 12/31/2021
			Name						Asset Type			Encumbrances						Land						Buildings												Land/Land Imp						Bldgs/TI						Total (1)						Accum. Depr. (2)			Year Constructed/Renovated			Year Acquired
			Trapp 1279						Industrial			—						671						3,441						1,054						691						4,475						5,166						2,494			1996			1998
			Trapp 1245						Industrial			—						1,250						5,424						1,784						1,250						7,208						8,458						4,048			1998			1998
East Point, Georgia
			Camp Creek 2400						Industrial			—						296						627						2,267						300						2,890						3,190						1,517			1988			2001
			Camp Creek 2600						Industrial			—						364						824						1,702						368						2,522						2,890						1,416			1990			2001
			Camp Creek 3201						Industrial			—						1,937						7,426						2,901						1,937						10,327						12,264						4,610			2004			2004
			Camp Creek 3900						Industrial			—						287						2,919						2,191						286						5,111						5,397						2,487			2005			2005
			Camp Creek 3909						Industrial			—						2,403						1,309						18,177						3,583						18,306						21,889						6,660			2014			2006
			Camp Creek 3000						Industrial			—						1,163						1,020						1,450						1,258						2,375						3,633						1,942			2007			2007
			Camp Creek 4800						Industrial			—						2,476						3,906						2,380						2,740						6,022						8,762						3,944			2008			2008
			Camp Creek 4100						Industrial			—						3,130						9,115						553						3,327						9,471						12,798						4,292			2013			2013
			Camp Creek 3700						Industrial			—						1,878						3,016						100						1,883						3,111						4,994						1,526			2014			2014
			Camp Creek 4909						Industrial			—						7,807						14,321						3,826						7,851						18,103						25,954						6,534			2016			2016
			Camp Creek 3707						Industrial			—						7,282						20,538						3						7,282						20,541						27,823						7,128			2017			2017
			Camp Creek 4505						Industrial			—						4,505						9,697						3,708						4,505						13,405						17,910						2,991			2017			2017
			Camp Creek 4900						Industrial			—						3,244						7,758						778						3,244						8,536						11,780						1,359			2019			2019
			Camp Creek 4850						Industrial			—						5,428						7,169						197						5,428						7,366						12,794						911			2020			2020
			1000 Logistics Way						Industrial			—						10,599						41,030						—						10,599						41,030						51,629						1,709			2021			2021
			Camp Creek 6200						Industrial			—						5,609						15,301						—						5,609						15,301						20,910						177			2021			2021
			2000 Centre Court						Industrial			—						3,938						10,297						—						3,938						10,297						14,235						43			2021			2021
East Rutherford, New Jersey
			66-96 East Union Avenue									—						18,043						3,954						—						18,043						3,954						21,997						186			1969			2021
Easton, Pennsylvania
			33 Logistics Park 1610						Industrial			—						24,752						55,500						1,982						24,896						57,338						82,234						19,386			2016			2016
			33 Logistics Park 1611						Industrial			—						17,979						20,882						1,970						17,979						22,852						40,831						8,385			2017			2017
			33 Logistics Park 1620						Industrial			—						29,786						33,023						1,352						29,791						34,370						64,161						7,449			2018			2018
Elk Grove Village, Illinois
			1717 Busse Road						Industrial			—						3,602						18,065						494						3,602						18,559						22,161						6,631			2004			2011
			901 Chase Avenue						Industrial			—						10,405						8,961						39						10,405						9,000						19,405						1,101			2020			2020
Ellenwood, Georgia
			2529 Old Anvil Block						Industrial			—						4,664						9,265						446						4,664						9,711						14,375						4,133			2014			2014
Fairfield, Ohio
			Union Centre Industrial 6019						Industrial			—						5,635						6,576						2,534						5,635						9,110						14,745						6,111			2008			2008
			Union Centre Industrial 5855						Industrial			—						3,009						15,387						2,063						3,009						17,450						20,459						4,745			2016			2016
			Fairfield Logistics Ctr 7940						Industrial			—						4,679						8,237						2,180						4,689						10,407						15,096						1,889			2018			2018

-98-

---

DUKE REALTY CORPORATION AND DUKE REALTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Duke Realty Corporation and Duke Realty Limited Partnership Real Estate and Accumulated Depreciation December 31, 2021 (in thousands of U.S. dollars, as applicable)																														Schedule III
																		Initial Cost												Cost Capitalized Subsequent to Development or Acquisition						Gross Book Value at 12/31/2021
			Name						Asset Type			Encumbrances						Land						Buildings												Land/Land Imp						Bldgs/TI						Total (1)						Accum. Depr. (2)			Year Constructed/Renovated			Year Acquired
Flower Mound, Texas
			Lakeside Ranch 550						Industrial			—						4,619						19,299						488						4,619						19,787						24,406						6,730			2007			2011
			Lakeside Ranch 1001						Industrial			—						5,662						23,061						2,317						5,662						25,378						31,040						3,724			2019			2019
			Lakeside Ranch 350						Industrial			—						3,665						10,105						4,312						3,665						14,417						18,082						1,452			2019			2019
Fontana, California
			14970 Jurupa Ave						Grounds			—						17,306						—						—						17,306						—						17,306						1,158			n/a			2016
			7953 Cherry Ave						Industrial			—						6,704						12,521						824						6,704						13,345						20,049						3,305			2017			2017
			9988 Redwood Ave						Industrial			—						7,755						16,326						695						7,755						17,021						24,776						4,692			2016			2017
			11250 Poplar Ave						Industrial			—						18,138						33,586						—						18,138						33,586						51,724						8,206			2016			2017
			16171 Santa Ana Ave						Industrial			—						13,681						13,331						112						13,681						13,443						27,124						2,377			2018			2018
Fort Lauderdale, Florida
			Interstate 95 2200						Industrial			—						9,332						13,401						2,123						9,332						15,524						24,856						3,319			2017			2017
			Interstate 95 2100						Industrial			—						10,948						18,681						—						10,948						18,681						29,629						3,513			2017			2017
Fort Worth, Texas
			Riverpark 3300						Industrial			—						1,673						10,633						856						1,674						11,488						13,162						5,016			2007			2011
Franklin, Tennessee
			Aspen Grove Business 277						Industrial			—						936						2,919						3,954						936						6,873						7,809						3,852			1996			1999
			Aspen Grove Business 320						Industrial			—						1,151						5,824						1,628						1,151						7,452						8,603						4,065			1996			1999
			Aspen Grove Business 305						Industrial			—						970						4,677						1,300						970						5,977						6,947						3,245			1998			1999
			Aspen Grove Business 400						Industrial			—						492						1,677						1,218						492						2,895						3,387						1,298			2002			2002
			Brentwood South Business 119						Industrial			—						569						1,063						1,625						569						2,688						3,257						1,485			1990			1999
			Brentwood South Business 121						Industrial			—						445						1,563						614						445						2,177						2,622						1,124			1990			1999
			Brentwood South Business 123						Industrial			—						489						962						1,347						489						2,309						2,798						1,391			1990			1999
Franklin Park, Illinois
			11501 West Irving Park Road						Industrial			—						3,900						2,702						1,835						3,900						4,537						8,437						2,321			2007			2007
Fremont, California
			48401 Fremont Blvd									—						33,621						19,407						—						33,621						19,407						53,028						708			2021			2021
Fullerton, California
			500 Burning Tree Rd						Industrial			—						7,336						4,435						42						7,336						4,477						11,813						1,269			1991			2018
			700 Burning Tree Rd						Industrial			—						5,001						4,915						—						5,001						4,915						9,916						869			1991			2018
Garner, North Carolina
			Greenfield North 600						Industrial			—						519						2,448						536						520						2,983						3,503						1,224			2006			2011

-99-

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DUKE REALTY CORPORATION AND DUKE REALTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Duke Realty Corporation and Duke Realty Limited Partnership Real Estate and Accumulated Depreciation December 31, 2021 (in thousands of U.S. dollars, as applicable)																														Schedule III
																		Initial Cost												Cost Capitalized Subsequent to Development or Acquisition						Gross Book Value at 12/31/2021
			Name						Asset Type			Encumbrances						Land						Buildings												Land/Land Imp						Bldgs/TI						Total (1)						Accum. Depr. (2)			Year Constructed/Renovated			Year Acquired
			Greenfield North 700						Industrial			—						407						2,054						295						408						2,348						2,756						919			2007			2011
			Greenfield North 800						Industrial			—						381						5,772						858						383						6,628						7,011						2,232			2004			2011
			Greenfield North 900						Industrial			—						367						5,792						1,764						370						7,553						7,923						2,746			2007			2011
			Greenfield North 1000						Industrial			—						1,897						6,026						96						1,979						6,040						8,019						2,323			2016			2016
			Greenfield North 1001						Industrial			—						2,517						5,494						2,523						2,610						7,924						10,534						2,462			2017			2017
			N. Greenfield Pkwy						Grounds			—						189						222						10						189						232						421						259			n/a			2015
			Greenfield North 1100						Industrial			—						1,870						5,623						(1)						1,870						5,622						7,492						514			2020			2020
			Greenfield North 1201						Industrial			—						3,462						6,867						3,292						3,462						10,159						13,621						967			2020			2020
			Greenfield North 1300						Industrial			—						6,112						—						—						6,112						—						6,112						217			2021			2021
Geneva, Illinois
			1800 Averill Road						Industrial			—						3,189						11,582						7,640						4,778						17,633						22,411						6,317			2013			2011
Gibsonton, Florida
			Tampa Regional Ind Park 13111						Industrial			—						10,547						8,662						2,011						10,547						10,673						21,220						3,515			2017			2017
			Tampa Regional Ind Park 13040						Industrial			—						13,184						13,475						2,987						13,184						16,462						29,646						3,468			2018			2018
Glendale Heights, Illinois
			990 North Avenue						Industrial			—						12,144						5,933						3,854						12,324						9,607						21,931						1,850			2018			2018
Grand Prairie, Texas
			Grand Lakes 4003						Industrial			—						3,206						9,124						14,038						4,361						22,007						26,368						6,487			2017			2006
			Grand Lakes 3953						Industrial			—						11,853						11,851						13,674						11,853						25,525						37,378						16,448			2008			2008
			1803 W. Pioneer Parkway						Industrial			—						3,158						15,389						97						3,158						15,486						18,644						5,203			2008			2011
			Grand Lakes 4053						Industrial			—						2,468						6,599						1,242						2,468						7,841						10,309						1,656			2018			2018
Groveport, Ohio
			Groveport Commerce Center 6200						Industrial			—						1,049						5,123						2,816						1,049						7,939						8,988						4,685			1999			1999
			Groveport Commerce Center 6300						Industrial			—						510						2,395						2,321						510						4,716						5,226						2,507			2000			2000
			Groveport Commerce Center 6295						Industrial			—						435						5,435						2,160						435						7,595						8,030						3,983			2000			2000
			Groveport Commerce Center 6405						Industrial			—						1,207						10,322						992						1,207						11,314						12,521						4,780			2005			2005
			RGLP North 2842						Industrial			—						5,680						22,366						843						5,680						23,209						28,889						6,905			2008			2010
Hebron, Kentucky
			Hebron 2305						Industrial			—						3,789						10,797						18,591						3,789						29,388						33,177						20,695			2006			2006
			Hebron 2285						Industrial			—						6,790						6,730						5,138						6,813						11,845						18,658						8,333			2007			2007
			Skyport 2350						Industrial			—						898						5,777						1,423						1,428						6,670						8,098						2,415			1997			2010
			Skyport 2250						Industrial			—						1,190						8,680						1,714						1,393						10,191						11,584						3,562			1999			2010
			Skyport 2245						Industrial			—						1,714						8,305						1,167						1,714						9,472						11,186						3,637			2000			2010
			Skyport 2265						Industrial			—						1,153						6,038						846						1,153						6,884						8,037						2,783			2006			2010
			Southpark 1990						Industrial			—						366						7,701						2						366						7,703						8,069						1,373			2016			2016
Hialeah, Florida
			Countyline Corporate Park 3740						Industrial			—						18,934						11,560						45						18,934						11,605						30,539						3,331			2018			2018

