UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)


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

For the quarterly period ended ~~June 30, 2020~~March 31, 2021


☐			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 ~~Symbols~~Symbol(s)

Name of Exchange on Which Registered

Duke Realty Corporation

Common Stock, $0.01 par value

DRE

New York Stock Exchange

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.

Duke Realty Corporation:

Large accelerated filer

☒

Accelerated filer ☐

Non-accelerated filer ☐

Smaller reporting company ☐

Emerging growth company ☐

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. ☐

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 number of shares of Duke Realty Corporation's common stock outstanding at ~~July 29, 2020~~April 28, 2021 was ~~370,561,785.~~374,985,270.

EXPLANATORY NOTE

This report (the "Report") combines the quarterly reports on Form 10-Q for the period ended ~~June 30, 2020~~March 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 approximately ~~99.1%~~99.0% of the common partnership interests of the Partnership ("General Partner Units") as of ~~June 30, 2020.~~March 31, 2021. The remaining ~~0.9%~~1.0% 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 quarterly reports on Form 10-Q 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.

DUKE REALTY CORPORATION/DUKE REALTY LIMITED PARTNERSHIP

INDEX

Page

Part I - Financial Information

Item 1.

Financial Statements

Duke Realty Corporation:

Consolidated Balance Sheets - ~~June 30, 2020~~March 31 , 202 1 (Unaudited) and December 31, ~~2019~~2020

Consolidated Statements of Operations and Comprehensive Income (Unaudited) - Three ~~and Six~~ Months Ended ~~June 30, 2020~~March 31, 2021 and ~~2019~~20 20

Consolidated Statements of Cash Flows (Unaudited) - ~~Six~~Three Months Ended ~~June 30, 2020~~March 31, 2021 and ~~2019~~2020

Consolidated Statements of Changes in Equity (Unaudited) - Three ~~and Six~~ Months Ended ~~June 30, 2020~~March 31, 2021 and ~~2019~~2020

Duke Realty Limited Partnership:

Consolidated Balance Sheets - ~~June 30, 2020~~March 31, 2021 (Unaudited) and December 31, ~~2019~~2020

Consolidated Statements of Operations and Comprehensive Income (Unaudited) - Three ~~and Six~~ Months Ended ~~June 30, 2020~~March 31, 2021 and ~~2019~~2020

Consolidated Statements of Cash Flows (Unaudited) - ~~Six~~Three Months Ended ~~June 30, 2020~~March 31, 2021 and ~~2019~~2020

Consolidated Statements of Changes in Equity (Unaudited) - Three ~~and Six~~ Months Ended ~~June 30, 2020~~March 31, 2021 and ~~2019~~2020

Duke Realty Corporation and Duke Realty Limited Partnership:

Notes to Consolidated Financial Statements (Unaudited)

Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

4641

Item 4.

Controls and Procedures

4642

Part II - Other Information

Unregistered Sales of Equity Securities and Use of Proceeds

4943

Item 3.

Defaults Upon Senior Securities

5043

Item 4.

Mine Safety Disclosures

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

DUKE REALTY CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets

(in thousands, except per share amounts)


		June 30, 2020		December 31, 2019			March 31, 2021		December 31, 2020
		(Unaudited)					(Unaudited)
ASSETS	ASSETS					ASSETS
Real estate investments:	Real estate investments:					Real estate investments:
Real estate assets	Real estate assets	$	8,293,907	$	7,993,377	Real estate assets	$	8,855,987	$	8,745,155
Construction in progress	Construction in progress	584,138		550,926		Construction in progress	856,496		695,219
Investments in and advances to unconsolidated joint ventures	Investments in and advances to unconsolidated joint ventures	133,795		133,074		Investments in and advances to unconsolidated joint ventures	128,010		131,898
Undeveloped land	Undeveloped land	350,226		254,537		Undeveloped land	294,855		291,614
		9,362,066		8,931,914			10,135,348		9,863,886
Accumulated depreciation	Accumulated depreciation	(1,590,546)		(1,480,461)		Accumulated depreciation	(1,705,011)		(1,659,308)
Net real estate investments	Net real estate investments	7,771,520		7,451,453		Net real estate investments	8,430,337		8,204,578

Real estate investments and other assets held-for-sale	Real estate investments and other assets held-for-sale	—		18,463		Real estate investments and other assets held-for-sale	0		67,946

Cash and cash equivalents	Cash and cash equivalents	29,870		110,891		Cash and cash equivalents	9,009		6,309
Accounts receivable	Accounts receivable	16,869		20,349		Accounts receivable	16,925		15,204
Straight-line rent receivable	Straight-line rent receivable	138,251		129,344		Straight-line rent receivable	162,198		153,943
Receivables on construction contracts, including retentions	Receivables on construction contracts, including retentions	53,769		25,607		Receivables on construction contracts, including retentions	27,221		30,583
Deferred leasing and other costs, net of accumulated amortization of $211,458 and $203,857		314,715		320,444
Deferred leasing and other costs, net of accumulated amortization of $209,713 and $204,122						Deferred leasing and other costs, net of accumulated amortization of $209,713 and $204,122	340,539		329,765
Restricted cash held in escrow for like-kind exchange	Restricted cash held in escrow for like-kind exchange	—		1,673		Restricted cash held in escrow for like-kind exchange	0		47,682
Notes receivable from property sales		—		110,000

Other escrow deposits and other assets	Other escrow deposits and other assets	242,015		232,338		Other escrow deposits and other assets	309,218		255,384
		$	8,567,009	$	8,420,562		$	9,295,447	$	9,111,394
LIABILITIES AND EQUITY	LIABILITIES AND EQUITY					LIABILITIES AND EQUITY
Indebtedness:	Indebtedness:					Indebtedness:
Secured debt, net of deferred financing costs of $363 and $164		$	50,274	$	34,023
Unsecured debt, net of deferred financing costs of $33,828 and $19,258		3,024,912		2,880,742

Secured debt, net of deferred financing costs of $333 and $343						Secured debt, net of deferred financing costs of $333 and $343	$	63,007	$	64,074
Unsecured debt, net of deferred financing costs of $38,856 and $32,763						Unsecured debt, net of deferred financing costs of $38,856 and $32,763	3,469,884		3,025,977
Unsecured line of credit						Unsecured line of credit	0		295,000
		3,075,186		2,914,765			3,532,891		3,385,051

Liabilities related to real estate investments held-for-sale	Liabilities related to real estate investments held-for-sale	—		887		Liabilities related to real estate investments held-for-sale	0		7,740

Construction payables and amounts due subcontractors, including retentions	Construction payables and amounts due subcontractors, including retentions	111,844		68,840		Construction payables and amounts due subcontractors, including retentions	88,811		62,332
Accrued real estate taxes	Accrued real estate taxes	79,204		69,042		Accrued real estate taxes	80,909		76,501
Accrued interest	Accrued interest	15,450		14,181		Accrued interest	27,605		18,363
Other liabilities	Other liabilities	181,978		223,680		Other liabilities	245,940		269,806

Tenant security deposits and prepaid rents	Tenant security deposits and prepaid rents	45,931		48,907		Tenant security deposits and prepaid rents	60,150		57,153
Total liabilities	Total liabilities	3,509,593		3,340,302		Total liabilities	4,036,306		3,876,946
Shareholders' equity:	Shareholders' equity:					Shareholders' equity:

Common shares ($0.01 par value); 600,000 shares authorized; 370,366 and 367,950 shares issued and outstanding, respectively		3,704		3,680
Common shares ($0.01 par value); 600,000 shares authorized; 374,306 and 373,258 shares issued and outstanding, respectively						Common shares ($0.01 par value); 600,000 shares authorized; 374,306 and 373,258 shares issued and outstanding, respectively	3,743		3,733
Additional paid-in capital	Additional paid-in capital	5,607,897		5,525,463		Additional paid-in capital	5,756,738		5,723,326
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(33,346)		(35,036)		Accumulated other comprehensive loss	(30,679)		(31,568)
Distributions in excess of net income	Distributions in excess of net income	(590,435)		(475,992)		Distributions in excess of net income	(548,843)		(532,519)
Total shareholders' equity	Total shareholders' equity	4,987,820		5,018,115		Total shareholders' equity	5,180,959		5,162,972
Noncontrolling interests	Noncontrolling interests	69,596		62,145		Noncontrolling interests	78,182		71,476
Total equity	Total equity	5,057,416		5,080,260		Total equity	5,259,141		5,234,448
		$	8,567,009	$	8,420,562		$	9,295,447	$	9,111,394

See accompanying Notes to Consolidated Financial Statements

DUKE REALTY CORPORATION AND SUBSIDIARIES

Consolidated Statements of Operations and Comprehensive Income

For the three ~~and six~~ months ended ~~June 30,~~March 31,

(in thousands, except per share amounts)

(Unaudited)


		Three Months Ended						Six Months Ended							Three Months Ended
		2020		2019		2020		2019			2021		2020
Revenues:	Revenues:									Revenues:
Rental and related revenue	Rental and related revenue	$	226,374	$	213,107	$	445,129	$	423,072	Rental and related revenue	$	258,179	$	218,755
General contractor and service fee revenue	General contractor and service fee revenue	12,137		23,919		19,751		78,883		General contractor and service fee revenue	31,113		7,614
		238,511		237,026		464,880		501,955			289,292		226,369
Expenses:	Expenses:									Expenses:
Rental expenses	Rental expenses	17,557		17,597		36,400		38,265		Rental expenses	28,130		18,843
Real estate taxes	Real estate taxes	36,763		32,375		73,490		64,817		Real estate taxes	41,170		36,727
General contractor and other services expenses	General contractor and other services expenses	10,406		23,189		16,974		75,775		General contractor and other services expenses	29,463		6,568
Depreciation and amortization	Depreciation and amortization	86,704		83,004		172,063		158,996		Depreciation and amortization	93,573		85,359
		151,430		156,165		298,927		337,853			192,336		147,497
Other operating activities:	Other operating activities:									Other operating activities:
Equity in earnings of unconsolidated joint ventures	Equity in earnings of unconsolidated joint ventures	2,396		4,143		4,935		8,858		Equity in earnings of unconsolidated joint ventures	16,268		2,539

Gain on sale of properties	Gain on sale of properties	—		30,592		8,937		30,429		Gain on sale of properties	21,360		8,937
Gain on land sales	Gain on land sales	6,070		1,950		6,205		2,700		Gain on land sales	1,238		135
Other operating expenses	Other operating expenses	(1,546)		(1,518)		(2,658)		(3,641)		Other operating expenses	(1,145)		(1,112)
Impairment charges	Impairment charges	—		—		(5,626)		—		Impairment charges	0		(5,626)
Non-incremental costs related to successful leases	Non-incremental costs related to successful leases	(4,034)		(3,447)		(6,559)		(5,603)		Non-incremental costs related to successful leases	(2,958)		(2,525)
General and administrative expenses	General and administrative expenses	(13,606)		(13,420)		(35,369)		(35,403)		General and administrative expenses	(24,217)		(21,763)
		(10,720)		18,300		(30,135)		(2,660)			10,546		(19,415)
Operating income	Operating income	76,361		99,161		135,818		161,442		Operating income	107,502		59,457
Other income (expenses):	Other income (expenses):									Other income (expenses):
Interest and other income, net	Interest and other income, net	216		2,534		1,611		5,292		Interest and other income, net	463		1,395
Interest expense	Interest expense	(22,841)		(23,510)		(46,335)		(45,642)		Interest expense	(22,507)		(23,494)
Loss on debt extinguishment	Loss on debt extinguishment	(14,972)		—		(32,778)		(13)		Loss on debt extinguishment	(70)		(17,806)
Gain on involuntary conversion		1,283		—		1,283		2,259

Income from continuing operations before income taxes	Income from continuing operations before income taxes	40,047		78,185		59,599		123,338		Income from continuing operations before income taxes	85,388		19,552
Income tax benefit (expense)		150		(6,616)		210		(7,001)
Income tax (expense) benefit										Income tax (expense) benefit	(5,184)		60
Income from continuing operations	Income from continuing operations	40,197		71,569		59,809		116,337		Income from continuing operations	80,204		19,612
Discontinued operations:	Discontinued operations:									Discontinued operations:

Gain on sale of properties	Gain on sale of properties	23		99		71		254		Gain on sale of properties	0		48

