Analyst Note
| Kevin Brown |Second-quarter results were slightly ahead of our expectations for Duke Realty, though we don't currently anticipate any material changes to our $36 fair value estimate for the no-moat company. Same-store occupancy came in at 98.0% in the second quarter, in line with our estimate and a 10-basis point improvement over the first-quarter figure. Cash leasing spreads were a very healthy 19.2%, though we will note that the high number was driven by the company seeing far more renewal leases, which typically see much higher leasing spreads, than new leases in the quarter when the number is usually balanced between the two. Same-store net operating income was up 5.5% in the second quarter, which was ahead of our estimate of 4.5% growth. As a result, core funds from operations came in at $0.44 for the second quarter, 6 cents higher than the $0.38 reported in the second quarter of 2020 and 4 cents higher than our $0.40 estimate for the quarter.