-100-

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DUKE REALTY CORPORATION AND DUKE REALTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Duke Realty Corporation and Duke Realty Limited Partnership Real Estate and Accumulated Depreciation December 31, 2021 (in thousands of U.S. dollars, as applicable)																														Schedule III
																		Initial Cost												Cost Capitalized Subsequent to Development or Acquisition						Gross Book Value at 12/31/2021
			Name						Asset Type			Encumbrances						Land						Buildings												Land/Land Imp						Bldgs/TI						Total (1)						Accum. Depr. (2)			Year Constructed/Renovated			Year Acquired
			Countyline Corporate Park 3780						Industrial			—						21,445						22,144						166						21,445						22,310						43,755						4,379			2018			2018
			Countyline Corporate Park 3760						Industrial			—						32,802						52,633						153						32,802						52,786						85,588						8,949			2018			2018
			Countyline Corporate Park 3840						Industrial			—						15,906						14,953						266						15,906						15,219						31,125						3,202			2018			2018
			Countyline Corporate Park 3850						Industrial			—						18,270						17,567						179						18,270						17,746						36,016						2,549			2019			2019
			Countyline Corporate Park 3870						Industrial			—						17,605						17,068						91						17,605						17,159						34,764						2,408			2019			2019
Hialeah Gardens, Florida
			Miami Ind Logistics Ctr 15002						Industrial			—						10,671						14,071						1,828						10,671						15,899						26,570						4,130			2017			2017
			Miami Ind Logistics Ctr 14802						Industrial			—						10,800						14,236						3,635						10,800						17,871						28,671						4,574			2017			2017
			Miami Ind Logistics Ctr 10701						Industrial			—						13,048						17,204						2,366						13,048						19,570						32,618						5,432			2017			2017
Hopkins, Minnesota
			Cornerstone 401						Industrial			—						1,454						7,623						2,462						1,454						10,085						11,539						6,062			1996			1997
Houston, Texas
			Point North 8210						Industrial			—						3,125						2,178						2,293						3,125						4,471						7,596						3,373			2008			2008
			Point North 8120						Industrial			—						4,210						2,108						4,616						4,581						6,353						10,934						3,266			2013			2013
			Point North 8111						Industrial			—						3,957						15,093						642						3,957						15,735						19,692						5,631			2014			2014
			Point North 8411						Industrial			—						5,333						6,946						1,271						5,333						8,217						13,550						3,246			2015			2015
			Westland 8323						Industrial			—						4,183						2,574						3,675						4,417						6,015						10,432						4,591			2008			2008
			Westland 13788						Industrial			—						3,246						8,338						989						3,246						9,327						12,573						5,314			2011			2011
			Gateway Northwest 20710						Industrial			—						7,204						8,028						4,167						7,204						12,195						19,399						5,217			2014			2014
			Gateway Northwest 20702						Industrial			—						2,981						3,122						1,173						2,981						4,295						7,276						1,896			2014			2014
			Gateway Northwest 20502						Industrial			—						2,987						5,342						21						2,987						5,363						8,350						2,206			2016			2016
			22008 N Berwick Drive						Industrial			—						2,981						4,949						905						2,981						5,854						8,835						1,611			2002			2015
			Gateway Northwest 20510						Industrial			—						6,787						11,501						792						6,787						12,293						19,080						3,098			2018			2018
			Point North 8221						Industrial			—						6,503						10,357						1,441						6,503						11,798						18,301						2,117			2019			2019
Huntley, Illinois
			14100 Weber Drive						Industrial			—						7,539						34,069						78						7,539						34,147						41,686						8,068			2015			2015
Hutchins, Texas
			801 Wintergreen Road						Industrial			—						2,288						9,115						1,482						2,288						10,597						12,885						3,926			2006			2006
			Prime Pointe 1005						Industrial			—						5,865						19,420						59						5,865						19,479						25,344						5,340			2016			2016
			Prime Pointe 1015						Industrial			—						8,356						16,319						2,257						8,170						18,762						26,932						3,704			2018			2018
Indianapolis, Indiana
			Park 100 5550						Industrial			—						1,171						12,611						678						1,424						13,036						14,460						8,704			1997			1995
			Park 100 Bldg 121 Land Lease						Grounds			—						3						—						—						3						—						3						—			n/a			2003
			West 79th St. Parking Lot LL						Grounds			—						164						—						—						164						—						164						—			n/a			2006
			North Airport Park 7750						Industrial			—						1,620						4,279						810						1,620						5,089						6,709						2,168			1997			2010
			Park 100 5010						Industrial			—						621						1,687						568						621						2,255						2,876						1,144			1984			2010
			Park 100 5134						Industrial			—						578						1,904						299						578						2,203						2,781						867			1984			2010

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DUKE REALTY CORPORATION AND DUKE REALTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Duke Realty Corporation and Duke Realty Limited Partnership Real Estate and Accumulated Depreciation December 31, 2021 (in thousands of U.S. dollars, as applicable)																														Schedule III
																		Initial Cost												Cost Capitalized Subsequent to Development or Acquisition						Gross Book Value at 12/31/2021
			Name						Asset Type			Encumbrances						Land						Buildings												Land/Land Imp						Bldgs/TI						Total (1)						Accum. Depr. (2)			Year Constructed/Renovated			Year Acquired
			Park 100 5302						Industrial			—						384						998						325						384						1,323						1,707						604			1989			2010
			Park 100 5303						Industrial			—						384						1,515						348						384						1,863						2,247						772			1989			2010
			Park 100 7225						Industrial			—						1,037						13,332						998						1,037						14,330						15,367						5,667			1996			2010
			Park 100 4925						Industrial			—						1,152						8,569						2,319						1,152						10,888						12,040						4,471			2000			2010
			8711 North River Crossing Blvd						HQ/Core Portfolio			17,387						1,211						24,259						70						1,211						24,329						25,540						2,108			2020			2020
Katy, Texas
			3900 Peek Road						Industrial			—						8,584						14,385						4,645						8,584						19,030						27,614						1,351			2020			2020
Kent, Washington
			21214 66th Ave South						Industrial			—						3,813						9,767						—						3,813						9,767						13,580						662			2016			2020
Kutztown, Pennsylvania
			West Hills 9645						Industrial			—						15,340						47,981						623						15,340						48,604						63,944						16,192			2014			2014
			West Hills 9677						Industrial			—						5,218						13,029						68						5,218						13,097						18,315						4,482			2015			2015
La Mirada, California
			16501 Trojan Way						Industrial			—						23,503						30,945						225						23,503						31,170						54,673						11,572			2002			2012
			16301 Trojan Way						Industrial			—						39,645						22,164						45						39,645						22,209						61,854						3,615			2018			2018
Lancaster, Texas
			Lancaster 2820						Industrial			—						9,786						22,270						8						9,786						22,278						32,064						4,953			2018			2018
LaPorte, Texas
			Bayport Container Lot						Grounds			—						3,334						—						1,041						4,375						—						4,375						—			n/a			2010
Lathrop, California
			16825 Murphy Parkway						Industrial			—						10,121						20,959						—						10,121						20,959						31,080						—			2021			2021
Lawrenceville, Georgia
			175 Alcovy Industrial Road						Industrial			—						1,480						2,935						45						1,487						2,973						4,460						1,268			2004			2004
Lebanon, Indiana
			Lebanon Park 185						Industrial			—						177						8,664						1,554						177						10,218						10,395						6,116			2000			1997
			Lebanon Park 322						Industrial			—						340						6,230						1,479						340						7,709						8,049						4,360			1999			1999
			Lebanon Park 500						Industrial			—						816						10,741						2,471						815						13,213						14,028						5,821			2005			2005
			Lebanon Park 210						Industrial			—						156						3,427						109						156						3,536						3,692						1,379			1996			2010
			Lebanon Park 311						Industrial			—						349						7,604						767						350						8,370						8,720						3,380			1998			2010
Lebanon, Tennessee
			Park 840 West 14840						Industrial			—						2,367						8,449						4,907						2,367						13,356						15,723						4,897			2006			2006
			Park 840 East 1009						Industrial			—						7,731						12,462						1,782						7,852						14,123						21,975						7,216			2013			2013
Linden, New Jersey
			Legacy Commerce Center 801						Industrial			—						22,134						23,645						2,198						22,134						25,843						47,977						6,905			2014			2014