Income from discontinued operations	Income from discontinued operations	23		99		71		254		Income from discontinued operations	0		48
Net income	Net income	40,220		71,668		59,880		116,591		Net income	80,204		19,660

Net income attributable to noncontrolling interests	Net income attributable to noncontrolling interests	(400)		(615)		(604)		(987)		Net income attributable to noncontrolling interests	(842)		(204)
Net income attributable to common shareholders	Net income attributable to common shareholders	$	39,820	$	71,053	$	59,276	$	115,604	Net income attributable to common shareholders	$	79,362	$	19,456
Basic net income per common share:	Basic net income per common share:									Basic net income per common share:
Continuing operations attributable to common shareholders	Continuing operations attributable to common shareholders	$	0.11	$	0.20	$	0.16	$	0.32	Continuing operations attributable to common shareholders	$	0.21	$	0.05

Diluted net income per common share:	Diluted net income per common share:									Diluted net income per common share:
Continuing operations attributable to common shareholders	Continuing operations attributable to common shareholders	$	0.11	$	0.20	$	0.16	$	0.32	Continuing operations attributable to common shareholders	$	0.21	$	0.05

Weighted average number of common shares outstanding	Weighted average number of common shares outstanding	368,836		359,681		368,513		359,412		Weighted average number of common shares outstanding	373,667		368,190
Weighted average number of common shares and potential dilutive securities	Weighted average number of common shares and potential dilutive securities	372,573		362,926		372,197		362,615		Weighted average number of common shares and potential dilutive securities	377,744		371,870

Comprehensive income:	Comprehensive income:									Comprehensive income:
Net income	Net income	$	40,220	$	71,668	$	59,880	$	116,591	Net income	$	80,204	$	19,660
Other comprehensive income (loss):
Unrealized losses on interest rate swap contracts		—		(14,699)		—		(24,041)
Other comprehensive income:										Other comprehensive income:

Amortization of interest rate swap contracts	Amortization of interest rate swap contracts	889		—		1,690		—		Amortization of interest rate swap contracts	889		801
Comprehensive income	Comprehensive income	$	41,109	$	56,969	$	61,570	$	92,550	Comprehensive income	$	81,093	$	20,461

See accompanying Notes to Consolidated Financial Statements

DUKE REALTY CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the ~~six~~three months ended ~~June 30,~~March 31,

(in thousands)

(Unaudited)


		Six Months Ended							Three Months Ended
		2020		2019			2021		2020
Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net income	Net income	$	59,880	$	116,591	Net income	$	80,204	$	19,660
Adjustments to reconcile net income to net cash provided by operating activities:	Adjustments to reconcile net income to net cash provided by operating activities:					Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of buildings and tenant improvements	Depreciation of buildings and tenant improvements	143,922		131,878		Depreciation of buildings and tenant improvements	79,062		71,582
Amortization of deferred leasing and other costs	Amortization of deferred leasing and other costs	28,141		27,118		Amortization of deferred leasing and other costs	14,511		13,777
Amortization of deferred financing costs	Amortization of deferred financing costs	4,477		3,121		Amortization of deferred financing costs	2,439		2,219
Straight-line rental income and expense, net	Straight-line rental income and expense, net	(8,476)		(10,466)		Straight-line rental income and expense, net	(8,021)		(1,703)
Impairment charges	Impairment charges	5,626		—		Impairment charges	0		5,626
Loss on debt extinguishment	Loss on debt extinguishment	32,778		13		Loss on debt extinguishment	70		17,806

Gain on involuntary conversion		(1,283)		(2,259)

Gain on land and property sales	Gain on land and property sales	(15,213)		(33,383)		Gain on land and property sales	(22,598)		(9,120)
Third-party construction contracts, net	Third-party construction contracts, net	(3,717)		15,645		Third-party construction contracts, net	749		(780)
Other accrued revenues and expenses, net	Other accrued revenues and expenses, net	11,460		10,021		Other accrued revenues and expenses, net	14,651		(6,738)
Operating distributions received in excess of (less than) equity in earnings from unconsolidated joint ventures		3,563		(487)
Equity in earnings (in excess of) less than operating distributions received from unconsolidated joint ventures						Equity in earnings (in excess of) less than operating distributions received from unconsolidated joint ventures	(10,925)		2,221
Net cash provided by operating activities	Net cash provided by operating activities	261,158		257,792		Net cash provided by operating activities	150,142		114,550
Cash flows from investing activities:	Cash flows from investing activities:					Cash flows from investing activities:
Development of real estate investments	Development of real estate investments	(333,212)		(205,315)		Development of real estate investments	(140,432)		(170,900)
Acquisition of buildings and related intangible assets	Acquisition of buildings and related intangible assets	—		(108,201)		Acquisition of buildings and related intangible assets	(34,738)		0
Acquisition of land and other real estate assets	Acquisition of land and other real estate assets	(95,859)		(200,872)		Acquisition of land and other real estate assets	(64,594)		(87,023)
Second generation tenant improvements, leasing costs and building improvements	Second generation tenant improvements, leasing costs and building improvements	(17,062)		(20,463)		Second generation tenant improvements, leasing costs and building improvements	(14,676)		(8,105)
Other deferred leasing costs	Other deferred leasing costs	(17,306)		(11,152)		Other deferred leasing costs	(8,007)		(12,341)
Other assets	Other assets	(10,289)		(7,224)		Other assets	(36,844)		(15,040)
Proceeds from the repayments of notes receivable from property sales	Proceeds from the repayments of notes receivable from property sales	110,000		130,000		Proceeds from the repayments of notes receivable from property sales	0		110,000
Proceeds from land and property sales, net	Proceeds from land and property sales, net	34,509		97,526		Proceeds from land and property sales, net	85,479		27,081
Capital distributions from unconsolidated joint ventures	Capital distributions from unconsolidated joint ventures	13		—		Capital distributions from unconsolidated joint ventures	3,532		0
Capital contributions and advances to unconsolidated joint ventures	Capital contributions and advances to unconsolidated joint ventures	(4,833)		(5,962)		Capital contributions and advances to unconsolidated joint ventures	0		(2,353)
Net cash used for investing activities	Net cash used for investing activities	(334,039)		(331,663)		Net cash used for investing activities	(210,280)		(158,681)
Cash flows from financing activities:	Cash flows from financing activities:					Cash flows from financing activities:
Proceeds from issuance of common shares, net	Proceeds from issuance of common shares, net	76,678		42,128		Proceeds from issuance of common shares, net	30,381		5,465

Proceeds from unsecured debt	Proceeds from unsecured debt	663,123		—		Proceeds from unsecured debt	446,634		316,371
Payments on unsecured debt	Payments on unsecured debt	(546,972)		—		Payments on unsecured debt	(40,226)		(316,655)
Proceeds from secured debt financings	Proceeds from secured debt financings	18,400		—		Proceeds from secured debt financings	0		18,400
Payments on secured indebtedness including principal amortization	Payments on secured indebtedness including principal amortization	(1,906)		(43,502)		Payments on secured indebtedness including principal amortization	(1,007)		(876)
Borrowings on line of credit, net		—		222,000
(Repayments) borrowings on line of credit, net						(Repayments) borrowings on line of credit, net	(295,000)		200,000
Distributions to common shareholders	Distributions to common shareholders	(173,131)		(154,550)		Distributions to common shareholders	(95,310)		(86,562)

Distributions to noncontrolling interests, net		(1,566)		(1,180)
Distributions to noncontrolling interests						Distributions to noncontrolling interests	(1,092)		(783)
Tax payments on stock-based compensation awards	Tax payments on stock-based compensation awards	(4,051)		(5,469)		Tax payments on stock-based compensation awards	(4,754)		(4,051)

Change in book cash overdrafts	Change in book cash overdrafts	(14,444)		15,874		Change in book cash overdrafts	(14,430)		(14,444)
Other financing activities	Other financing activities	289		(9,920)		Other financing activities	(270)		289
Deferred financing costs	Deferred financing costs	(6,374)		—		Deferred financing costs	(9,800)		(3,971)
Net cash provided by financing activities	Net cash provided by financing activities	10,046		65,381		Net cash provided by financing activities	15,126		113,183
Net decrease in cash, cash equivalents and restricted cash		(62,835)		(8,490)
Net (decrease) increase in cash, cash equivalents and restricted cash						Net (decrease) increase in cash, cash equivalents and restricted cash	(45,012)		69,052
Cash, cash equivalents and restricted cash at beginning of period	Cash, cash equivalents and restricted cash at beginning of period	121,431		25,517		Cash, cash equivalents and restricted cash at beginning of period	67,223		121,431
Cash, cash equivalents and restricted cash at end of period	Cash, cash equivalents and restricted cash at end of period	$	58,596	$	17,027	Cash, cash equivalents and restricted cash at end of period	$	22,211	$	190,483

Non-cash activities:	Non-cash activities:					Non-cash activities:
Liabilities and right-of-use assets - operating leases		$	1,443	$	37,810
Lease liabilities arising from right-of-use assets						Lease liabilities arising from right-of-use assets	$	18,257	$	1,132
Assumption of indebtedness in real estate acquisitions						Assumption of indebtedness in real estate acquisitions	$	40,226	$	0

Non-cash distribution of assets from unconsolidated joint ventures, net						Non-cash distribution of assets from unconsolidated joint ventures, net	$	11,023	$	0

See accompanying Notes to Consolidated Financial Statements

DUKE REALTY CORPORATION AND SUBSIDIARIES

Consolidated Statements of Changes in Equity

For the three ~~and six~~ months ended ~~June 30,~~March 31, 2021 and 2020 ~~and 2019~~

(in thousands, except per share data)

(Unaudited)


		Common Shareholders																			Common Shareholders
		Common Stock		Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Distributions in Excess of Net Income		Noncontrolling Interests		Total			Common Stock		Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Distributions in Excess of Net Income		Noncontrolling Interests		Total
Balance at March 31, 2020		$	3,684	$	5,533,806	$	(34,235)	$	(543,412)	$	67,219	$	5,027,062
Balance at December 31, 2020														Balance at December 31, 2020	$	3,733	$	5,723,326	$	(31,568)	$	(532,519)	$	71,476	$	5,234,448
Net income	Net income	—		—		—		39,820		400		40,220		Net income	—		—		—		79,362		842		80,204
Other comprehensive income	Other comprehensive income	—		—		889		—		—		889		Other comprehensive income	—		—		889		—		—		889
Issuance of common shares	Issuance of common shares	20		71,193		—		—		—		71,213		Issuance of common shares	7		30,374		—		—		—		30,381
Stock-based compensation plan activity	Stock-based compensation plan activity	—		2,898		—		(274)		2,760		5,384		Stock-based compensation plan activity	3		3,038		—		(376)		6,956		9,621

Distributions to common shareholders ($0.235 per share)		—		—		—		(86,569)		—		(86,569)
Distributions to common shareholders ($0.255 per share)														Distributions to common shareholders ($0.255 per share)	—		—		—		(95,310)		—		(95,310)

Distributions to noncontrolling interests	Distributions to noncontrolling interests	—		—		—		—		(783)		(783)		Distributions to noncontrolling interests	—		—		—		—		(1,092)		(1,092)

Balance at June 30, 2020		$	3,704	$	5,607,897	$	(33,346)	$	(590,435)	$	69,596	$	5,057,416
Balance at March 31, 2021														Balance at March 31, 2021	$	3,743	$	5,756,738	$	(30,679)	$	(548,843)	$	78,182	$	5,259,141

Balance at December 31, 2019 $ 3,680 $ 5,525,463 $ (35,036) $ (475,992) $ 62,145 $ 5,080,260
Net income — — — 59,276 604 59,880
Other comprehensive income — — 1,690 — — 1,690
Issuance of common shares 21 76,657 — — — 76,678
Stock-based compensation plan activity 3 5,777 — (588) 8,413 13,605
Distributions to common shareholders ($0.47 per share) — — — (173,131) — (173,131)
Distributions to noncontrolling interests — — — — (1,566) (1,566)
Balance at June 30, 2020 $ 3,704 $ 5,607,897 $ (33,346) $ (590,435) $ 69,596 $ 5,057,416