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DUKE REALTY CORPORATION AND DUKE REALTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Duke Realty Corporation and Duke Realty Limited Partnership Real Estate and Accumulated Depreciation December 31, 2021 (in thousands of U.S. dollars, as applicable)																														Schedule III
																		Initial Cost												Cost Capitalized Subsequent to Development or Acquisition						Gross Book Value at 12/31/2021
			Name						Asset Type			Encumbrances						Land						Buildings												Land/Land Imp						Bldgs/TI						Total (1)						Accum. Depr. (2)			Year Constructed/Renovated			Year Acquired
			Legacy Commerce Center 301						Industrial			—						6,933						8,575						335						6,933						8,910						15,843						2,845			2015			2015
			Legacy Commerce Center 901						Industrial			—						25,935						19,806						2,311						25,937						22,115						48,052						6,802			2016			2016
Lithia Springs, Georgia
			2601 Skyview Drive						Industrial			—						4,282						9,534						58						4,282						9,592						13,874						2,816			2016			2017
Lockport, Illinois
			Lockport 16328						Industrial			—						3,339						17,446						460						3,339						17,906						21,245						3,659			2016			2017
			Lockport 16410						Industrial			—						2,677						16,117						285						2,677						16,402						19,079						3,249			2016			2017
			Lockport 16508						Industrial			—						4,520						17,472						2,616						4,520						20,088						24,608						4,362			2017			2017
Lockbourne, Ohio
			Creekside 2120						Industrial			—						2,868						15,406						1,031						2,868						16,437						19,305						6,312			2008			2012
			Creekside 4555						Industrial			—						1,947						11,453						294						1,947						11,747						13,694						4,339			2005			2012
Lodi, New Jersey
			65 Industrial Road						Industrial			—						20,063						899						40						20,063						939						21,002						106			1965			2020
Logan Township, New Jersey
			1130 Commerce Boulevard						Industrial			—						3,770						18,699						1,158						3,770						19,857						23,627						6,240			2002			2013
Long Beach, California
			3700 Cover Street						Industrial			—						7,280						6,954						—						7,280						6,954						14,234						3,464			2012			2013
			189 W Victoria St						Industrial			—						16,905						2,373						—						16,905						2,373						19,278						—			1979			2021
Los Angeles, California
			13344 S Main Street						Industrial			—						39,678						23,978						—						39,678						23,978						63,656						403			2021			2021
Lynwood, California
			2700 East Imperial Highway						Industrial			—						15,230						17,865						56						15,230						17,921						33,151						6,338			1999			2011
			11600 Alameda Street						Industrial			—						10,705						10,979						1,949						10,958						12,675						23,633						2,503			2017			2017
Manteca, California
			600 Spreckels Avenue						Industrial			—						4,851						18,985						416						4,851						19,401						24,252						7,117			1999			2012
Maple Grove, Minnesota
			Arbor Lakes 10500						Industrial			—						4,803						9,891						4,090						4,912						13,872						18,784						1,975			2018			2018
			Arbor Lakes 10501						Industrial			—						5,363						17,713						85						5,363						17,798						23,161						2,727			2019			2019
			Park 81 10750						Industrial			—						3,971						9,262						1						3,971						9,263						13,234						1,143			2019			2019
McDonough, Georgia
			Liberty Distribution 120						Industrial			—						615						8,117						733						615						8,850						9,465						4,925			1997			1999
			Liberty Distribution 250						Industrial			—						2,273						10,910						7,946						3,416						17,713						21,129						8,521			2001			2001

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DUKE REALTY CORPORATION AND DUKE REALTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Duke Realty Corporation and Duke Realty Limited Partnership Real Estate and Accumulated Depreciation December 31, 2021 (in thousands of U.S. dollars, as applicable)																														Schedule III
																		Initial Cost												Cost Capitalized Subsequent to Development or Acquisition						Gross Book Value at 12/31/2021
			Name						Asset Type			Encumbrances						Land						Buildings												Land/Land Imp						Bldgs/TI						Total (1)						Accum. Depr. (2)			Year Constructed/Renovated			Year Acquired
Mechanicsburg, Pennsylvania
			500 Independence Avenue						Industrial			—						4,494						15,007						883						4,499						15,885						20,384						5,099			2008			2013
Medley, Florida
			Miami 27 Business Park 10300						Industrial			—						34,758						16,913						—						34,758						16,913						51,671						298			2021			2021
			Miami 27 Business Park 10310						Industrial			—						15,275						11,412						—						15,275						11,412						26,687						255			2021			2021
Melrose Park, Illinois
			1600 North 25th Avenue						Industrial			—						5,907						17,516						299						5,907						17,815						23,722						7,744			2000			2010
Miami, Florida
			9601 NW 112 Avenue						Industrial			—						11,626						14,651						8						11,626						14,659						26,285						5,599			2003			2013
Minooka, Illinois
			Midpoint Distribution 801						Industrial			—						6,282						30,802						627						6,282						31,429						37,711						9,838			2008			2013
Modesto, California
			1000 Oates Court						Industrial			—						10,115						16,944						428						10,115						17,372						27,487						8,440			2002			2012
Monroe Twp., New Jersey
			773 Cranbury South River Road						Industrial			—						3,001						36,527						199						3,001						36,726						39,727						7,609			2016			2017
Moreno Valley, California
			17791 Perris Boulevard						Industrial			—						67,806						74,531						38						67,806						74,569						142,375						14,331			2018			2017
			15810 Heacock Street						Industrial			—						9,727						18,882						2,770						9,727						21,652						31,379						3,389			2017			2017
			24975 Nandina Ave						Industrial			—						13,322						17,214						214						13,322						17,428						30,750						2,172			2019			2019
			24960 San Michele						Industrial			—						8,336						13,699						—						8,336						13,699						22,035						2,430			2019			2019
Morgans Point, Texas
			Barbours Cut 1200						Industrial			—						889						7,140						90						889						7,230						8,119						2,661			2004			2010
			Barbours Cut 1000						Industrial			—						868						7,311						168						868						7,479						8,347						2,756			2005			2010
Morrisville, North Carolina
			Perimeter Park 3000						Industrial			—						482						1,982						1,688						491						3,661						4,152						2,018			1989			1999
			Perimeter Park 2900						Industrial			—						235						1,314						1,644						241						2,952						3,193						1,662			1990			1999
			Perimeter Park 2800						Industrial			—						777						4,151						1,511						791						5,648						6,439						3,039			1992			1999
			Perimeter Park 2700						Industrial			—						662						1,081						2,270						662						3,351						4,013						1,761			2001			2001
			Woodlake 100						Industrial			—						633						3,183						2,080						1,132						4,764						5,896						2,824			1994			1999
			Woodlake 101						Industrial			—						615						3,868						530						615						4,398						5,013						2,411			1997			1999
			Woodlake 200						Industrial			—						357						3,688						932						357						4,620						4,977						2,539			1999			1999
			Woodlake 501						Industrial			—						640						5,477						1,032						640						6,509						7,149						3,283			1999			1999
			Woodlake 400						Industrial			—						390						1,055						443						390						1,498						1,888						685			2004			2004

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DUKE REALTY CORPORATION AND DUKE REALTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Duke Realty Corporation and Duke Realty Limited Partnership Real Estate and Accumulated Depreciation December 31, 2021 (in thousands of U.S. dollars, as applicable)																														Schedule III
																		Initial Cost												Cost Capitalized Subsequent to Development or Acquisition						Gross Book Value at 12/31/2021
			Name						Asset Type			Encumbrances						Land						Buildings												Land/Land Imp						Bldgs/TI						Total (1)						Accum. Depr. (2)			Year Constructed/Renovated			Year Acquired
Myerstown, Pennsylvania
			Central Logistics Park 100						Industrial			—						16,936						29,564						83						16,936						29,647						46,583						2,742			2020			2020
			Central Logistics Park 60						Industrial			—						16,058						26,546						—						16,058						26,546						42,604						807			2021			2021
Naperville, Illinois
			1835 W. Jefferson						Industrial			—						2,209						7,921						1,651						2,213						9,568						11,781						4,182			2005			2003
			175 Ambassador Drive						Industrial			—						3,822						11,252						11						3,822						11,263						15,085						4,540			2006			2010
			1860 West Jefferson						Industrial			—						7,016						35,581						1,113						7,016						36,694						43,710						16,272			2000			2012
Nashville, Tennessee
			Airpark East 800						Industrial			—						1,564						2,129						1,985						1,564						4,114						5,678						1,814			2002			2002
			Nashville Business 3300						Industrial			—						936						4,773						1,914						936						6,687						7,623						3,822			1997			1999
			Nashville Business 3438						Industrial			—						3,048						8,165						2,221						3,048						10,386						13,434						4,758			2005			2005
			Four-Forty Business 700						Industrial			—						938						6,354						706						938						7,060						7,998						4,036			1997			1999
			Four-Forty Business 684						Industrial			—						1,812						6,561						2,207						1,812						8,768						10,580						4,923			1998			1999
			Four-Forty Business 782						Industrial			—						1,522						4,820						1,796						1,522						6,616						8,138						3,705			1997			1999
			Four-Forty Business 784						Industrial			—						471						2,153						1,698						471						3,851						4,322						2,404			1999			1999
			Four-Forty Business 701						Industrial			—						997						4,763						107						997						4,870						5,867						1,838			1996			2010
Newark, New Jersey
			429 Delancy Street						Industrial			—						60,393						85,359						959						60,486						86,225						146,711						8,090			2019			2019
			740-768 Doremus Avenue						Grounds			—						106,552						—						—						106,552						—						106,552						—			n/a			2021
Northlake, Illinois
			Northlake Distribution 635						Industrial			—						5,721						9,008						1,574						5,721						10,582						16,303						4,991			2002			2002
			Northlake Distribution 599						Industrial			—						2,823						5,685						3,400						2,823						9,085						11,908						2,988			2014			2006
			200 Champion Way						Industrial			—						3,554						11,528						832						3,554						12,360						15,914						4,576			1997			2011
Oakland, California
			1905 Dennison Street						Industrial			15,063						12,118						20,518						2						12,118						20,520						32,638						1,131			1956			2020
			955 Kennedy Street						Industrial			9,519						13,053						9,764						—						13,053						9,764						22,817						736			1966			2020
Ontario, California
			1656 Bon View						Industrial			—						9,551						250						—						9,551						250						9,801						23			1991			2021
			2151 S Vintage Ave						Industrial			—						105,589						82,630						—						105,589						82,630						188,219						1,828			1991			2021
Orange, California
			210 W Baywood Ave						Industrial			—						5,066						4,515						1,816						5,066						6,331						11,397						1,049			1989			2018
Orlando, Florida
			2502 Lake Orange						Industrial			—						2,331						3,235						319						2,331						3,554						5,885						1,698			2003			2003