		Common Shareholders																			Common Shareholders
		Common Stock		Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Distributions in Excess of Net Income		Noncontrolling Interests		Total			Common Stock		Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Distributions in Excess of Net Income		Noncontrolling Interests		Total
Balance at March 31, 2019		$	3,594	$	5,250,157	$	(14,018)	$	(618,123)	$	59,561	$	4,681,171
Balance at December 31, 2019														Balance at December 31, 2019	$	3,680	$	5,525,463	$	(35,036)	$	(475,992)	$	62,145	$	5,080,260
Net income	Net income	—		—		—		71,053		615		71,668		Net income	—		—		—		19,456		204		19,660
Other comprehensive loss		—		—		(14,699)		—		—		(14,699)
Other comprehensive income														Other comprehensive income	—		—		801		—		—		801
Issuance of common shares	Issuance of common shares	12		37,624		—		—		—		37,636		Issuance of common shares	1		5,464		—		—		—		5,465
Stock-based compensation plan activity	Stock-based compensation plan activity	—		2,601		—		(291)		2,023		4,333		Stock-based compensation plan activity	3		2,879		—		(314)		5,653		8,221

Distributions to common shareholders ($0.215 per share)		—		—		—		(77,313)		—		(77,313)
Distributions to common shareholders ($0.235 per share)														Distributions to common shareholders ($0.235 per share)	—		—		—		(86,562)		—		(86,562)

Distributions to noncontrolling interests	Distributions to noncontrolling interests	—		—		—		—		(675)		(675)		Distributions to noncontrolling interests	—		—		—		—		(783)		(783)

Balance at June 30, 2019		$	3,606	$	5,290,382	$	(28,717)	$	(624,674)	$	61,524	$	4,702,121
Balance at March 31, 2020														Balance at March 31, 2020	$	3,684	$	5,533,806	$	(34,235)	$	(543,412)	$	67,219	$	5,027,062

Balance at December 31, 2018 $ 3,589 $ 5,244,375 $ (4,676) $ (585,087) $ 55,042 $ 4,713,243
Net income — — — 115,604 987 116,591
Other comprehensive loss — — (24,041) — — (24,041)
Issuance of common shares 13 42,115 — — — 42,128
Stock-based compensation plan activity 4 3,892 — (641) 6,675 9,930
Contributions from noncontrolling interests — — — — 312 312
Distributions to common shareholders ($0.43 per share) — — — (154,550) — (154,550)
Distributions to noncontrolling interests — — — — (1,492) (1,492)
Balance at June 30, 2019 $ 3,606 $ 5,290,382 $ (28,717) $ (624,674) $ 61,524 $ 4,702,121

See accompanying Notes to Consolidated Financial Statements

DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES

Consolidated Balance Sheets

(in thousands)


		June 30, 2020		December 31, 2019			March 31, 2021		December 31, 2020
		(Unaudited)					(Unaudited)
ASSETS	ASSETS					ASSETS
Real estate investments:	Real estate investments:					Real estate investments:
Real estate assets	Real estate assets	$	8,293,907	$	7,993,377	Real estate assets	$	8,855,987	$	8,745,155

Construction in progress	Construction in progress	584,138		550,926		Construction in progress	856,496		695,219
Investments in and advances to unconsolidated joint ventures	Investments in and advances to unconsolidated joint ventures	133,795		133,074		Investments in and advances to unconsolidated joint ventures	128,010		131,898
Undeveloped land	Undeveloped land	350,226		254,537		Undeveloped land	294,855		291,614
		9,362,066		8,931,914			10,135,348		9,863,886
Accumulated depreciation	Accumulated depreciation	(1,590,546)		(1,480,461)		Accumulated depreciation	(1,705,011)		(1,659,308)
Net real estate investments	Net real estate investments	7,771,520		7,451,453		Net real estate investments	8,430,337		8,204,578

Real estate investments and other assets held-for-sale	Real estate investments and other assets held-for-sale	—		18,463		Real estate investments and other assets held-for-sale	0		67,946

Cash and cash equivalents	Cash and cash equivalents	29,870		110,891		Cash and cash equivalents	9,009		6,309
Accounts receivable	Accounts receivable	16,869		20,349		Accounts receivable	16,925		15,204
Straight-line rent receivable	Straight-line rent receivable	138,251		129,344		Straight-line rent receivable	162,198		153,943
Receivables on construction contracts, including retentions	Receivables on construction contracts, including retentions	53,769		25,607		Receivables on construction contracts, including retentions	27,221		30,583

Deferred leasing and other costs, net of accumulated amortization of $211,458 and $203,857		314,715		320,444
Deferred leasing and other costs, net of accumulated amortization of $209,713 and $204,122						Deferred leasing and other costs, net of accumulated amortization of $209,713 and $204,122	340,539		329,765
Restricted cash held in escrow for like-kind exchange	Restricted cash held in escrow for like-kind exchange	—		1,673		Restricted cash held in escrow for like-kind exchange	0		47,682
Notes receivable from property sales		—		110,000

Other escrow deposits and other assets	Other escrow deposits and other assets	242,015		232,338		Other escrow deposits and other assets	309,218		255,384
		$	8,567,009	$	8,420,562		$	9,295,447	$	9,111,394
LIABILITIES AND EQUITY	LIABILITIES AND EQUITY					LIABILITIES AND EQUITY
Indebtedness:	Indebtedness:					Indebtedness:
Secured debt, net of deferred financing costs of $363 and $164		$	50,274	$	34,023
Unsecured debt, net of deferred financing costs of $33,828 and $19,258		3,024,912		2,880,742

Secured debt, net of deferred financing costs of $333 and $343						Secured debt, net of deferred financing costs of $333 and $343	$	63,007	$	64,074
Unsecured debt, net of deferred financing costs of $38,856 and $32,763						Unsecured debt, net of deferred financing costs of $38,856 and $32,763	3,469,884		3,025,977
Unsecured line of credit						Unsecured line of credit	0		295,000
		3,075,186		2,914,765			3,532,891		3,385,051

Liabilities related to real estate investments held-for-sale	Liabilities related to real estate investments held-for-sale	—		887		Liabilities related to real estate investments held-for-sale	0		7,740

Construction payables and amounts due subcontractors, including retentions	Construction payables and amounts due subcontractors, including retentions	111,844		68,840		Construction payables and amounts due subcontractors, including retentions	88,811		62,332
Accrued real estate taxes	Accrued real estate taxes	79,204		69,042		Accrued real estate taxes	80,909		76,501
Accrued interest	Accrued interest	15,450		14,181		Accrued interest	27,605		18,363
Other liabilities	Other liabilities	181,978		223,680		Other liabilities	245,940		269,806

Tenant security deposits and prepaid rents	Tenant security deposits and prepaid rents	45,931		48,907		Tenant security deposits and prepaid rents	60,150		57,153
Total liabilities	Total liabilities	3,509,593		3,340,302		Total liabilities	4,036,306		3,876,946
Partners' equity:	Partners' equity:					Partners' equity:
Common equity (370,366 and 367,950 General Partner Units issued and outstanding, respectively)		5,021,166		5,053,151
Common equity (374,306 and 373,258 General Partner Units issued and outstanding, respectively)						Common equity (374,306 and 373,258 General Partner Units issued and outstanding, respectively)	5,211,638		5,194,540

Limited Partners' common equity (3,330 and 3,029 Limited Partner Units issued and outstanding, respectively)		64,948		57,575
Limited Partners' common equity (3,694 and 3,326 Limited Partner Units issued and outstanding, respectively)						Limited Partners' common equity (3,694 and 3,326 Limited Partner Units issued and outstanding, respectively)	73,649		66,874
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(33,346)		(35,036)		Accumulated other comprehensive loss	(30,679)		(31,568)
Total partners' equity	Total partners' equity	5,052,768		5,075,690		Total partners' equity	5,254,608		5,229,846
Noncontrolling interests	Noncontrolling interests	4,648		4,570		Noncontrolling interests	4,533		4,602
Total equity	Total equity	5,057,416		5,080,260		Total equity	5,259,141		5,234,448
		$	8,567,009	$	8,420,562		$	9,295,447	$	9,111,394

See accompanying Notes to Consolidated Financial Statements

DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES

Consolidated Statements of Operations and Comprehensive Income

For the three ~~and six~~ months ended ~~June 30,~~March 31,

(in thousands, except per unit amounts)

(Unaudited)


		Three Months Ended						Six Months Ended							Three Months Ended
		2020		2019		2020		2019			2021		2020
Revenues:	Revenues:									Revenues:
Rental and related revenue	Rental and related revenue	$	226,374	$	213,107	$	445,129	$	423,072	Rental and related revenue	$	258,179	$	218,755
General contractor and service fee revenue	General contractor and service fee revenue	12,137		23,919		19,751		78,883		General contractor and service fee revenue	31,113		7,614
		238,511		237,026		464,880		501,955			289,292		226,369
Expenses:	Expenses:									Expenses:
Rental expenses	Rental expenses	17,557		17,597		36,400		38,265		Rental expenses	28,130		18,843
Real estate taxes	Real estate taxes	36,763		32,375		73,490		64,817		Real estate taxes	41,170		36,727
General contractor and other services expenses	General contractor and other services expenses	10,406		23,189		16,974		75,775		General contractor and other services expenses	29,463		6,568
Depreciation and amortization	Depreciation and amortization	86,704		83,004		172,063		158,996		Depreciation and amortization	93,573		85,359
		151,430		156,165		298,927		337,853			192,336		147,497
Other operating activities:	Other operating activities:									Other operating activities:
Equity in earnings of unconsolidated joint ventures	Equity in earnings of unconsolidated joint ventures	2,396		4,143		4,935		8,858		Equity in earnings of unconsolidated joint ventures	16,268		2,539
Gain on sale of properties	Gain on sale of properties	—		30,592		8,937		30,429		Gain on sale of properties	21,360		8,937
Gain on land sales	Gain on land sales	6,070		1,950		6,205		2,700		Gain on land sales	1,238		135
Other operating expenses	Other operating expenses	(1,546)		(1,518)		(2,658)		(3,641)		Other operating expenses	(1,145)		(1,112)
Impairment charges	Impairment charges	—		—		(5,626)		—		Impairment charges	0		(5,626)
Non-incremental costs related to successful leases	Non-incremental costs related to successful leases	(4,034)		(3,447)		(6,559)		(5,603)		Non-incremental costs related to successful leases	(2,958)		(2,525)
General and administrative expenses	General and administrative expenses	(13,606)		(13,420)		(35,369)		(35,403)		General and administrative expenses	(24,217)		(21,763)
		(10,720)		18,300		(30,135)		(2,660)			10,546		(19,415)
Operating income	Operating income	76,361		99,161		135,818		161,442		Operating income	107,502		59,457
Other income (expenses):	Other income (expenses):									Other income (expenses):
Interest and other income, net	Interest and other income, net	216		2,534		1,611		5,292		Interest and other income, net	463		1,395
Interest expense	Interest expense	(22,841)		(23,510)		(46,335)		(45,642)		Interest expense	(22,507)		(23,494)
Loss on debt extinguishment	Loss on debt extinguishment	(14,972)		—		(32,778)		(13)		Loss on debt extinguishment	(70)		(17,806)
Gain on involuntary conversion		1,283		—		1,283		2,259

Income from continuing operations before income taxes	Income from continuing operations before income taxes	40,047		78,185		59,599		123,338		Income from continuing operations before income taxes	85,388		19,552
Income tax benefit (expense)		150		(6,616)		210		(7,001)
Income tax (expense) benefit										Income tax (expense) benefit	(5,184)		60
Income from continuing operations	Income from continuing operations	40,197		71,569		59,809		116,337		Income from continuing operations	80,204		19,612
Discontinued operations:	Discontinued operations:									Discontinued operations:

Gain on sale of properties	Gain on sale of properties	23		99		71		254		Gain on sale of properties	0		48

Income from discontinued operations	Income from discontinued operations	23		99		71		254		Income from discontinued operations	0		48
Net income	Net income	40,220		71,668		59,880		116,591		Net income	80,204		19,660

Net (income) loss attributable to noncontrolling interests		(44)		6		(78)		16
Net income attributable to noncontrolling interests										Net income attributable to noncontrolling interests	(81)		(34)
Net income attributable to common unitholders	Net income attributable to common unitholders	$	40,176	$	71,674	$	59,802	$	116,607	Net income attributable to common unitholders	$	80,123	$	19,626
Basic net income per Common Unit:	Basic net income per Common Unit:									Basic net income per Common Unit:
Continuing operations attributable to common unitholders	Continuing operations attributable to common unitholders	$	0.11	$	0.20	$	0.16	$	0.32	Continuing operations attributable to common unitholders	$	0.21	$	0.05

Diluted net income per Common Unit:	Diluted net income per Common Unit:									Diluted net income per Common Unit:
Continuing operations attributable to common unitholders	Continuing operations attributable to common unitholders	$	0.11	$	0.20	$	0.16	$	0.32	Continuing operations attributable to common unitholders	$	0.21	$	0.05

Weighted average number of Common Units outstanding	Weighted average number of Common Units outstanding	372,167		362,826		371,790		362,517		Weighted average number of Common Units outstanding	377,242		371,414
Weighted average number of Common Units and potential dilutive securities	Weighted average number of Common Units and potential dilutive securities	372,573		362,926		372,197		362,615		Weighted average number of Common Units and potential dilutive securities	377,744		371,870

Comprehensive income:	Comprehensive income:									Comprehensive income:
Net income	Net income	$	40,220	$	71,668	$	59,880	$	116,591	Net income	$	80,204	$	19,660
Other comprehensive income (loss):
Unrealized losses on interest rate swap contracts		—		(14,699)		—		(24,041)
Other comprehensive income:										Other comprehensive income:

Amortization of interest rate swap contracts	Amortization of interest rate swap contracts	889		—		1,690		—		Amortization of interest rate swap contracts	889		801
Comprehensive income	Comprehensive income	$	41,109	$	56,969	$	61,570	$	92,550	Comprehensive income	$	81,093	$	20,461

See accompanying Notes to Consolidated Financial Statements

DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the ~~six~~three months ended ~~June 30,~~March 31,

(in thousands)

(Unaudited)


		Six Months Ended							Three Months Ended
		2020		2019			2021		2020
Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net income	Net income	$	59,880	$	116,591	Net income	$	80,204	$	19,660
Adjustments to reconcile net income to net cash provided by operating activities:	Adjustments to reconcile net income to net cash provided by operating activities:					Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of buildings and tenant improvements	Depreciation of buildings and tenant improvements	143,922		131,878		Depreciation of buildings and tenant improvements	79,062		71,582
Amortization of deferred leasing and other costs	Amortization of deferred leasing and other costs	28,141		27,118		Amortization of deferred leasing and other costs	14,511		13,777
Amortization of deferred financing costs	Amortization of deferred financing costs	4,477		3,121		Amortization of deferred financing costs	2,439		2,219
Straight-line rental income and expense, net	Straight-line rental income and expense, net	(8,476)		(10,466)		Straight-line rental income and expense, net	(8,021)		(1,703)
Impairment charges	Impairment charges	5,626		—		Impairment charges	0		5,626
Loss on debt extinguishment	Loss on debt extinguishment	32,778		13		Loss on debt extinguishment	70		17,806

Gain on involuntary conversion		(1,283)		(2,259)

Gain on land and property sales	Gain on land and property sales	(15,213)		(33,383)		Gain on land and property sales	(22,598)		(9,120)
Third-party construction contracts, net	Third-party construction contracts, net	(3,717)		15,645		Third-party construction contracts, net	749		(780)
Other accrued revenues and expenses, net	Other accrued revenues and expenses, net	11,460		10,021		Other accrued revenues and expenses, net	14,651		(6,738)
Operating distributions received in excess of (less than) equity in earnings from unconsolidated joint ventures		3,563		(487)
Equity in earnings (in excess of) less than operating distributions received from unconsolidated joint ventures						Equity in earnings (in excess of) less than operating distributions received from unconsolidated joint ventures	(10,925)		2,221
Net cash provided by operating activities	Net cash provided by operating activities	261,158		257,792		Net cash provided by operating activities	150,142		114,550
Cash flows from investing activities:	Cash flows from investing activities:					Cash flows from investing activities:
Development of real estate investments	Development of real estate investments	(333,212)		(205,315)		Development of real estate investments	(140,432)		(170,900)
Acquisition of buildings and related intangible assets	Acquisition of buildings and related intangible assets	—		(108,201)		Acquisition of buildings and related intangible assets	(34,738)		0
Acquisition of land and other real estate assets	Acquisition of land and other real estate assets	(95,859)		(200,872)		Acquisition of land and other real estate assets	(64,594)		(87,023)
Second generation tenant improvements, leasing costs and building improvements	Second generation tenant improvements, leasing costs and building improvements	(17,062)		(20,463)		Second generation tenant improvements, leasing costs and building improvements	(14,676)		(8,105)
Other deferred leasing costs	Other deferred leasing costs	(17,306)		(11,152)		Other deferred leasing costs	(8,007)		(12,341)
Other assets	Other assets	(10,289)		(7,224)		Other assets	(36,844)		(15,040)
Proceeds from the repayments of notes receivable from property sales	Proceeds from the repayments of notes receivable from property sales	110,000		130,000		Proceeds from the repayments of notes receivable from property sales	0		110,000
Proceeds from land and property sales, net	Proceeds from land and property sales, net	34,509		97,526		Proceeds from land and property sales, net	85,479		27,081
Capital distributions from unconsolidated joint ventures	Capital distributions from unconsolidated joint ventures	13		—		Capital distributions from unconsolidated joint ventures	3,532		0
Capital contributions and advances to unconsolidated joint ventures	Capital contributions and advances to unconsolidated joint ventures	(4,833)		(5,962)		Capital contributions and advances to unconsolidated joint ventures	0		(2,353)
Net cash used for investing activities	Net cash used for investing activities	(334,039)		(331,663)		Net cash used for investing activities	(210,280)		(158,681)
Cash flows from financing activities:	Cash flows from financing activities:					Cash flows from financing activities:
Proceeds from the General Partner	Proceeds from the General Partner	76,678		42,128		Proceeds from the General Partner	30,381		5,465

Proceeds from unsecured debt	Proceeds from unsecured debt	663,123		—		Proceeds from unsecured debt	446,634		316,371
Payments on unsecured debt	Payments on unsecured debt	(546,972)		—		Payments on unsecured debt	(40,226)		(316,655)
Proceeds from secured debt financings	Proceeds from secured debt financings	18,400		—		Proceeds from secured debt financings	0		18,400
Payments on secured indebtedness including principal amortization	Payments on secured indebtedness including principal amortization	(1,906)		(43,502)		Payments on secured indebtedness including principal amortization	(1,007)		(876)
Borrowings on line of credit, net		—		222,000
(Repayments) borrowings on line of credit, net						(Repayments) borrowings on line of credit, net	(295,000)		200,000
Distributions to common unitholders	Distributions to common unitholders	(174,697)		(155,903)		Distributions to common unitholders	(96,252)		(87,345)

Contributions from noncontrolling interests, net		—		173
Distributions to noncontrolling interests						Distributions to noncontrolling interests	(150)		0
Tax payments on stock-based compensation awards	Tax payments on stock-based compensation awards	(4,051)		(5,469)		Tax payments on stock-based compensation awards	(4,754)		(4,051)

Change in book cash overdrafts	Change in book cash overdrafts	(14,444)		15,874		Change in book cash overdrafts	(14,430)		(14,444)
Other financing activities	Other financing activities	289		(9,920)		Other financing activities	(270)		289
Deferred financing costs	Deferred financing costs	(6,374)		—		Deferred financing costs	(9,800)		(3,971)
Net cash provided by financing activities	Net cash provided by financing activities	10,046		65,381		Net cash provided by financing activities	15,126		113,183
Net decrease in cash, cash equivalents and restricted cash		(62,835)		(8,490)
Net (decrease) increase in cash, cash equivalents and restricted cash						Net (decrease) increase in cash, cash equivalents and restricted cash	(45,012)		69,052
Cash, cash equivalents and restricted cash at beginning of period	Cash, cash equivalents and restricted cash at beginning of period	121,431		25,517		Cash, cash equivalents and restricted cash at beginning of period	67,223		121,431
Cash, cash equivalents and restricted cash at end of period	Cash, cash equivalents and restricted cash at end of period	$	58,596	$	17,027	Cash, cash equivalents and restricted cash at end of period	$	22,211	$	190,483

Non-cash activities:	Non-cash activities:					Non-cash activities:
Liabilities and right-of-use assets - operating leases		$	1,443	$	37,810
Lease liabilities arising from right-of-use assets						Lease liabilities arising from right-of-use assets	$	18,257	$	1,132
Assumption of indebtedness in real estate acquisitions						Assumption of indebtedness in real estate acquisitions	$	40,226	$	0

Non-cash distribution of assets from unconsolidated joint ventures, net						Non-cash distribution of assets from unconsolidated joint ventures, net	$	11,023	$	0

See accompanying Notes to Consolidated Financial Statements

DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES

Consolidated Statements of Changes in Equity

For the three ~~and six~~ months ended ~~June 30,~~March 31, 2021 and 2020 ~~and 2019~~

(in thousands, except per unit data)

(Unaudited)


		Common Unitholders																	Common Unitholders
		General		Limited		Accumulated									General		Limited		Accumulated
		Partner's		Partners'		Other		Total							Partner's		Partners'		Other		Total
		Common Equity		Common Equity		Comprehensive Loss		Partners' Equity		Noncontrolling Interests		Total Equity			Common Equity		Common Equity		Comprehensive Loss		Partners' Equity		Noncontrolling Interests		Total Equity
Balance at March 31, 2020		$	4,994,078	$	62,615	$	(34,235)	$	5,022,458	$	4,604	5,027,062
Balance at December 31, 2020														Balance at December 31, 2020	$	5,194,540	$	66,874	$	(31,568)	$	5,229,846	$	4,602	5,234,448
Net income	Net income	39,820		356		—		40,176		44		40,220		Net income	79,362		761		—		80,123		81		80,204
Other comprehensive income	Other comprehensive income	—		—		889		889		—		889		Other comprehensive income	—		—		889		889		—		889
Capital contribution from the General Partner	Capital contribution from the General Partner	71,213		—		—		71,213		—		71,213		Capital contribution from the General Partner	30,381		—		—		30,381		—		30,381
Stock-based compensation plan activity	Stock-based compensation plan activity	2,624		2,760		—		5,384		—		5,384		Stock-based compensation plan activity	2,665		6,956		—		9,621		—		9,621

Distributions to common unitholders ($0.235 per Common Unit)		(86,569)		(783)		—		(87,352)		—		(87,352)
Distributions to common unitholders ($0.255 per Common Unit)														Distributions to common unitholders ($0.255 per Common Unit)	(95,310)		(942)		—		(96,252)		—		(96,252)

Distributions to noncontrolling interests														Distributions to noncontrolling interests	—		—		—		—		(150)		(150)

Balance at June 30, 2020		$	5,021,166	$	64,948	$	(33,346)	$	5,052,768	$	4,648	$	5,057,416
Balance at March 31, 2021														Balance at March 31, 2021	$	5,211,638	$	73,649	$	(30,679)	$	5,254,608	$	4,533	$	5,259,141

Balance at December 31, 2019 $ 5,053,151 $ 57,575 $ (35,036) $ 5,075,690 $ 4,570 5,080,260
Net income 59,276 526 — 59,802 78 59,880
Other comprehensive income — — 1,690 1,690 — 1,690
Capital contribution from the General Partner 76,678 — — 76,678 — 76,678
Stock-based compensation plan activity 5,192 8,413 — 13,605 — 13,605
Distributions to common unitholders ($0.47 per Common Unit) (173,131) (1,566) — (174,697) — (174,697)
Balance at June 30, 2020 $ 5,021,166 $ 64,948 $ (33,346) $ 5,052,768 $ 4,648 $ 5,057,416

Common Unitholders
General Limited Accumulated
Partner's Partners' Other Total
Common Equity Common Equity Comprehensive
Loss Partners' Equity Noncontrolling
Interests Total Equity
Balance at March 31, 2019 $ 4,635,628 $ 54,941 $ (14,018) $ 4,676,551 $ 4,620 $ 4,681,171
Net income 71,053 621 — 71,674 (6) 71,668
Other comprehensive loss — — (14,699) (14,699) — (14,699)
Capital contribution from the General Partner 37,636 — — 37,636 — 37,636
Stock-based compensation plan activity 2,310 2,023 — 4,333 — 4,333
Distributions to common unitholders ($0.215 per Common Unit) (77,313) (675) — (77,988) — (77,988)
Balance at June 30, 2019 $ 4,669,314 $ 56,910 $ (28,717) $ 4,697,507 $ 4,614 $ 4,702,121