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DUKE REALTY CORPORATION AND DUKE REALTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Duke Realty Corporation and Duke Realty Limited Partnership Real Estate and Accumulated Depreciation December 31, 2021 (in thousands of U.S. dollars, as applicable)																														Schedule III
																		Initial Cost												Cost Capitalized Subsequent to Development or Acquisition						Gross Book Value at 12/31/2021
			Name						Asset Type			Encumbrances						Land						Buildings												Land/Land Imp						Bldgs/TI						Total (1)						Accum. Depr. (2)			Year Constructed/Renovated			Year Acquired
			Parksouth Distribution 2500						Industrial			—						565						4,360						1,714						570						6,069						6,639						3,287			1996			1999
			Parksouth Distribution 2490						Industrial			—						493						4,170						654						498						4,819						5,317						2,764			1997			1999
			Parksouth Distribution 2491						Industrial			—						593						3,150						1,963						597						5,109						5,706						2,719			1998			1999
			Parksouth Distribution 9600						Industrial			—						649						4,111						1,128						653						5,235						5,888						3,091			1997			1999
			Parksouth Distribution 9550						Industrial			—						1,030						4,207						3,521						1,035						7,723						8,758						3,813			1999			1999
			Parksouth Distribution 2481						Industrial			—						725						2,245						1,567						730						3,807						4,537						2,142			2000			2000
			Parksouth Distribution 9592						Industrial			—						623						1,646						99						623						1,745						2,368						845			2003			2003
			Crossroads Business Park 301						Industrial			—						1,653						2,804						4,070						1,653						6,874						8,527						2,891			2006			2006
			Crossroads Business Park 601						Industrial			—						2,701						3,571						2,059						2,701						5,630						8,331						3,244			2007			2007
			7133 Municipal Drive						Industrial			—						5,817						6,820						29						5,817						6,849						12,666						1,296			2018			2018
Otsego, Minnesota
			Gateway North 6301						Industrial			—						1,543						6,515						6,009						2,783						11,284						14,067						2,828			2017			2015
			Gateway North 6651						Industrial			—						3,667						16,249						129						3,748						16,297						20,045						4,548			2015			2015
			Gateway North 6701						Industrial			—						3,266						10,996						237						3,374						11,125						14,499						3,219			2014			2014
			Gateway North 6651						Grounds			—						1,521						—						—						1,521						—						1,521						536			n/a			2016
Pasadena, Texas
			Interport 13001						Industrial			—						5,715						30,961						781						5,655						31,802						37,457						10,451			2007			2013
			Bayport 4035						Industrial			—						3,772						10,255						188						3,772						10,443						14,215						2,264			2008			2017
			Bayport 4331						Industrial			—						7,638						30,213						125						7,638						30,338						37,976						6,970			2008			2017
Perris, California
			3500 Indian Avenue						Industrial			—						16,210						27,759						8,884						18,716						34,137						52,853						12,137			2015			2015
			3300 Indian Avenue						Industrial			—						39,012						43,280						1,870						38,989						45,173						84,162						16,181			2017			2017
			4323 Indian Ave						Industrial			—						20,525						30,125						470						20,525						30,595						51,120						4,644			2019			2019
			4375 N Perris Blvd						Industrial			—						26,830						69,527						57						26,830						69,584						96,414						6,415			2020			2020
			4501 Patterson Avenue						Industrial			—						28,211						49,869						2,621						28,211						52,490						80,701						5,042			2020			2020
			728 W. Rider Street						Industrial			—						69,056						62,459						—						69,056						62,459						131,515						616			2021			2021
Piscataway, New Jersey
			141 Circle Drive North						Grounds			—						5,237						—						29						5,266						—						5,266						—			n/a			2020
			150 Old New Brunswick Road						Industrial			—						52,134						45,883						—						52,134						45,883						98,017						1,090			2021			2021
			600 Ridge Road						Industrial			—						102,080						63,847						—						102,080						63,847						165,927						114			2019			2021
Plymouth, Minnesota
			Waterford Innovation Center						Industrial			—						2,689						9,897						113						2,689						10,010						12,699						2,221			2017			2017
Pomona, California
			1589 E 9th St.						Industrial			—						7,386						14,745						652						7,386						15,397						22,783						3,552			2016			2017

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DUKE REALTY CORPORATION AND DUKE REALTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Duke Realty Corporation and Duke Realty Limited Partnership Real Estate and Accumulated Depreciation December 31, 2021 (in thousands of U.S. dollars, as applicable)																														Schedule III
																		Initial Cost												Cost Capitalized Subsequent to Development or Acquisition						Gross Book Value at 12/31/2021
			Name						Asset Type			Encumbrances						Land						Buildings												Land/Land Imp						Bldgs/TI						Total (1)						Accum. Depr. (2)			Year Constructed/Renovated			Year Acquired
			468 S Humane Way						Industrial			—						11,959						13,044						—						11,959						13,044						25,003						125			2017			2021
			1941 Mission Blvd						Industrial			—						7,405						8,249						—						7,405						8,249						15,654						—			2017			2021
			1943 Mission Blvd						Industrial			—						8,364						10,203						—						8,364						10,203						18,567						—			2017			2021
Perth Amboy, New Jersey
			ePort 960						Industrial			—						14,425						23,463						2,014						14,425						25,477						39,902						4,674			2017			2017
			ePort 980						Industrial			—						43,778						87,019						273						43,778						87,292						131,070						15,950			2017			2017
			ePort 1000						Industrial			—						19,726						41,229						1,040						19,726						42,269						61,995						7,244			2017			2017
			Steel Run Logistics Ctr Bldg 1						Industrial			—						31,987						23,948						388						32,318						24,005						56,323						2,277			2020			2020
			Steel Run Logistics Ctr Bldg 2						Industrial			—						73,056						68,473						4,145						73,974						71,700						145,674						4,412			2020			2020
Plainfield, Indiana
			Plainfield 1551						Industrial			—						1,097						7,772						10,831						1,097						18,603						19,700						8,380			2015			2000
			Plainfield 1581						Industrial			—						1,094						7,279						2,506						1,094						9,785						10,879						5,013			2000			2000
			Plainfield 2209						Industrial			—						2,016						8,717						2,639						2,016						11,356						13,372						5,334			2002			2002
			Plainfield 1390						Industrial			—						998						5,817						986						998						6,803						7,801						2,887			2004			2004
			Plainfield 2425						Industrial			—						1,917						10,908						1,979						1,918						12,886						14,804						5,052			2006			2006
			Home Depot trailer parking lot						Grounds			—						310						—						—						310						—						310						—			2018			2018
			AllPoints Midwest Bldg. 1						Industrial			—						6,692						51,152						2,056						6,692						53,208						59,900						12,143			2008			2016
			AllPoints Midwest Bldg. 4						Industrial			—						4,111						9,943						22						4,053						10,023						14,076						6,293			2012			2013
			AllPoints Midwest Bldg. 10						Industrial			—						2,867						22,335						—						2,867						22,335						25,202						1,017			2018			2021
Pompano Beach, Florida
			Atlantic Business 1700						Industrial			—						2,743						8,821						1,849						2,743						10,670						13,413						4,259			2000			2010
			Atlantic Business 1800						Industrial			—						2,308						8,381						564						2,308						8,945						11,253						3,439			2001			2010
			Atlantic Business 1855						Industrial			—						2,395						8,162						234						2,395						8,396						10,791						3,107			2001			2010
			Atlantic Business 2022						Industrial			—						1,563						5,885						41						1,563						5,926						7,489						2,190			2002			2010
			Atlantic Business 1914						Industrial			—						1,589						5,332						31						1,589						5,363						6,952						1,982			2002			2010
			Atlantic Business 2003						Industrial			—						1,716						5,918						831						1,716						6,749						8,465						2,876			2002			2010
			Atlantic Business 1901						Industrial			—						1,729						6,199						381						1,729						6,580						8,309						2,397			2004			2010
			Atlantic Business 2200						Industrial			—						1,732						6,012						843						1,732						6,855						8,587						2,802			2004			2010
			Atlantic Business 2100						Industrial			—						1,723						6,130						141						1,723						6,271						7,994						2,306			2002			2010
			Atlantic Business 2201						Industrial			—						1,901						4,050						121						1,901						4,171						6,072						1,534			2005			2010
			Atlantic Business 2101						Industrial			—						1,790						6,682						122						1,791						6,803						8,594						2,479			2004			2010
			Atlantic Business 2103						Industrial			—						1,400						3,628						118						1,401						3,745						5,146						1,412			2005			2010
			Copans Business Park 1571						Industrial			—						1,482						3,646						367						1,482						4,013						5,495						1,480			1989			2010
			Copans Business Park 1521						Industrial			—						1,543						3,101						309						1,544						3,409						4,953						1,305			1989			2010
			Park Central 3250						Industrial			—						1,463						1,997						10						1,463						2,007						3,470						799			1999			2010