Balance at December 31, 2018 $ 4,662,877 $ 50,585 $ (4,676) $ 4,708,786 $ 4,457 $ 4,713,243
Net income 115,604 1,003 — 116,607 (16) 116,591
Other comprehensive loss — — (24,041) (24,041) — (24,041)
Capital contribution from the General Partner 42,128 — 42,128 — 42,128
Stock-based compensation plan activity 3,255 6,675 — 9,930 — 9,930
Contributions from noncontrolling interests — — — — 312 312
Distributions to common unitholders ($0.43 per Common Unit) (154,550) (1,353) — (155,903) — (155,903)
Distributions to noncontrolling interests — — — — (139) (139)
Balance at June 30, 2019 $ 4,669,314 $ 56,910 $ (28,717) $ 4,697,507 $ 4,614 $ 4,702,121


	Common Unitholders
	General		Limited		Accumulated
	Partner's		Partners'		Other		Total
	Common Equity		Common Equity		Comprehensive Loss		Partners' Equity		Noncontrolling Interests		Total Equity
Balance at December 31, 2019	$	5,053,151	$	57,575	$	(35,036)	$	5,075,690	$	4,570	$	5,080,260
Net income	19,456		170		—		19,626		34		19,660
Other comprehensive income	—		—		801		801		—		801
Capital contribution from the General Partner	5,465		—		—		5,465		—		5,465
Stock-based compensation plan activity	2,568		5,653		—		8,221		—		8,221





Distributions to common unitholders ($0.235 per Common Unit)	(86,562)		(783)		—		(87,345)		—		(87,345)



Balance at March 31, 2020	$	4,994,078	$	62,615	$	(34,235)	$	5,022,458	$	4,604	$	5,027,062

See accompanying Notes to Consolidated Financial Statements

DUKE REALTY CORPORATION AND DUKE REALTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. General Basis of Presentation

The interim consolidated financial statements included herein have been prepared by the General Partner and the Partnership. The ~~2019~~2020 year-end consolidated balance sheet data included in this Report was derived from the audited financial statements in the combined Annual Report on Form 10-K of the General Partner and the Partnership for the year ended December 31, ~~2019~~2020 (the ~~"2019~~"2020 Annual Report"), but does not include all disclosures required by accounting principles generally accepted in the United States of America ("GAAP"). The financial statements have been prepared in accordance with GAAP for interim financial information and in accordance with Rule 10-01 of Regulation S-X of the Securities Exchange Act of 1934, as amended. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and revenue and expenses during the reporting period. Our actual results could differ from those estimates and assumptions. These financial statements should be read in conjunction with Management's Discussion and Analysis of Financial Condition and Results of Operations included herein and the consolidated financial statements and notes thereto included in the ~~2019~~2020 Annual Report.

The General Partner was formed in 1985, and we believe that it qualifies as a REIT under the provisions of the Internal Revenue Code of 1986, as amended (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%~~99.0% of the Common Units at ~~June 30, 2020.~~March 31, 2021. The remaining ~~0.9%~~1.0% 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 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.

As of ~~June 30, 2020,~~March 31, 2021, we owned and operated a portfolio primarily consisting of industrial properties and provided real estate services to third-party ~~owners.~~owners, customers and joint ventures. Substantially all of our Rental Operations (see Note ~~11)~~10) are conducted through the Partnership. We conduct our Service Operations (see Note ~~11)~~10) 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. The consolidated financial statements include our accounts and the accounts of our majority-owned or controlled subsidiaries.

2. 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 common area maintenance ("CAM").

If we conclude that collection of lease payments are not probable, any difference between the revenue that would have been recognized under the straight-line method and the lease payments that have been collected is recognized as a current period adjustment to rental revenues. Any other changes in collectability reserves for leases not subject to the collectability constraint are also recorded as a current period adjustment to rental revenues.

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):


		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended March 31,
		2020		2019		2020		2019			2021		2020
Rental revenue - fixed payments	Rental revenue - fixed payments	$	169,617	$	161,483	$	331,224	$	318,157	Rental revenue - fixed payments	$	187,387	$	161,608
Rental revenue - variable payments (1)	Rental revenue - variable payments (1)	56,757		51,624		113,905		104,915		Rental revenue - variable payments (1)	70,792		57,147
Rental and related revenue	Rental and related revenue	$	226,374	$	213,107	$	445,129	$	423,072	Rental and related revenue	$	258,179	$	218,755

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

~~Accounting for Lease Concessions Granted in Connection with the COVID-19 Outbreak~~

On April 8, 2020, the Financial Accounting Standard Board ("FASB") held a public meeting and shortly afterwards issued a question-and-answer ("Q&A") document which was intended to provide accounting relief for lease concessions related to the COVID-19 pandemic. The accounting relief permits an entity to choose to forgo the evaluation of the enforceable rights and obligations of a lease contract, which is a requirement of Accounting Standards Codification Topic 842, ~~Leases~~ ~~("ASC 842")~~, as long as the total rent payments after the lease concessions are substantially the same, or less than, the total payments previously required by the lease. An entity may account for COVID-19 related lease concessions either (i) as if they were part of the enforceable rights and obligations of the parties under the existing lease contract; or (ii) as a lease modification. To the extent that a rent concession is granted as a deferral of payments, but the total lease payments are substantially the same, lessors are allowed to account for the concession as if no change had been made to the original lease contract.

Based on the Q&A, an entity is not required to account for all lease concessions related to the effects of the COVID-19 pandemic under one elected option, however, the entity is required to apply the elected option consistently to leases with similar characteristics and in similar circumstances. As of July 28, 2020, we have executed agreements with certain tenants allowing for the deferral of rental payments totaling $7.8 million. Some of these deferred amounts pertain to rents originally due subsequent to June 30, 2020. The substantial majority of these agreements required repayment of deferred amounts within twelve months of their execution.

The rental deferral agreements that we have executed, where the revised payment terms require repayment of deferred amounts within twelve months of their execution, are eligible for the alternate accounting treatment allowed through the Q&A. We have elected to account for these deferred rental agreements as if the deferral of rental payments was an enforceable right in the original lease agreements. This accounting election resulted in us not modifying the pattern of revenue recognition for these leases, to the extent they are collectable, and all deferred amounts related to leases to which we are applying this accounting treatment are classified within Accounts Receivable on the June 30, 2020 Consolidated Balance Sheets.

For deferred rental agreements where the revised terms do not require repayment of the full amount of deferred amounts within twelve months of their execution, even if such revised payment terms fall within the scope of the relief offered by the Q&A, we have continued to apply lease modification accounting as stipulated by ASC 842.

Lessee Accounting

As of ~~June 30, 2020,~~March 31, 2021, our lease arrangements, where we are the lessee, primarily consisted of office and ground ~~leases, which are classified~~leases. For these lease arrangements, as ~~operating leases under~~ required by Accounting Standards Codification Topic 842, Leases ("ASC ~~842. A $40.8 million~~842"), we recognized right-of-use ~~asset related to these operating leases is included in Other Escrow Deposits~~("ROU") assets and ~~Other Assets, and a~~the corresponding lease ~~liability of $43.8 million, is included in Other Liabilities on our Consolidated Balance Sheets as of June 30, 2020, and represents~~liabilities representing the discounted value of future lease ~~payments required under our lease agreements.~~payments. In determining these amounts, we elected an available practical expedient that allows us, as a lessee, to not separate lease and non-lease components.

All of our office leases are classified as operating leases under ASC 842. Ground leases that were classified as operating leases prior to adoption of ASC 842 continue to be accounted for as operating leases by electing the practical expedient under ASC 842. NaN ground leases that were entered into subsequent to the adoption of ASC 842 are classified as finance leases. For the operating leases we recognized ROU assets and related lease liabilities as follows (in thousands):


	March 31, 2021		December 31, 2020
ROU assets	$	38,044	$	38,867
Lease liabilities	42,179		42,874

For the finance leases, we recognized ROU assets and related lease liabilities as follows (in thousands):


	March 31, 2021		December 31, 2020
ROU assets	$	38,063	$	19,239
Lease liabilities	38,023		19,430

ROU assets were included within Other Escrow Deposits and Other Assets and lease liabilities were included in Other Liabilities on our Consolidated Balance Sheets.

3. Reclassifications

There have been no amounts in the accompanying consolidated financial statements for ~~2019~~2020 reclassified to conform to the ~~2020~~2021 consolidated financial statement presentation.

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):


		June 30, 2020			December 31, 2019			March 31, 2021		December 31, 2020
Cash and cash equivalents	Cash and cash equivalents	$	29,870		$	110,891	Cash and cash equivalents	$	9,009	$	6,309
Restricted cash held in escrow for like-kind exchange	Restricted cash held in escrow for like-kind exchange	—			1,673		Restricted cash held in escrow for like-kind exchange	0		47,682
Restricted cash included in other escrow deposits and other assets	Restricted cash included in other escrow deposits and other assets	28,726		��	8,867		Restricted cash included in other escrow deposits and other assets	13,202		13,232
Total cash, cash equivalents, and restricted cash shown in the Consolidated Statements of Cash Flows	Total cash, cash equivalents, and restricted cash shown in the Consolidated Statements of Cash Flows	$	58,596		$	121,431	Total cash, cash equivalents, and restricted cash shown in the Consolidated Statements of Cash Flows	$	22,211	$	67,223

5. Variable Interest Entities

Partnership

Due to the fact that the Limited Partners do not have kick out rights, or substantive participating rights, the Partnership is a variable interest entity ("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 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. All of the Company's debt is an obligation of the Partnership.

Joint Ventures

We have equity interests in unconsolidated joint ventures that are primarily ~~own~~engaged in the operation and ~~operate rental properties or hold land for development.~~ development of industrial real estate properties.

We consolidate those 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 owning entities) that lack substantive participating or kick out rights and (iii) establish whether or not 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) are the sole entity that has the power to direct the activities of the VIE and (ii) have the obligation or rights to absorb the VIE's losses or receive its benefits, then we would be determined to be the primary beneficiary and would consolidate the VIE. To the extent 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 VIEs are 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 the other 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.

There were no unconsolidated joint ventures, in which we have any recognized assets or liabilities or have retained any economic exposure to loss at ~~June 30, 2020,~~March 31, 2021, that met the criteria to be considered VIEs. ~~Our~~In January 2021, we, and the other partner from 2 unconsolidated joint ventures, repaid $69.8 million of guaranteed loans. At March 31, 2021, our maximum loss exposure for guarantees of unconsolidated joint venture indebtedness, none of which relate to VIEs, totaled ~~$59.9 million at June 30, 2020.~~$11.5 million.

6. 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 investments in quality industrial projects. Transaction costs related to asset acquisitions are capitalized and transaction costs related to business combinations and dispositions are expensed.

Acquisitions

We paid cash of $34.7 million for two building acquisitions from unrelated parties during the three months ended March 31, 2021.

We did not acquire any buildings during the ~~six~~three months ended ~~June 30,~~March 31, 2020. ~~We paid cash~~

The following table summarizes amounts recognized for each major class of ~~$108.2 million~~assets (in thousands) for ~~building~~these acquisitions during the ~~six~~three months ended March 31, 2021:


Real estate assets	$	31,754
Lease related intangibles	3,078
Total acquired assets	$	34,832

The leases in the acquired properties had a weighted average remaining life at acquisition of approximately 15.1 years.

Distribution of Joint Venture Properties

As part of a plan of dissolution, we received a non-cash distribution of real estate assets from ~~June 30, 2019~~2 50%-owned unconsolidated joint ventures. These joint ventures distributed their ownership in 2 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. The.se 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 Statement 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 $52.1 million in the Consolidated Balance Sheets. 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 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 upon 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 the three months ended March 31, 2021 are as follows:


	Low			High
Exit capitalization rate	4.50		%	5.00		%
Net rental rate per square foot	$	6.62		$	12.58

Capitalized acquisition costs were insignificant and the fair value of the properties acquired from unrelated parties during three months ended March 31, 2021, was substantially the same as the cost of acquisition.

Dispositions

Dispositions of buildings and undeveloped land generated net cash proceeds of ~~$34.5~~$85.5 million and ~~$97.5~~$27.1 million during the ~~six~~three months ended ~~June 30,~~March 31, 2021 and 2020, ~~and 2019,~~ respectively.

The number of buildings sold is disclosed in Note 11.

During the ~~six~~three months ended ~~June 30,~~March 31, 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.

7. 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. The following table summarizes the book value and changes in the fair value of our debt (in thousands):


		Book Value at 12/31/2019		Book Value at 6/30/2020		Fair Value at 12/31/2019		Issuances and Assumptions		Payments/Payoffs		Adjustments to Fair Value		Fair Value at 6/30/2020			Book Value at 12/31/2020		Book Value at 3/31/2021		Fair Value at 12/31/2020		Issuances and Assumptions		Payments/Payoffs		Adjustments to Fair Value		Fair Value at 3/31/2021
Fixed rate secured debt	Fixed rate secured debt	$	32,287	$	48,737	$	34,547	$	18,400	$	(1,906)	$	(9,450)	$	41,591	Fixed rate secured debt	$	62,817	$	61,740	$	65,848	$	0	$	(1,007)	$	(1,850)	$	62,991
Variable rate secured debt	Variable rate secured debt	1,900		1,900		1,900		—		—		—		1,900		Variable rate secured debt	1,600		1,600		1,600		0		0		0		1,600
Unsecured debt	Unsecured debt	2,900,000		3,058,740		3,045,485		675,000		(516,260)		143,342		3,347,567		Unsecured debt	3,058,740		3,508,740		3,387,913		490,226		(40,226)		(214,587)		3,623,326

Unsecured line of credit																Unsecured line of credit	295,000		0		295,000		0		(295,000)		0		0
Total	Total	$	2,934,187	$	3,109,377	$	3,081,932	$	693,400	$	(518,166)	$	133,892	$	3,391,058	Total	$	3,418,157	$	3,572,080	$	3,750,361	$	490,226	$	(336,233)	$	(216,437)	$	3,687,917
Less: Deferred financing costs	Less: Deferred financing costs	19,422		34,191												Less: Deferred financing costs	33,106		39,189
Total indebtedness as reported on the consolidated balance sheets	Total indebtedness as reported on the consolidated balance sheets	$	2,914,765	$	3,075,186											Total indebtedness as reported on the consolidated balance sheets	$	3,385,051	$	3,532,891

~~Secured Debt~~

Secured Debt

Because our fixed rate secured debt is not actively traded in any marketplace, we utilized a discounted cash flow methodology to determine 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 ~~2.20%~~2.10% and ~~2.90%~~3.10%, 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.

Unsecured Debt

At ~~June 30, 2020,~~March 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. Our unsecured notes are thinly traded and, in certain cases, the broker estimates were not based upon comparable transactions. 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 ~~99.00%~~92.00% to ~~136.00%~~127.00% of face value.

In February 2020, we issued $325.0 million of senior unsecured notes bearing interest at a stated interest rate of 3.05% and maturing on March 1, 2050, at 97.35% of par value, resulting in an effective interest rate of 3.19%. Proceeds from the unsecured notes offering were primarily used to repay the $300.0 million of 4.38% senior unsecured notes due 2022. In connection with the early redemption of these notes, we recognized a loss of $17.8 million consisting of a repayment premium and write-off of deferred financing costs.

In June 2020, we issued $350.0 million of senior unsecured notes bearing interest at a stated interest rate of 1.75% and maturing on July 1, 2030, at 99.07% of par value, resulting in an effective interest rate of 1.85%. Proceeds from the unsecured notes offering were primarily used to repurchase and cancel $216.3 million of 3.88% senior 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 $15.0 million consisting of a repayment premium and write-off of deferred financing costs.

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 ~~June 30, 2020.~~March 31, 2021.

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 will be allocated to finance or refinance eligible green projects.

Also 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 6).

Unsecured Line of Credit

Our unsecured line of credit at ~~June 30, 2020~~March 31, 2021 is described as follows (in thousands):

~~Description~~

Borrowing
Capacity

~~Maturity Date~~

~~Outstanding Balance at June 30, 2020~~

~~Unsecured Line of Credit - Partnership~~

~~1,200,000~~

~~January 30, 2022~~

—


Description	Borrowing Capacity		Maturity Date	Outstanding Balance at March 31, 2021
Unsecured Line of Credit - Partnership	$	1,200,000	March 31, 2025	$	0

~~The Partnership's~~

In March 2021, the Partnership amended and restated its existing $1.20 billion unsecured line of credit, ~~has an~~which was set to mature in January 2022 with 2 six-month extension options. The amended and restated line of credit bears interest ~~rate on borrowings of~~at LIBOR plus ~~0.875%~~0.775% with a reduction in borrowing costs if certain sustainability linked metrics are achieved each year. In addition, the amended and ~~has a maturity date~~restated line of ~~January 30, 2022,~~credit matures on March 31, 2025 with ~~options to extend until January 30, 2023.~~2 six-month extension options. 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 LIBOR ceases to publish and needs to be replaced. As a result of amending and restating the unsecured line of credit, we incurred $6.1 million of deferred financing costs as of March 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 ~~June 30, 2020,~~March 31, 2021, we were in compliance with all financial covenants under this line of credit.

To the extent there are outstanding borrowings, we utilize 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.

8. 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. ~~The current ATM program provides for the sale of up to $400.0 million of shares of the General Partner's common stock.~~ 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. The ability to enter into forward sale agreements through the new ATM equity program will enable the General Partner to set the price of such shares upon pricing the offering (subject to certain adjustments) while delaying the issuance of such shares and the receipt of the net proceeds by the General Partner.

During the ~~six~~three months ended ~~June 30, 2020,~~March 31, 2021, the General Partner issued ~~2.0 million~~723,000 common shares pursuant to its ATM equity ~~program,~~programs, generating gross proceeds of ~~$71.6~~$30.1 million and, after deducting commissions and other costs, net proceeds of ~~$70.7~~$29.5 million. The proceeds from these sales 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.

~~9. Related Party Transactions~~

We provide property management, asset management, leasing, construction and other tenant-related services to unconsolidated joint ventures in which we have equity interests. We recorded the corresponding fees based on contractual terms that approximate market rates for these types of services and have eliminated our ownership percentage of these fees in the consolidated financial statements. The following table summarizes the fees earned from these joint ventures, prior to the elimination of our ownership percentage (in thousands):

Three Months Ended June 30, Six Months Ended June 30,
2020 2019 2020 2019
Management fees $ 396 $ 443 $ 744 $ 865
Leasing fees $ — $ 408 $ 451 $ 556
Construction and development fees $ 860 $ 1,742 $ 1,221 $ 3,938

~~10.~~9. 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):


		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended March 31,
		2020		2019		2020		2019			2021		2020
General Partner	General Partner									General Partner
Net income attributable to common shareholders	Net income attributable to common shareholders	$	39,820	$	71,053	$	59,276	$	115,604	Net income attributable to common shareholders	$	79,362	$	19,456
Less: dividends on participating securities	Less: dividends on participating securities	(356)		(388)		(712)		(777)		Less: dividends on participating securities	(371)		(356)
Basic net income attributable to common shareholders	Basic net income attributable to common shareholders	$	39,464	$	70,665	$	58,564	$	114,827	Basic net income attributable to common shareholders	$	78,991	$	19,100
Add back dividends on dilutive participating securities	Add back dividends on dilutive participating securities	—		—		—		—		Add back dividends on dilutive participating securities	0		0
Noncontrolling interest in earnings of common unitholders	Noncontrolling interest in earnings of common unitholders	356		621		526		1,003		Noncontrolling interest in earnings of common unitholders	761		170
Diluted net income attributable to common shareholders	Diluted net income attributable to common shareholders	$	39,820	$	71,286	$	59,090	$	115,830	Diluted net income attributable to common shareholders	$	79,752	$	19,270
Weighted average number of common shares outstanding	Weighted average number of common shares outstanding	368,836		359,681		368,513		359,412		Weighted average number of common shares outstanding	373,667		368,190
Weighted average Limited Partner Units outstanding	Weighted average Limited Partner Units outstanding	3,331		3,145		3,277		3,105		Weighted average Limited Partner Units outstanding	3,575		3,224
Other potential dilutive shares	Other potential dilutive shares	406		100		407		98		Other potential dilutive shares	502		456
Weighted average number of common shares and potential dilutive securities	Weighted average number of common shares and potential dilutive securities	372,573		362,926		372,197		362,615		Weighted average number of common shares and potential dilutive securities	377,744		371,870

Partnership	Partnership									Partnership
Net income attributable to common unitholders	Net income attributable to common unitholders	$	40,176	$	71,674	$	59,802	$	116,607	Net income attributable to common unitholders	$	80,123	$	19,626
Less: distributions on participating securities	Less: distributions on participating securities	(356)		(388)		(712)		(777)		Less: distributions on participating securities	(371)		(356)
Basic net income attributable to common unitholders	Basic net income attributable to common unitholders	$	39,820	$	71,286	$	59,090	$	115,830	Basic net income attributable to common unitholders	$	79,752	$	19,270
Add back distributions on dilutive participating securities	Add back distributions on dilutive participating securities	—		—		—		—		Add back distributions on dilutive participating securities	0		0
Diluted net income attributable to common unitholders	Diluted net income attributable to common unitholders	$	39,820	$	71,286	$	59,090	$	115,830	Diluted net income attributable to common unitholders	$	79,752	$	19,270
Weighted average number of Common Units outstanding	Weighted average number of Common Units outstanding	372,167		362,826		371,790		362,517		Weighted average number of Common Units outstanding	377,242		371,414
Other potential dilutive units	Other potential dilutive units	406		100		407		98		Other potential dilutive units	502		456
Weighted average number of Common Units and potential dilutive securities	Weighted average number of Common Units and potential dilutive securities	372,573		362,926		372,197		362,615		Weighted average number of Common Units and potential dilutive securities	377,744		371,870

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):


		Three Months Ended June 30,			Six Months Ended June 30,				Three Months Ended March 31,
		2020	2019	2020	2019		2021	2020

General Partner and Partnership	General Partner and Partnership					General Partner and Partnership
Other potential dilutive shares or units:	Other potential dilutive shares or units:					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 potential shares or units under fixed stock option and other stock-based compensation plans	—	—	—	—	Anti-dilutive outstanding potential shares or units under fixed stock option and other stock-based compensation plans	0	0
Anti-dilutive outstanding participating securities	Anti-dilutive outstanding participating securities	1,660	1,960	1,660	1,960	Anti-dilutive outstanding participating securities	1,568	1,647

1819

~~11.~~10. Segment Reporting

Reportable Segments

As of ~~June 30, 2020,~~March 31, 2021, we had 2 reportable operating segments, the first consisting of the ownership and rental of industrial real estate investments. ~~Our ongoing~~We continue to increase our investments in ~~new real estate investments are determined~~quality industrial properties largely ~~upon~~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. ~~Our strategic initiatives and~~We treat our allocation of resources have been historically based upon allocation among product types, which was consistent with our designation of reportable segments, and after having sold nearly all of our office and medical office properties we continue to increase our investment in industrial properties ~~and treat them~~ as a single operating and reportable ~~segment.~~segment based on our method of internal reporting. Properties not included in our reportable segments, 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 ~~June 30, 2020.~~March 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 ~~leasing, development, general contracting~~ and ~~construction management~~leasing to third-party property owners, customers 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, 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 (in thousands):


		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended March 31,
		2020		2019		2020		2019			2021		2020
Revenues	Revenues									Revenues
Rental Operations:	Rental Operations:									Rental Operations:
Industrial	Industrial	$	224,472	$	211,004	$	441,424	$	419,407	Industrial	$	256,670	$	216,952
Non-reportable Rental Operations	Non-reportable Rental Operations	1,383		1,478		2,911		2,930		Non-reportable Rental Operations	1,509		1,528
Service Operations	Service Operations	12,137		23,919		19,751		78,883		Service Operations	31,113		7,614
Total segment revenues	Total segment revenues	237,992		236,401		464,086		501,220		Total segment revenues	289,292		226,094
Other revenue	Other revenue	519		625		794		735		Other revenue	0		275
Consolidated revenue	Consolidated revenue	$	238,511	$	237,026	$	464,880	$	501,955	Consolidated revenue	$	289,292	$	226,369

Supplemental Performance Measure

Property-level net operating income on a cash basis ("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.

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 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.