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DUKE REALTY CORPORATION AND DUKE REALTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Duke Realty Corporation and Duke Realty Limited Partnership Real Estate and Accumulated Depreciation December 31, 2021 (in thousands of U.S. dollars, as applicable)																														Schedule III
																		Initial Cost												Cost Capitalized Subsequent to Development or Acquisition						Gross Book Value at 12/31/2021
			Name						Asset Type			Encumbrances						Land						Buildings												Land/Land Imp						Bldgs/TI						Total (1)						Accum. Depr. (2)			Year Constructed/Renovated			Year Acquired
			Park Central 3760						Industrial			—						2,685						2,491						1,682						2,685						4,173						6,858						1,647			1995			2010
			Pompano Commerce Center 2901						Industrial			—						2,177						3,896						789						2,178						4,684						6,862						1,758			2010			2010
			Pompano Commerce Center 3101						Industrial			—						2,905						4,095						571						2,916						4,655						7,571						1,805			2015			2015
			Pompano Commerce Center 2951						Industrial			—						2,177						4,465						37						2,178						4,501						6,679						1,720			2010			2010
			Pompano Commerce Center 3151						Industrial			—						2,897						3,939						121						2,908						4,049						6,957						1,369			2015			2015
			Sample 95 Business Park 3101						Industrial			—						2,860						6,115						565						2,860						6,680						9,540						2,464			1999			2010
			Sample 95 Business Park 3001						Industrial			—						2,568						6,135						121						2,568						6,256						8,824						2,264			1999			2011
			Sample 95 Business Park 3035						Industrial			—						3,218						4,288						411						3,218						4,699						7,917						1,759			1999			2011
			Sample 95 Business Park 3135						Industrial			—						1,463						4,890						858						1,463						5,748						7,211						2,441			1999			2010
			Copans Business Park 1551						Industrial			—						1,608						3,146						667						1,609						3,812						5,421						1,636			1989			2011
			Copans Business Park 1501						Industrial			—						1,723						3,367						365						1,723						3,732						5,455						1,339			1989			2011
			Park Central 1700						Industrial			—						3,584						6,361						863						3,585						7,223						10,808						2,760			1998			2011
			Park Central 2101						Industrial			—						2,336						5,756						1,135						2,337						6,890						9,227						2,736			1998			2011
			Park Central 3300						Industrial			—						1,417						2,846						434						1,417						3,280						4,697						1,309			1996			2011
			Park Central 100						Industrial			—						1,300						1,992						660						1,300						2,652						3,952						1,083			1998			2011
			Park Central 1300						Industrial			—						2,113						3,021						2,178						2,113						5,199						7,312						2,484			1997			2011
			Copans 95 1731						Industrial			—						3,511						5,889						1,749						3,518						7,631						11,149						864			2019			2019
Port Wentworth, Georgia
			100 Logistics Way						Industrial			4,019						1,975						11,043						2,283						2,005						13,296						15,301						5,561			2006			2006
			500 Expansion Boulevard						Industrial			1,903						649						5,842						144						649						5,986						6,635						2,202			2006			2008
			400 Expansion Boulevard						Industrial			—						1,636						13,186						2,798						1,636						15,984						17,620						5,223			2007			2008
			605 Expansion Boulevard						Industrial			—						1,615						6,852						5,273						1,615						12,125						13,740						2,833			2020			2008
			405 Expansion Boulevard						Industrial			—						535						3,192						50						535						3,242						3,777						1,088			2008			2009
			600 Expansion Boulevard						Industrial			—						1,248						9,392						33						1,248						9,425						10,673						3,139			2008			2009
			602 Expansion Boulevard						Industrial			—						1,840						10,981						88						1,859						11,050						12,909						3,617			2009			2009
Raleigh, North Carolina
			Walnut Creek 540						Industrial			—						419						1,651						1,054						419						2,705						3,124						1,287			2001			2001
			Walnut Creek 4000						Industrial			—						456						2,078						492						456						2,570						3,026						1,287			2001			2001
			Walnut Creek 3080						Industrial			—						679						2,766						1,534						679						4,300						4,979						2,055			2001			2001
			Walnut Creek 3070						Industrial			—						913						1,187						1,500						913						2,687						3,600						1,198			2004			2004
			Walnut Creek 3071						Industrial			—						1,718						2,746						618						1,718						3,364						5,082						2,321			2008			2008
Rancho Cucamonga, California
			9189 Utica Ave						Industrial			—						5,794						12,646						265						5,794						12,911						18,705						3,278			2016			2017
			10415 8th Street						Industrial			—						8,641						9,790						—						8,641						9,790						18,431						144			2021			2021

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DUKE REALTY CORPORATION AND DUKE REALTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Duke Realty Corporation and Duke Realty Limited Partnership Real Estate and Accumulated Depreciation December 31, 2021 (in thousands of U.S. dollars, as applicable)																														Schedule III
																		Initial Cost												Cost Capitalized Subsequent to Development or Acquisition						Gross Book Value at 12/31/2021
			Name						Asset Type			Encumbrances						Land						Buildings												Land/Land Imp						Bldgs/TI						Total (1)						Accum. Depr. (2)			Year Constructed/Renovated			Year Acquired
Rancho Dominguez, California
			18700 Laurel Park Rd						Industrial			—						8,080						2,987						456						8,438						3,085						11,523						913			1971			2017
Redlands, California
			2300 W. San Bernadino Ave						Industrial			—						20,031						17,968						1,911						20,031						19,879						39,910						8,710			2001			2013
			9180 Alabama St.						Industrial			—						52,999						52,226						—						52,999						52,226						105,225						1,958			2021			2021
Richmond, California
			2041 Factory Street						Industrial			—						8,132						22,266						—						8,132						22,266						30,398						2,723			2000			2019
Romeoville, Illinois
			875 W. Crossroads Parkway						Industrial			—						4,113						7,274						1,685						4,113						8,959						13,072						3,665			2005			2005
			Crossroads 1255						Industrial			—						2,350						9,217						3,090						2,350						12,307						14,657						5,250			1999			2010
			Crossroads 801						Industrial			—						2,622						6,184						305						2,622						6,489						9,111						4,522			2009			2010
			1341-1343 Enterprise Drive						Industrial			—						3,076						12,150						394						3,076						12,544						15,620						2,930			2015			2015
			50-56 N. Paragon						Industrial			—						3,985						5,433						1,212						3,985						6,645						10,630						2,174			2017			2017
			Airport Logistics Center I						Industrial			—						9,133						17,187						5,843						11,282						20,881						32,163						2,998			2019			2019
Roseville, Minnesota
			2215 Highway 36 West						Industrial			—						1,132						5,931						1,283						1,132						7,214						8,346						2,852			1998			2011
			2420 Long Lake Road						Industrial			—						939						4,135						1,078						939						5,213						6,152						1,983			2000			2011
San Leandro, California
			1919 Williams Street						Grounds			—						27,739						2,038						493						27,739						2,531						30,270						574			n/a			2019
Santa Fe Springs, California
			13215 Cambridge Street						Industrial			—						3,558						10,167						—						3,558						10,167						13,725						122			2021			2021
Savannah, Georgia
			198 Gulfstream						Industrial			—						475						3,650						956						476						4,605						5,081						1,706			1997			2006
			194 Gulfstream						Industrial			—						358						2,359						285						358						2,644						3,002						1,058			1998			2006
			190 Gulfstream						Industrial			—						599						4,134						372						599						4,506						5,105						1,849			1999			2006
			250 Grange Road						Industrial			—						771						7,776						51						771						7,827						8,598						3,130			2002			2006
			248 Grange Road						Industrial			—						529						3,180						8						529						3,188						3,717						1,278			2002			2006
			318 Grange Road						Industrial			—						759						4,131						892						759						5,023						5,782						1,900			2001			2006
			246 Grange Road						Industrial			2,096						972						7,486						744						972						8,230						9,202						3,123			2006			2006
			163 Portside Court						Industrial			—						5,260						7,746						260						5,260						8,006						13,266						3,212			2004			2006
			151 Portside Court						Industrial			—						840						7,117						1,398						790						8,565						9,355						3,298			2003			2006
			175 Portside Court						Industrial			4,206						3,740						13,344						1,619						4,229						14,474						18,703						5,831			2005			2006

-109-

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DUKE REALTY CORPORATION AND DUKE REALTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Duke Realty Corporation and Duke Realty Limited Partnership Real Estate and Accumulated Depreciation December 31, 2021 (in thousands of U.S. dollars, as applicable)																														Schedule III
																		Initial Cost												Cost Capitalized Subsequent to Development or Acquisition						Gross Book Value at 12/31/2021
			Name						Asset Type			Encumbrances						Land						Buildings												Land/Land Imp						Bldgs/TI						Total (1)						Accum. Depr. (2)			Year Constructed/Renovated			Year Acquired
			235 Jimmy Deloach Parkway						Industrial			—						934						7,201						1,277						893						8,519						9,412						3,529			2001			2006
			239 Jimmy Deloach Parkway						Industrial			—						934						6,424						732						934						7,156						8,090						2,961			2001			2006
			246 Jimmy Deloach Parkway						Industrial			1,274						863						4,878						33						806						4,968						5,774						1,999			2006			2006
			200 Logistics Way						Industrial			2,955						878						9,274						1,337						883						10,606						11,489						3,513			2006			2008
			2509 Dean Forest Road						Industrial			—						2,080						5,987						2,477						2,602						7,942						10,544						3,236			2008			2011
			276 Jimmy Deloach Parkway						Industrial			—						6,772						6,405						327						6,772						6,732						13,504						1,211			2019			2019
Sea Brook, Texas
			Bayport Logistics 5300						Industrial			—						1,578						11,361						195						1,577						11,557						13,134						4,304			2009			2010
			Bayport Logistics 5801						Industrial			—						5,116						7,663						251						5,116						7,914						13,030						3,021			2015			2015
Shakopee, Minnesota
			3880 4th Avenue East						Industrial			—						1,023						6,102						36						1,049						6,112						7,161						2,083			2000			2011
			Gateway South 2301						Industrial			—						2,648						11,898						91						2,647						11,990						14,637						2,881			2016			2016
			Gateway South 2101						Industrial			—						4,273						16,252						90						4,273						16,342						20,615						3,406			2017			2017
Sharonville, Ohio
			Mosteller 11400						Industrial			—						408						2,705						3,773						408						6,478						6,886						3,190			1997			1997
South Brunswick, New Jersey
			10 Broadway Road						Industrial			—						15,168						13,916						1,226						15,168						15,142						30,310						4,445			2017			2017
Stafford, Texas
			10225 Mula Road						Industrial			—						3,502						2,656						3,845						3,502						6,501						10,003						3,987			2008			2008
Sterling, Virginia
			TransDulles Centre 22601						Industrial			—						1,700						5,001						602						1,700						5,603						7,303						3,022			2004			2016
			TransDulles Centre 22620						Industrial			—						773						1,957						16						773						1,973						2,746						1,063			1999			2016
			TransDulles Centre 22626						Industrial			—						1,544						3,874						321						1,544						4,195						5,739						2,198			1999			2016
			TransDulles Centre 22633						Industrial			—						702						1,586						34						702						1,620						2,322						861			2004			2016
			TransDulles Centre 22635						Industrial			—						1,753						4,182						17						1,753						4,199						5,952						2,270			1999			2016
			TransDulles Centre 22645						Industrial			—						1,228						3,411						379						1,228						3,790						5,018						1,985			2005			2016
			TransDulles Centre 22714						Industrial			—						3,973						3,535						1,251						3,973						4,786						8,759						3,045			2007			2007
			TransDulles Centre 22750						Industrial			—						2,068						4,970						357						2,068						5,327						7,395						2,802			2003			2016
			TransDulles Centre 22815						Industrial			—						7,685						5,713						414						7,685						6,127						13,812						3,634			2000			2016
			TransDulles Centre 22825						Industrial			—						1,758						4,951						305						1,758						5,256						7,014						2,761			1997			2016
			TransDulles Centre 22879						Industrial			—						2,828						8,425						399						2,828						8,824						11,652						4,648			1989			2016
			TransDulles Centre 22880						Industrial			—						2,311						4,922						10						2,311						4,932						7,243						2,785			1998			2016
			TransDulles Centre 46213						Industrial			—						5,912						3,965						462						5,912						4,427						10,339						2,105			2015			2015
Sumner, Washington
			13501 38th Street East						Industrial			—						16,032						4,954						332						16,032						5,286						21,318						5,277			2005			2007
			4800 E Valley Highway						Industrial			—						12,567						21,838						—						12,567						21,838						34,405						3,707			2004			2019