The following table shows a reconciliation of our segment-level measures of profitability to consolidated income from continuing operations before income taxes (in thousands and excluding discontinued operations):


		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended March 31,
		2020		2019		2020		2019			2021		2020
PNOI	PNOI									PNOI
Industrial	Industrial	$	160,966	$	149,369	$	317,305	$	292,251	Industrial	$	176,481	$	154,646
Non-reportable Rental Operations	Non-reportable Rental Operations	1,053		862		2,872		1,740		Non-reportable Rental Operations	1,273		1,819
PNOI, excluding all sold properties	PNOI, excluding all sold properties	162,019		150,231		320,177		293,991		PNOI, excluding all sold properties	177,754		156,465
PNOI from sold properties included in continuing operations	PNOI from sold properties included in continuing operations	(3)		5,952		111		11,944		PNOI from sold properties included in continuing operations	254		2,529
PNOI, continuing operations	PNOI, continuing operations	$	162,016	$	156,183	$	320,288	$	305,935	PNOI, continuing operations	$	178,008	$	158,994

Earnings from Service Operations	Earnings from Service Operations	1,731		730		2,777		3,108		Earnings from Service Operations	1,650		1,046

Rental Operations revenues and expenses excluded from PNOI:	Rental Operations revenues and expenses excluded from PNOI:									Rental Operations revenues and expenses excluded from PNOI:
Straight-line rental income and expense, net	Straight-line rental income and expense, net	6,774		4,762		8,476		10,466		Straight-line rental income and expense, net	8,021		1,703
Revenues related to lease buyouts	Revenues related to lease buyouts	2,033		—		2,426		19		Revenues related to lease buyouts	310		392
Amortization of lease concessions and above and below market rents	Amortization of lease concessions and above and below market rents	1,540		1,542		4,097		2,804		Amortization of lease concessions and above and below market rents	2,832		2,557
Intercompany rents and other adjusting items	Intercompany rents and other adjusting items	(703)		60		(375)		103		Intercompany rents and other adjusting items	(418)		(394)
Non-Segment Items:	Non-Segment Items:									Non-Segment Items:
Equity in earnings of unconsolidated joint ventures	Equity in earnings of unconsolidated joint ventures	2,396		4,143		4,935		8,858		Equity in earnings of unconsolidated joint ventures	16,268		2,539
Interest expense	Interest expense	(22,841)		(23,510)		(46,335)		(45,642)		Interest expense	(22,507)		(23,494)
Depreciation and amortization expense	Depreciation and amortization expense	(86,704)		(83,004)		(172,063)		(158,996)		Depreciation and amortization expense	(93,573)		(85,359)
Gain on sale of properties	Gain on sale of properties	—		30,592		8,937		30,429		Gain on sale of properties	21,360		8,937
Impairment charges	Impairment charges	—		—		(5,626)		—		Impairment charges	0		(5,626)
Interest and other income, net	Interest and other income, net	216		2,534		1,611		5,292		Interest and other income, net	463		1,395
General and administrative expenses	General and administrative expenses	(13,606)		(13,420)		(35,369)		(35,403)		General and administrative expenses	(24,217)		(21,763)
Gain on land sales	Gain on land sales	6,070		1,950		6,205		2,700		Gain on land sales	1,238		135
Other operating expenses	Other operating expenses	(1,546)		(1,518)		(2,658)		(3,641)		Other operating expenses	(1,145)		(1,112)
Loss on extinguishment of debt	Loss on extinguishment of debt	(14,972)		—		(32,778)		(13)		Loss on extinguishment of debt	(70)		(17,806)
Gain on involuntary conversion		1,283		—		1,283		2,259
Non-incremental costs related to successful leases	Non-incremental costs related to successful leases	(4,034)		(3,447)		(6,559)		(5,603)		Non-incremental costs related to successful leases	(2,958)		(2,525)
Other non-segment revenues and expenses, net	Other non-segment revenues and expenses, net	394		588		327		663		Other non-segment revenues and expenses, net	126		(67)
Income from continuing operations before income taxes	Income from continuing operations before income taxes	$	40,047	$	78,185	$	59,599	$	123,338	Income from continuing operations before income taxes	$	85,388	$	19,552

~~12.~~11. 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):


		June 30, 2020		December 31, 2019			March 31, 2021		December 31, 2020
Buildings and tenant improvements	Buildings and tenant improvements	$	5,541,171	$	5,295,336	Buildings and tenant improvements	$	5,895,683	$	5,812,004
Land and improvements	Land and improvements	2,617,697		2,532,541		Land and improvements	2,936,382		2,883,674
Other real estate investments (1)	Other real estate investments (1)	135,039		165,500		Other real estate investments (1)	23,922		49,477
Real estate assets	Real estate assets	$	8,293,907	$	7,993,377	Real estate assets	$	8,855,987	$	8,745,155

(1) ~~Consists of~~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.

~~Discontinued Operations~~

~~The following table illustrates the number of sold or held-for-sale properties in this report, all of which were excluded from discontinued operations:~~

Held-for-Sale at June 30, 2020 Sold Year-to-Date in 2020 Sold in 2019 Total
Properties sold or classified as held-for-sale — 1 28 29

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 the noncontrolling interests (in thousands):


		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended March 31,
		2020		2019		2020		2019			2021		2020
Income from continuing operations attributable to common shareholders	Income from continuing operations attributable to common shareholders	$	39,797	$	70,955	$	59,206	$	115,352	Income from continuing operations attributable to common shareholders	$	79,362	$	19,408
Income from discontinued operations attributable to common shareholders	Income from discontinued operations attributable to common shareholders	23		98		70		252		Income from discontinued operations attributable to common shareholders	0		48
Net income attributable to common shareholders	Net income attributable to common shareholders	$	39,820	$	71,053	$	59,276	$	115,604	Net income attributable to common shareholders	$	79,362	$	19,456

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.

Assets Held-for-Sale

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


	Held-for-Sale at March 31, 2021	Sold Year-to-Date in 2021	Sold in 2020	Total






Properties sold or classified as held-for-sale	0	2	7	9

~~Assets Held-for-Sale~~

The following table illustrates aggregate balance sheet information for assets held-for-sale (in thousands):


	~~Held-for-Sale Properties Included in Continuing Operations~~
	~~June 30, 2020~~		~~December 31, 2019~~

~~Land and improvements~~	$	—	$	~~4,561~~
~~Buildings and tenant improvements~~	—		~~18,840~~
~~Undeveloped land~~	—		—
~~Accumulated depreciation~~	—		~~(7,132)~~
~~Deferred leasing and other costs, net~~	—		~~2,100~~
~~Other assets~~	—		94
~~Total assets held-for-sale~~	$	—	$	~~18,463~~




~~Total liabilities related to assets held-for-sale~~	$	—	$	~~887~~


	Held-for-Sale Properties Included in Continuing Operations
	March 31, 2021		December 31, 2020

Land and improvements	$	0	$	27,954
Buildings and tenant improvements	0		44,800

Accumulated depreciation	0		(5,976)
Deferred leasing and other costs, net	0		936
Other assets	0		232
Total assets held-for-sale	$	0	$	67,946


Accrued expenses	0		660
Other liabilities	0		7,080
Total liabilities related to assets held-for-sale	$	0	$	7,740

~~13.~~12. 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 ~~July 29, 2020:~~April 28, 2021:

Class of stock/units

Quarterly Amount per Share or Unit

Record Date

Payment Date

Common - Quarterly

$~~0.235~~0.255

~~August~~May 14, ~~2020~~2021

~~August 31, 2020~~June 1, 2021

~~COVID-19 Pandemic~~

We are closely monitoring the impact of the COVID-19 pandemic on all aspects of our business and geographies, including how it will impact our tenants and business partners. Through July 28, 2020, we have collecte~~d over 97.0% of originally scheduled July rent payments while 2.6% of originally scheduled July rent payments have been~~ ~~deferred to later periods pursuant to executed agreements with tenants.~~

While the COVID-19 outbreak did not have a material impact on our financial statements during the six months ended June 30, 2020, we are unable to predict the impact that it will have on our financial condition, results of operations and cash flows in future periods due to numerous uncertainties.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following Management's Discussion and Analysis of Financial Condition and Results of Operations is intended to help the reader understand our operations and our present business environment. Management's Discussion and Analysis is provided as a supplement to, and should be read in conjunction with, our consolidated financial statements and the notes thereto contained in Part I, Item 1 of this Report, and the consolidated financial statements and notes thereto contained in Part IV, Item 15 of our ~~2019~~2020 Annual Report.

Cautionary Notice Regarding Forward-Looking Statements

Certain statements contained in or incorporated by reference into this Report, including, without limitation, those related to our future operations and those related to our expectations concerning the effects of the COVID-19 pandemic on our future operations and balance sheet, 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, including changes that may be forthcoming as a result of the change in administration in the U.S.;

•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;

•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, or at all;

•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 trade disputes and tariffs on goods imported in the United States;

•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").

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 in our ~~2019~~2020 Annual ~~Report and in Part II, Item 1A, "Risk Factors" in this~~ Report. The risk factors contained in our ~~2019~~2020 Annual Report are 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.

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. A more complete description of our business, and of management's philosophy and priorities, is included in our ~~2019~~2020 Annual Report.

At ~~June 30, 2020,~~March 31, 2021, we:

•Owned or jointly controlled ~~521~~546 primarily industrial properties, of which ~~507~~520 properties with ~~149.6~~152.0 million square feet were in service and 1426 properties with ~~6.7~~10.4 million square feet were under development. The ~~507~~520 in-service properties were comprised of ~~468~~483 consolidated properties with ~~138.5~~141.3 million square feet and 3937 unconsolidated joint venture properties with ~~11.1~~10.7 million square feet. The 1426 properties under development ~~consisted of 13~~are all consolidated properties with ~~6.4~~10.4 million ~~square feet and one unconsolidated joint venture property with 358,000~~ square feet.

•Owned directly, or through ownership interests in unconsolidated joint ventures (with acreage not adjusted for our percentage ownership interest), approximately ~~1,350~~500 acres of land and controlled approximately ~~900~~800 acres through purchase options.

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 higher barrier markets with the highest growth potential.

COVID-19

AsDuring 2020, the ~~result of~~industrial sector remained resilient throughout the ~~COVID-19~~ pandemic weas an essential business. Leading into 2021, the economy continues to recover due to higher vaccination rates, government stimulus and support from the United States Federal Reserve enabling businesses to re-open. Our leasing activity was substantial during the first quarter, driven by e-commerce demand and higher inventory levels to reduce potential future supply chain disruptions. We have ~~made various changes~~continued to ~~our operations~~start new development projects in ~~order to support~~early 2021 across the ~~health and safety of our associates and the communities~~markets in which we ~~operate. The pandemic has had a far-reaching impact~~operate, with speculative development focused on ~~the global economy but the demand for industrial real estate continues to be healthy, especially as the demand for industrial space to support e-commerce has accelerated.~~coastal infill markets.

~~As of July 28, 2020, we have executed deferral agreements with certain tenants that will eventually allow~~ ~~for $7.8 million of t~~otal scheduled rental payments to be deferred and repaid in future periods. Some of these deferred amounts pertain to rents originally due subsequent to June 30, 2020. The substantial majority of these agreements required repayment of the deferred amounts within twelve months of their execution. Through July 28, 2020, we have collected over ~~97.0% of originally scheduled July rent payments while 2.6% of originally scheduled July rent payments have been deferred to later periods pursuant to executed agreements with tenants.~~

We have not started any new speculative development projects since the beginning of the pandemic. We have been able to continue leasing our existing speculative space through the second quarter of 2020 and, depending on future economic conditions, we may resume speculative developments in certain markets.

The pandemic's impact on the overall global economy is continuing and the ultimate impact is unknown at this time. Please see Part II, Item 1A, "Risk Factors" below for additional information about the potential impacts the pandemic may have on our business and results of operations.