-110-

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DUKE REALTY CORPORATION AND DUKE REALTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Duke Realty Corporation and Duke Realty Limited Partnership Real Estate and Accumulated Depreciation December 31, 2021 (in thousands of U.S. dollars, as applicable)																														Schedule III
																		Initial Cost												Cost Capitalized Subsequent to Development or Acquisition						Gross Book Value at 12/31/2021
			Name						Asset Type			Encumbrances						Land						Buildings												Land/Land Imp						Bldgs/TI						Total (1)						Accum. Depr. (2)			Year Constructed/Renovated			Year Acquired
			1510 Puyallup Street						Industrial			—						12,040						13,225						—						12,040						13,225						25,265						175			2021			2021
Suwanee, Georgia
			Horizon Business 90						Industrial			—						153						1,143						221						153						1,364						1,517						497			2002			2010
			Horizon Business 225						Industrial			—						388						2,048						703						389						2,750						3,139						1,289			1990			2010
			Horizon Business 250						Industrial			—						1,381						5,660						1,172						1,381						6,832						8,213						2,848			1997			2010
			Horizon Business 70						Industrial			—						813						3,397						1,015						812						4,413						5,225						1,779			1998			2010
			Horizon Business 2780						Industrial			—						972						5,576						2,128						972						7,704						8,676						2,718			1997			2010
			Horizon Business 25						Industrial			—						615						2,390						2,007						614						4,398						5,012						2,008			1999			2010
			Horizon Business 2790						Industrial			—						780						4,952						—						780						4,952						5,732						1,899			2006			2010
			1000 Northbrook Parkway						Industrial			—						643						2,974						729						643						3,703						4,346						1,618			1986			2010
Tampa, Florida
			Fairfield Distribution 8640						Industrial			—						483						2,359						1,080						487						3,435						3,922						1,733			1998			1999
			Fairfield Distribution 4720						Industrial			—						530						4,624						590						534						5,210						5,744						2,854			1998			1999
			Fairfield Distribution 4758						Industrial			—						334						2,658						756						338						3,410						3,748						1,792			1999			1999
			Fairfield Distribution 8600						Industrial			—						600						1,185						2,084						604						3,265						3,869						1,921			1999			1999
			Fairfield Distribution 4901						Industrial			—						488						2,425						1,136						488						3,561						4,049						1,875			2000			2000
			Fairfield Distribution 4727						Industrial			—						555						3,348						1,785						555						5,133						5,688						2,299			2001			2001
			Fairfield Distribution 4701						Industrial			—						394						1,350						2,244						394						3,594						3,988						1,509			2001			2001
			Fairfield Distribution 4661						Industrial			—						444						1,640						879						444						2,519						2,963						1,191			2004			2004
			Eagle Creek Business 8701						Industrial			—						1,286						2,331						2,702						1,287						5,032						6,319						2,407			2006			2006
			Eagle Creek Business 8651						Industrial			—						2,354						1,661						1,660						2,354						3,321						5,675						2,975			2007			2007
			Eagle Creek Business 8601						Industrial			—						2,332						2,229						892						2,332						3,121						5,453						2,596			2007			2007
			Pinebrooke Bus Center 10350						Industrial			—						2,457						6,211						393						2,457						6,604						9,061						517			2020			2020
Teterboro, New Jersey
			1 Catherine Street						Industrial			—						14,376						18,788						11						14,376						18,799						33,175						4,652			2016			2017
Tracy, California
			1400 Pescadero Avenue						Industrial			—						9,633						39,644						—						9,633						39,644						49,277						15,142			2008			2013
			1124 E Pescadero Ave						Grounds			—						24,944						—						—						24,944						—						24,944						768			2021			2021
West Chester, Ohio
			World Park Union Centre 9287						Industrial			—						582						827						7,518						582						8,345						8,927						3,364			2006			2006
			World Park Union Centre 9271						Industrial			—						557						5,923						528						557						6,451						7,008						2,804			2004			2004
			World Park Union Centre 9266						Industrial			—						956						5,951						440						956						6,391						7,347						2,535			1999			2010
			World Park Union Centre 9451						Industrial			—						1,036						6,053						873						1,036						6,926						7,962						2,685			1999			2010
			World Park Union Centre 5443						Industrial			—						935						4,753						429						935						5,182						6,117						2,019			2005			2010
			World Park Union Centre 9107						Industrial			—						986						5,962						1,578						986						7,540						8,526						3,305			1999			2010
			World Park Union Centre 9245						Industrial			—						1,011						5,535						782						1,010						6,318						7,328						2,515			2001			2010

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Duke Realty Corporation and Duke Realty Limited Partnership Real Estate and Accumulated Depreciation December 31, 2021 (in thousands of U.S. dollars, as applicable)																														Schedule III
																		Initial Cost												Cost Capitalized Subsequent to Development or Acquisition						Gross Book Value at 12/31/2021
			Name						Asset Type			Encumbrances						Land						Buildings												Land/Land Imp						Bldgs/TI						Total (1)						Accum. Depr. (2)			Year Constructed/Renovated			Year Acquired
West Palm Beach, Florida
			Park of Commerce 5655						Industrial			—						1,417						1,728						310						1,417						2,038						3,455						757			2010			2010
			Park of Commerce 5720						Industrial			—						1,872						3,633						844						2,032						4,317						6,349						1,636			2010			2010
			Airport Center 1701						Industrial			—						2,112						5,844						689						2,112						6,533						8,645						2,628			2002			2010
			Airport Center 1805						Industrial			—						1,478						4,445						251						1,479						4,695						6,174						1,785			2002			2010
			Airport Center 1865						Industrial			—						1,300						4,168						773						1,300						4,941						6,241						1,843			2002			2010
			Park of Commerce #4						Grounds			—						5,882						—						—						5,882						—						5,882						—			n/a			2011
			Park of Commerce #5						Grounds			—						6,258						—						—						6,258						—						6,258						—			n/a			2011
			Turnpike Crossing 1315						Industrial			—						7,390						5,391						353						7,390						5,744						13,134						2,393			2016			2016
			Turnpike Crossing 1333						Industrial			—						6,255						4,560						975						6,255						5,535						11,790						2,439			2016			2016
			Turnpike Crossing 6747						Industrial			—						10,607						7,112						2,786						10,607						9,898						20,505						3,301			2017			2017
			Turnpike Crossing 6729						Industrial			—						8,576						7,506						723						8,576						8,229						16,805						1,902			2018			2018
			Turnpike Crossing 6711						Industrial			—						8,328						7,210						38						8,340						7,236						15,576						927			2019			2019
			Turnpike Crossing 6717						Industrial			—						7,849						9,542						1,378						7,850						10,919						18,769						947			2020			2020
Wilmer, TX
			110 Sunridge Blvd						Industrial			—						5,692						18,751						—						5,692						18,751						24,443						407			2021			2021
Wind Gap, Pennsylvania
			1380 Jacobsburg Road						Industrial			—						15,500						25,247						753						15,500						26,000						41,500						4,555			2017			2019
Wood-Ridge, New Jersey
			5 Ethel Boulevard						Industrial			—						18,776						24,752						32						18,776						24,784						43,560						3,009			2019			2019
			Accum. Depr. on Improvements of Undeveloped Land																																																			561
			Eliminations																											(20)						(16)						(4)						(20)						9
			Properties held-for-sale																																	(67,818)						(102,867)						(170,685)						(36,785)
												59,722						3,480,500						5,473,564						660,060						3,435,591						6,007,848						9,443,439						1,684,413

(1)The tax basis (in thousands) of our real estate assets at December 31, 2021 was approximately $8,734,029 (unaudited) for federal income tax purposes.

(2)Depreciation of real estate is computed using the straight-line method not to exceed 40 years for buildings and 15 years for land improvements for properties that we develop, and not to exceed 30 years for buildings and 10 years for land improvements for properties that we acquire. Tenant improvements are depreciated over shorter periods based on lease terms (generally 3 to 10 years).

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

						Real Estate Assets																		Accumulated Depreciation
						2021						2020						2019						2021						2020						2019
Balance at beginning of year						$	8,768,432					$	7,851,278					$	7,248,346					$	1,665,284					$	1,487,593					$	1,345,060
Acquisitions						595,719						410,003						205,390
Construction costs and tenant improvements						979,367						796,312						635,173
Depreciation expense																								304,935						297,158						272,422
Cost of real estate sold or contributed						(598,445)						(203,502)						(176,603)						(118,072)						(33,808)						(68,861)
Write-off of fully depreciated assets						(130,949)						(85,659)						(61,028)						(130,949)						(85,659)						(61,028)
Balance at end of year including held-for-sale						$	9,614,124					$	8,768,432					$	7,851,278					$	1,721,198					$	1,665,284					$	1,487,593
Properties held-for-sale						(170,685)						(72,754)						(23,401)						(36,785)						(5,976)						(7,132)
Balance at end of year excluding held-for-sale						$	9,443,439					$	8,695,678					$	7,827,877					$	1,684,413					$	1,659,308					$	1,480,461
Other real estate investments						172,637						49,477						165,500
Real estate assets						$	9,616,076					$	8,745,155					$	7,993,377

See Accompanying Notes to Independent Auditors' Report

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Item 16.  Form 10-K Summary

Not applicable.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following exhibits are filed with this Form 10-K or incorporated herein by reference to the listed document previously filed with the SEC. Previously unfiled documents are noted with an asterisk (*). 

Number						Description
3.1						Sixth Amended and Restated Articles of Incorporation of the General Partner (filed as Exhibit 3.1 to the combined Current Report on Form 8-K of the General Partner and the Partnership as filed with the SEC on January 5, 2015, and incorporated herein by this reference).
3.2						Fifth Amended and Restated Bylaws of the General Partner (filed as Exhibit 3.1 to the General Partner's Current Report on Form 8-K as filed with the SEC on October 26, 2017, and incorporated herein by this reference).
3.3						Certificate of Limited Partnership of the Partnership, dated September 17, 1993 (filed as Exhibit 3.1(i) to the Partnership's Annual Report on Form 10-K for the year ended December 31, 2006 as filed with the SEC on March 13, 2007, and incorporated herein by this reference) (File No. 000-20625).
3.4(i)						Fifth Amended and Restated Agreement of Limited Partnership of the Partnership (filed as Exhibit 3.2 to the combined Current Report on Form 8-K of the General Partner and the Partnership as filed with the SEC on May 5, 2014, and incorporated herein by this reference).
3.4(ii)						First Amendment to Fifth Amended and Restated Agreement of Limited Partnership of the Partnership (filed as Exhibit 3.2 to the combined Current Report on Form 8-K of the General Partner and the Partnership as filed with the SEC on August 6, 2014, and incorporated herein by this reference).
3.4(iii)						Second Amendment to Fifth Amended and Restated Agreement of Limited Partnership of the Partnership (filed as Exhibit 3.2 to the combined Current Report on Form 8-K of the General Partner and the Partnership as filed with the SEC on December 16, 2014, and incorporated herein by this reference).
3.4(iv)						Third Amendment to Fifth Amended and Restated Agreement of Limited Partnership of the Partnership (filed as Exhibit 3.2 to the combined Current Report on Form 8-K of the General Partner and the Partnership as filed with the SEC on January 5, 2015, and incorporated herein by this reference).
3.4(v)						Fourth Amendment to Fifth Amended and Restated Agreement of Limited Partnership of the Partnership (filed as Exhibit 3.1 to the combined Current Report on Form 8-K of the General Partner and the Partnership as filed with the SEC on January 29, 2015, and incorporated herein by this reference).
3.4(vi)						Fifth Amendment to Fifth Amended and Restated Agreement of Limited Partnership of Duke Realty Limited Partnership, dated October 24, 2018 (filed as Exhibit 3.1 to the combined Current Report on Form 8-K of the General Partner and the Partnership as filed with the SEC on October 25, 2018, and incorporated herein by this reference).
4.1						Specimen certificate for shares of common stock, $.01 par value (filed as Exhibit 4.1 to the combined Annual Report on Form 10-K of the General Partner and Partnership as filed with the SEC on February 16, 2018, and incorporated herein by this reference).
4.2(i)						Indenture, dated September 19, 1995, between the Partnership and The First National Bank of Chicago, Trustee (filed as Exhibit 4.1 to the General Partner's Current Report on Form 8-K as filed with the SEC on September 22, 1995, and incorporated herein by this reference) (File No. 001-09044).

4.2(ii)						Twentieth Supplemental Indenture, dated as of July 24, 2006, by and between the Partnership and J.P. Morgan Trust Company, National Association (successor in interest to The First National Bank of Chicago), modifying certain financial covenants contained in Sections 1004 and 1005 of the Indenture, dated September 19, 1995, between the Partnership and The First National Bank of Chicago, Trustee (filed as Exhibit 4.1 to the Partnership's Current Report on Form 8-K as filed with the SEC on July 28, 2006, and incorporated herein by this reference) (File No. 000-20625).

4.3(i)						Indenture, dated as of July 28, 2006, by and between the Partnership and J.P. Morgan Trust Company, National Association (filed as Exhibit 4.1 to the General Partner's automatic shelf registration statement on Form S-3 as filed with the SEC on July 31, 2006, and incorporated herein by this reference) (File No. 333-136173).
4.3(ii)						Ninth Supplemental Indenture, dated September 19, 2012, by and between the Partnership and The Bank of New York Mellon Trust Company, N.A. (as successor to J.P. Morgan Trust Company, National Association), including the form of global note evidencing the 3.875% Senior Notes Due 2022 (filed as Exhibit 4.1 to the General Partner's Current Report on Form 8-K as filed with the SEC on September 19, 2012, and incorporated herein by this reference).

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4.3(iii)						Tenth Supplemental Indenture, dated March 15, 2013, by and between the Partnership and The Bank of New York Mellon Trust Company, N.A. (as successor to J.P. Morgan Trust Company, National Association), including the form of global note evidencing the 3.625% Senior Notes Due 2023 (filed as Exhibit 4.1 to the combined Current Report on Form 8-K of the General Partner and the Partnership as filed with the SEC on March 15, 2013, and incorporated herein by this reference).
4.3(iv)						Twelfth Supplemental Indenture, dated as of November 17, 2014, by and between the Partnership and The Bank of New York Mellon Trust Company, N.A. (as successor to J.P. Morgan Trust Company, National Association), including the form of global note evidencing the 3.75% Senior Notes Due 2024 (filed as Exhibit 4.1 to the combined Current Report on Form 8-K of the General Partner and the Partnership as filed with the SEC on November 17, 2014, and incorporated herein by this reference).
4.3(v)						Thirteenth Supplemental Indenture, dated as of June 23, 2016, by and between the Partnership and The Bank of New York Mellon Trust Company, N.A. (as successor to J.P. Morgan Trust Company, National Association), as trustee, including the form of global note evidencing the 3.250% Senior Notes Due 2026 (filed as Exhibit 4.1 to the combined Current Report on Form 8-K of the General Partner and the Partnership as filed with the SEC on June 23, 2016, and incorporated herein by this reference).
4.3(vi)						Fourteenth Supplemental Indenture, dated as of December 12, 2017, by and between the Partnership and The Bank of New York Mellon Trust Company, N.A. (as successor to J.P. Morgan Trust Company, National Association), including the form of global note evidencing the 3.75% Senior Notes Due 2027 (filed as Exhibit 4.1 to the combined Current Report on Form 8-K of the General Partner and the Partnership as filed with the SEC on December 12, 2017, and incorporated herein by this reference).
4.3(vii)						Fifteenth Supplemental Indenture, dated as of September 11, 2018, by and between the Partnership and The Bank of New York Mellon Trust Company, N.A. (as successor to J.P. Morgan Trust Company, National Association), including the form of global note evidencing the 4.000% Senior Notes Due 2028 (filed as Exhibit 4.1 to the combined Current Report on Form 8-K of the General Partner and the Partnership as filed with the SEC on September 11, 2018, and incorporated herein by this reference).
4.3(viii)						Sixteenth Supplemental Indenture, dated as of November 15, 2019 by and between the Partnership and The Bank of New York Mellon Trust Company, N.A. (as successor to J.P. Morgan Trust Company, National Association), including the form of global note evidencing the 2.875% Senior Notes Due 2029 (filed as Exhibit 4.1 to the combined Current Report on Form 8-K of the General Partner and the Partnership as filed with the SEC on November 15, 2019, and incorporated herein by this reference).
4.3(ix)						Seventeenth Supplemental Indenture, dated as of February 21, 2020 by and between the Partnership and The Bank of New York Mellon Trust Company, N.A. (as successor to J.P. Morgan Trust Company, National Association), including the form of global note evidencing the 3.05% Senior Notes Due 2050 (filed as Exhibit 4.1 to the combined Current Report on Form 8-K of the General Partner and the Partnership, filed with the SEC on February 21, 2020, and incorporated herein by this reference).
4.3(x)						Eighteenth Supplemental Indenture, dated as of June 29, 2020 by and between the Partnership and The Bank of New York Mellon Trust Company, N.A. (as successor to J.P. Morgan Trust Company, National Association), including the form of global note evidencing the 1.75% Senior Notes Due 2030 (filed as Exhibit 4.1 to the combined Current Report on Form 8-K of the General Partner and the Partnership, filed with the SEC on June 29, 2020, and incorporated herein by this reference).
4.3(xi)						Nineteenth Supplemental Indenture, dated as of January 21, 2021, by and between the Partnership and The Bank of New York Mellon Trust Company, N.A. (as successor to J.P. Morgan Trust Company, National Association), including the form of global note evidencing the 1.750% Senior Notes Due 2031 (filed as Exhibit 4.1 to the combined Current Report on Form 8-K of the General Partner and the Partnership as filed with the SEC on January 21, 2021, and incorporated herein by this reference).
4.3(xii)						Twentieth Supplemental Indenture, dated as of November 10, 2021, by and between the Partnership and The Bank of New York Mellon Trust Company, N.A. (as successor to J.P. Morgan Trust Company, National Association), including the form of global note evidencing the 2.250% Senior Notes due 2032 (filed as Exhibit 4.1 to the combined Current Report on Form 8-K of the General Partner and the Partnership, filed with the SEC on November 12, 2021, and incorporated herein by this reference).
4.4						Description of Securities (filed as Exhibit 4.4 to the combined Annual Report on Form 10-K of the General Partner and Partnership as filed with the SEC on February 25, 2020, and incorporated herein by this reference).
10.1(i)						The General Partner's 2015 Long-Term Incentive Plan (filed as Exhibit 10.1 to the General Partner’s Current Report on Form 8-K as filed with the SEC on May 4, 2015, and incorporated herein by this reference).#
10.1(ii)						Form of LTIP Unit Award Agreement (filed as Exhibit 10.1 to the combined Quarterly Report on Form 10-Q of the General Partner and the Partnership as filed with the SEC on May 1, 2020, and incorporated herein by this reference). #

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10.1(iii)						Form of Restricted Stock Unit Award Certificate for non-employee directors under the General Partner's 2015 Long-Term Incentive Plan (filed as Exhibit 10.2 to the combined Quarterly Report on Form 10-Q of the General Partner and the Partnership as filed with the SEC on May 1, 2020, and incorporated herein by this reference). #
10.1(iv)						Form of Restricted Stock Unit Award Certificate under the General Partner's 2015 Long-Term Incentive Plan (filed as Exhibit 10.3 to the combined Quarterly Report on Form 10-Q of the General Partner and the Partnership as filed with the SEC on May 1, 2020, and incorporated herein by this reference). #
10.2(i)						The General Partner's 2000 Performance Share Plan, Amended and Restated as of January 30, 2008, a sub-plan of the 2015 Long-Term Incentive Plan (filed as Exhibit 10.4(i) to the combined Annual Report on Form 10-K of the General Partner and the Partnership as filed with the SEC on February 22, 2013, and incorporated herein by this reference).#
10.2(ii)						Amendment to the 2004 Award Agreement under the General Partner's 2000 Performance Share Plan (filed as Exhibit 10.4(ii) to the combined Annual Report on Form 10-K of the General Partner and the Partnership as filed with the SEC on February 22, 2013, and incorporated herein by this reference).#
10.3(i)						The General Partner's 2010 Performance Share Plan, a sub-plan of the 2015 Long-Term Incentive Plan (filed as Exhibit 10.5(i) to the combined Annual Report on Form 10-K of the General Partner and the Partnership as filed with the SEC on February 22, 2013, and incorporated herein by this reference).#

10.3(ii)						First Amendment to the General Partner's 2010 Performance Share Plan, a sub-plan of the 2015 Long-Term Incentive Plan (filed as Exhibit 10.1 to the General Partner’s Current Report on Form 8-K as filed with the SEC on January 29, 2015, and incorporated herein by this reference).#
10.3(iii)						Form of Award Certificate under the General Partner's 2010 Performance Share Plan, a sub-plan of the 2015 Long-Term Incentive Plan (filed as Exhibit 10.4 to the combined Quarterly Report on Form 10-Q of the General Partner and the Partnership as filed with the SEC on May 1, 2020, and incorporated herein by this reference).#
10.3(iv)						Form of 2010 Performance Share Plan LTIP Unit Award Agreement (filed as Exhibit 10.5 to the combined Quarterly Report on Form 10-Q of the General Partner and the Partnership as filed with the SEC on May 1, 2020, and incorporated herein by this reference).#

10.4(i)						Executives' Deferred Compensation Plan of Duke Realty Services Limited Partnership, Amended and Restated as of December 5, 2007 (filed as Exhibit 10.13(i) to the combined Annual Report on Form 10-K of the General Partner and the Partnership as filed with the SEC on February 22, 2013, and incorporated herein by this reference).#
10.4(ii)						Amendment Number One to the Executives' Deferred Compensation Plan of Duke Realty Services Limited Partnership, Amended and Restated as of December 5, 2007 (filed as Exhibit 10.13(ii) to the combined Annual Report on Form 10-K of the General Partner and the Partnership as filed with the SEC on February 22, 2013, and incorporated herein by this reference).#
10.5						The General Partner's Directors' Deferred Compensation Plan, Amended and Restated as of January 30, 2008 (filed as Exhibit 10.14 to the combined Annual Report on Form 10-K of the General Partner and the Partnership as filed with the SEC on February 22, 2013, and incorporated herein by this reference).#
10.6						The General Partner’s 2015 Non-Employee Directors Compensation Plan, a sub-plan of the 2015 Long-Term Incentive Plan (filed as Exhibit 10.5 to the combined Quarterly Report on Form 10-Q of the General Partner and the Partnership, as filed with the SEC on May 1, 2015, and incorporated herein by this reference).#
10.7						Form of Amended and Restated Severance Agreement between the Company and its executive officers (filed as Exhibit 10.1 to the combined Current Report on Form 8-K of the General Partner and the Partnership as filed with the SEC on January 31, 2019, and incorporated herein by this reference).#

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10.8						Amended and Restated Revolving Credit Agreement, dated March 26, 2021, by and among the Partnership, the General Partner, JPMorgan Chase Bank, N.A. and Wells Fargo Securities, LLC as Joint Lead Arrangers and Joint Book Runners, with JPMorgan Chase Bank, N.A. as Administrative Agent; Wells Fargo Bank, National Association as Syndication Agent; The Bank of Nova Scotia and Regions Capital Markets, a Division of Regions Bank, as Joint Lead Arrangers; The Bank of Nova Scotia, Barclays Bank PLC, Citibank N.A., Morgan Stanley Senior Funding, Inc., PNC Bank, National Association, Regions Bank, Royal Bank of Canada, Truist Bank and U.S. Bank National Association as Documentation Agents, and the several banks, financial institutions and other entities from time to time parties thereto as lenders (filed as Exhibit 10.1 to the combined Current Report on Form 8-K of the General Partner and the Partnership as filed with the SEC on March 29, 2021, and incorporated herein by this reference).
10.9						Amended and Restated Guaranty, dated October 11, 2017 by the General Partner (filed as Exhibit 10.2 to the Combined Current Report on Form 8-K of the General Partner and the Partnership as filed with the SEC on October 12, 2017, and incorporated herein by this reference).
10.10						Equity Distribution Agreement, dated August 2, 2019, by and among the General Partner, the Partnership, BTIG LLC, Citigroup Global Markets Inc., Jefferies LLC, Morgan Stanley & Co. LLC, Regions Securities LLC, SunTrust Robinson Humphrey, Inc., UBS Securities LLC, and Wells Fargo Securities, LLC (filed as Exhibit 1.1 to the combined Current Report on Form 8-K of the General Partner and the Partnership as filed with the SEC on August 2, 2019, and incorporated herein by this reference).
10.11						Equity Distribution Agreement, dated February 19, 2021, by and among the Company, the Partnership and each Agent and its related Forward Purchaser (filed as Exhibit 1.1 to the combined Current Report on Form 8-K of the General Partner and the Partnership as filed with the SEC on February 19, 2021, and incorporated herein by this reference).
10.12						Form of Master Confirmation (filed as Exhibit 1.2 to the combined Current Report on Form 8-K of the General Partner and the Partnership as filed with the SEC on February 19, 2021, and incorporated herein by this reference).
10.13						Amended and Restated Guaranty, dated March 26, 2021, by the General Partner (filed as Exhibit 10.2 to the Combined Current Report on Form 8-K of the General Partner and the Partnership as filed with the SEC on March 29, 2021, and incorporated herein by this reference).

21.1						List of the Company's Subsidiaries.*
23.1						Consent of KPMG LLP relating to the General Partner.*
23.2						Consent of KPMG LLP relating to the Partnership.*
24.1						Executed Powers of Attorney of certain directors.*
31.1						Rule 13a-14(a) Certification of the Chief Executive Officer of the General Partner.*
31.2						Rule 13a-14(a) Certification of the Chief Financial Officer of the General Partner.*
31.3						Rule 13a-14(a) Certification of the Chief Executive Officer for the Partnership.*
31.4						Rule 13a-14(a) Certification of the Chief Financial Officer for the Partnership.*
32.1						Section 1350 Certification of the Chief Executive Officer of the General Partner. * **
32.2						Section 1350 Certification of the Chief Financial Officer of the General Partner. * **
32.3						Section 1350 Certification of the Chief Executive Officer for the Partnership. * **
32.4						Section 1350 Certification of the Chief Financial Officer for the Partnership. * **
99.1						Federal Income Tax Considerations.*
101.Def						Definition Linkbase Document
101.Pre						Presentation Linkbase Document
101.Lab						Labels Linkbase Document
101.Cal						Calculation Linkbase Document
101.Sch						Schema Document
101.Ins						Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
104						Cover Page Interactive Data File (embedded within the Inline XBRL document and contained in Exhibit 101)

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

# Represents management contract or compensatory plan or arrangement.

* Filed herewith.

** The certifications attached as Exhibits 32.1, 32.2, 32.3 and 32.4 accompany this Report and are "furnished" to the Securities and Exchange Commission pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed "filed" by the General Partner or the Partnership, respectively, for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

We will furnish to any security holder, upon written request, copies of any exhibit incorporated by reference, for a fee of 15 cents per page, to cover the costs of furnishing the exhibits. Written requests should include a representation that the person making the request was the beneficial owner of securities entitled to vote at the Annual Meeting of Shareholders.

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DUKE REALTY CORPORATION AND DUKE REALTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

						DUKE REALTY CORPORATION
						/s/ James B. Connor
						James B. Connor
						Chairman and Chief Executive Officer
						(Principal Executive Officer)
						/s/ Mark A. Denien
						Mark A. Denien
						Executive Vice President and Chief Financial Officer
						(Principal Financial and Accounting Officer)

						DUKE REALTY LIMITED PARTNERSHIP
						By: DUKE REALTY CORPORATION, its general partner
						/s/ James B. Connor
						James B. Connor
						Chairman and Chief Executive Officer of the General Partner
						(Principal Executive Officer)
						/s/ Mark A. Denien
						Mark A. Denien
						Executive Vice President and Chief Financial Officer of the General Partner
						(Principal Financial and Accounting Officer)
Date:			February 18, 2022

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DUKE REALTY CORPORATION AND DUKE REALTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. 

Signature

Date

Title

/s/ James B. Connor

2/18/2022

Chairman and Chief Executive Officer (Principal Executive Officer)

James B. Connor

/s/ Mark A. Denien

2/18/2022

Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)

Mark A. Denien

/s/ John P. Case*

2/18/2022

Director

John P. Case

/s/ Kelly T. Killingsworth*

2/18/2022

Director

Kelly T. Killingsworth

/s/ Tamara D. Fischer*

2/18/2022

Director

Tamara D. Fischer*

/s/ Norman K. Jenkins*

2/18/2022

Director

Norman K. Jenkins

/s/ Melanie R. Sabelhaus*

2/18/2022

Director

Melanie R. Sabelhaus

/s/ Peter M. Scott III*

2/18/2022

Director

Peter M. Scott III

/s/ David P. Stockert*

2/18/2022

Director

David P. Stockert

/s/ Chris T. Sultemeier*

2/18/2022

Director

Chris T. Sultemeier

/s/ Michael E. Szymanczyk*

2/18/2022

Director

Michael E. Szymanczyk

/s/ Warren M.Thompson*

2/18/2022

Director

Warren M. Thompson

/s/ Lynn C. Thurber*

2/18/2022

Director

Lynn C. Thurber

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DUKE REALTY CORPORATION AND DUKE REALTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

*

By James B. Connor, Attorney-in-Fact

/s/ James B. Connor

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