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 ~~June 30,~~March 31, 2021 and 2020, ~~and 2019,~~ respectively:


		Total Square Feet (in thousands)				Percent of Total Square Feet						Percent Leased*					Average Annual Net Effective Rent**					Total Square Feet (in thousands)				Percent of Total Square Feet			Percent Leased*	Average Annual Net Effective Rent**
Type	Type	2020	2019	2020		2019		2020		2019		2020	2019	Type	2021	2020		2021		2020		2021		2020		2021	2020
Industrial	Industrial	138,241	138,504	99.8	%	99.8	%	96.8	%	95.8	%	$5.10	$4.82	Industrial	141,087	135,114		99.9	%	99.8	%	97.6	%	96.6	%	$5.33	$5.04
Non-reportable Rental Operations	Non-reportable Rental Operations	211	211	0.2	%	0.2	%	80.5	%	77.3	%	$24.27	$24.75	Non-reportable Rental Operations	211	211		0.1	%	0.2	%	96.8	%	80.0	%	$22.31	$24.36
Total Consolidated	Total Consolidated	138,452	138,715	100.0	%	100.0	%	96.8	%	95.7	%	$5.12	$4.85	Total Consolidated	141,298	135,325		100.0	%	100.0	%	97.6	%	96.6	%	$5.36	$5.06
Unconsolidated Joint Ventures	Unconsolidated Joint Ventures	11,109	12,867					95.7	%	90.8	%	$4.23	$4.12	Unconsolidated Joint Ventures	10,673	11,109						97.6	%	95.7	%	$4.37	$4.24
Total Including Unconsolidated Joint Ventures	Total Including Unconsolidated Joint Ventures	149,561	151,582					96.7	%	95.3	%			Total Including Unconsolidated Joint Ventures	151,971	146,434						97.6	%	96.5	%
* Represents the percentage of total square feet leased based on executed leases and without regard to whether the leases have commenced.	* Represents the percentage of total square feet leased based on executed leases and without regard to whether the leases have commenced.																											* 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.	**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.																											**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 higher leased percentage in our industrial portfolio at ~~June 30, 2020,~~March 31, 2021, compared to ~~June 30, 2019,~~March 31, 2020, was due to leasing up speculative developments.

Vacancy Activity

The following table sets forth vacancy activity, shown in square feet, from our in-service rental properties for the ~~six~~three months ended ~~June 30, 2020~~March 31, 2021 (in thousands):


		Consolidated Properties	Unconsolidated Joint Venture Properties	Total Including Unconsolidated Joint Venture Properties		Consolidated Properties	Unconsolidated Joint Venture Properties	Total Including Unconsolidated Joint Venture Properties
Vacant square feet at December 31, 2019		4,540	406	4,946
Vacant square feet at December 31, 2020					Vacant square feet at December 31, 2020	3,716	150	3,866

Vacant space in completed developments	Vacant space in completed developments	972	—	972	Vacant space in completed developments	210	—	210

Expirations	Expirations	1,213	68	1,281	Expirations	1,177	106	1,283
Early lease terminations	Early lease terminations	1,280	—	1,280	Early lease terminations	42	—	42
Property structural changes/other		14	—	14

Leasing of previously vacant space	Leasing of previously vacant space	(3,535)	—	(3,535)	Leasing of previously vacant space	(1,780)	—	(1,780)
Vacant square feet at June 30, 2020		4,484	474	4,958
Vacant square feet at March 31, 2021					Vacant square feet at March 31, 2021	3,365	256	3,621

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 second generation 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 (in thousands):

Three Months Ended June 30, Six Months Ended June 30,
2020 2019 2020 2019
New Leasing Activity - First Generation 1,701 3,707 3,034 4,664
New Leasing Activity - Second Generation 1,314 554 1,573 857
Renewal Leasing Activity 1,939 3,083 2,595 4,586
Early Renewal Leasing Activity^*
1,253 1,454 1,311 1,915
Short-Term New Leasing Activity ^**
414 337 1,069 708
Short-Term Renewal Leasing Activity ^**
860 37 938 619
Non-Reportable Rental Operations Leasing Activity 1 — 1 1
Total Consolidated Leasing Activity 7,482 9,172 10,521 13,350
Unconsolidated Joint Venture Leasing Activity 153 137 1,128 210
Total Including Unconsolidated Joint Venture Leasing Activity 7,635 9,309 11,649 13,560
^*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.


	Three Months Ended March 31,
	2021	2020
New Leasing Activity - First Generation	2,918	1,333
New Leasing Activity - Second Generation	1,253	259
Renewal Leasing Activity	2,737	656
Early Renewal Leasing Activity *	136	58
Short-Term New Leasing Activity **	50	655
Short-Term Renewal Leasing Activity **	345	78

Total Consolidated Leasing Activity	7,439	3,039
Unconsolidated Joint Venture Leasing Activity	—	975
Total Including Unconsolidated Joint Venture Leasing Activity	7,439	4,014
* 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 commissions, 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 three ~~and six~~ months ended ~~June 30, 2020~~March 31, 2021 and ~~2019:~~2020:


		Square Feet of Leases (in thousands)				Percent of Expiring Leases Renewed				Average Term in Years				Estimated Tenant Improvement Cost per Square Foot					Leasing Costs per Square Foot					Square Feet of Leases (in thousands)	Percent of Expiring Leases Renewed		Average Term in Years			Estimated Tenant Improvement Cost per Square Foot	Leasing Costs per Square Foot
		2020	2019	2020		2019		2020	2019		2020	2019	2020	2019		2021	2020	2021			2020		2021	2020		2021	2020	2021	2020
Three Months	Three Months														Three Months
Consolidated - New Second Generation	Consolidated - New Second Generation	1,314	554					4.1	5.0		$1.92	$1.43	$1.89	$1.32	Consolidated - New Second Generation	1,253	259						7.3	4.1		$1.66	$3.87	$2.93	$1.95
Unconsolidated Joint Ventures - New Second Generation	Unconsolidated Joint Ventures - New Second Generation	—	70					—	6.7		—	1.87	—	2.41	Unconsolidated Joint Ventures - New Second Generation	—	—						—	—		$—	$—	$—	$—
Total - New Second Generation	Total - New Second Generation	1,314	624					4.1	5.2		$1.92	$1.47	$1.89	$1.44	Total - New Second Generation	1,253	259						7.3	4.1		$1.66	$3.87	$2.93	$1.95

Consolidated - Renewal	Consolidated - Renewal	1,939	3,083	75.1	%	82.3	%	5.2	4.8		$1.04	$0.83	$1.76	$1.57	Consolidated - Renewal	2,737	656	87.9		%	58.4	%	4.7	4.6		$0.31	$1.29	$1.39	$1.16
Unconsolidated Joint Ventures - Renewal	Unconsolidated Joint Ventures - Renewal	—	67	—	%	60.6	%	—	6.3		—	0.48	—	2.65	Unconsolidated Joint Ventures - Renewal	—	497	—		%	87.9	%	—	4.4		$—	$0.48	$—	$1.72
Total - Renewal	Total - Renewal	1,939	3,150	75.1	%	81.7	%	5.2	4.9		$1.04	$0.83	$1.76	$1.59	Total - Renewal	2,737	1,153	85.0		%	68.3	%	4.7	4.5		$0.31	$0.94	$1.39	$1.40

Six Months
Consolidated - New Second Generation		1,573	857					4.1	5.8		$2.24	$3.37	$1.90	$2.36
Unconsolidated Joint Ventures - New Second Generation		—	115					—	6.1		—	1.12	—	1.98
Total - New Second Generation		1,573	972					4.1	5.8		$2.24	$3.10	$1.90	$2.31

Consolidated - Renewal		2,595	4,586	70.1	%	82.4	%	5.0	4.5		$1.10	$0.88	$1.61	$1.41
Unconsolidated Joint Ventures - Renewal		497	95	87.9	%	68.4	%	4.4	6.0		0.48	0.78	1.72	2.43
Total - Renewal		3,092	4,681	72.4	%	82.1	%	4.9	4.5		$1.00	$0.88	$1.62	$1.43

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:


		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended March 31,
Ownership Type	Ownership Type	2020		2019		2020		2019		Ownership Type	2021		2020
Consolidated properties	Consolidated properties	26.6	%	28.0	%	26.9	%	26.5	%	Consolidated properties	25.3	%	27.8	%
Unconsolidated joint venture properties	Unconsolidated joint venture properties	—	%	37.6	%	44.1	%	28.9	%	Unconsolidated joint venture properties	—	%	44.1	%

Lease Expirations

The table below reflects our consolidated in-service portfolio lease expiration schedule at ~~June 30, 2020~~March 31, 2021 (in thousands, except percentage data and number of leases):


		Total Consolidated Portfolio									Industrial								Non-Reportable				Total Consolidated Portfolio						Industrial	Non-Reportable
Year of Expiration	Year of Expiration	Square Feet		Annual Rental Revenue*		Number of Leases	Square Feet		Annual Rental Revenue*		Square Feet		Annual Rental Revenue*		Year of Expiration	Square Feet		Annual Rental Revenue*		Number of Leases	Square Feet		Annual Rental Revenue*		Square Feet		Annual Rental Revenue*
Remainder of 2020		3,989		$	19,552	53	3,988		$	19,546	1		$	6
2021		12,356		58,522		137	12,356		58,522		—		—
Remainder of 2021															Remainder of 2021	7,035		$	34,062	83	7,027		$	33,949	8		$	113
2022	2022	18,554		78,822		150	18,537		78,630		17		192		2022	16,326		71,069		145	16,309		70,877		17		192
2023	2023	13,731		69,820		147	13,710		69,528		21		292		2023	14,742		74,378		155	14,721		74,086		21		292
2024	2024	14,394		71,908		136	14,389		71,846		5		62		2024	14,750		75,490		147	14,745		75,428		5		62
2025	2025	14,453		74,311		126	14,451		74,286		2		25		2025	16,055		87,455		143	16,053		87,430		2		25
2026	2026	10,212		49,047		55	10,212		49,047		—		—		2026	14,881		74,319		108	14,869		74,170		12		149
2027	2027	8,284		39,479		33	8,279		39,422		5		57		2027	11,713		58,484		44	11,708		58,427		5		57
2028	2028	8,283		54,363		32	8,164		50,876		119		3,487		2028	9,298		60,375		39	9,179		56,888		119		3,487
2029	2029	8,428		45,436		26	8,428		45,436		—		—		2029	8,174		44,811		28	8,174		44,811		—		—
2030 and Thereafter		21,284		125,023		64	21,284		125,023		—		—
2030															2030	9,416		51,957		39	9,416		51,957		—		—
2031 and Thereafter															2031 and Thereafter	15,543		106,204		42	15,528		106,027		15		177
Total Leased	Total Leased	133,968		$	686,283	959	133,798		$	682,162	170		$	4,121	Total Leased	137,933		$	738,604	973	137,729		$	734,050	204		$	4,554

Total Portfolio Square Feet	Total Portfolio Square Feet	138,452					138,241				211				Total Portfolio Square Feet	141,298					141,087				211
Percent Leased	Percent Leased	96.8	%				96.8	%			80.5	%			Percent Leased	97.6	%				97.6	%			96.8	%
* 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.	* 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.																											* 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.

Building 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.

2827

NoWe acquired three in-service buildings ~~were acquired~~ during the ~~six~~three months ended ~~June 30, 2020,~~March 31, 2021, including one property received through an asset distribution from an unconsolidated joint venture, and ~~six~~ten buildings ~~were acquired~~ during the year ended December 31, ~~2019.~~2020. The following table summarizes the acquisition price, percent leased at time of acquisition and in-place yields of industrial building acquisitions (in thousands, except percentage data):


		Year-to-Date 2020 Acquisitions										Full Year 2019 Acquisitions											Year-to-Date 2021 Acquisitions					Full Year 2020 Acquisitions
Type	Type	Acquisition Price*		In-Place Yield**		Percent Leased at Acquisition Date***		Acquisition Price*		In-Place Yield**		Percent Leased at Acquisition Date***		Type	Acquisition Price*		In-Place Yield**		Percent Leased at Acquisition Date***		Acquisition Price*		In-Place Yield**		Percent Leased at Acquisition Date***
Industrial	Industrial	$	—	—	%	—	%	$	217,106	4.1	%	88.4	%	Industrial	$	61,458	5.3	%	100.0	%	$	410,817	3.3	%	80.6		%

* Includes fair value of real estate assets and net acquired lease-related intangible assets, including above or below market leases, but excludes other acquired working capital assets and liabilities.
* Includes fair value of real estate assets and net acquired lease-related intangible assets, including above or below market leases, but excludes assumed debt, if applicable, and other acquired working capital assets and liabilities.														* Includes fair value of real estate assets and net acquired lease-related intangible assets, including above or below market leases, but excludes assumed debt, if applicable, and other acquired working capital assets and liabilities.
** 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, divided by the acquisition price of the acquired real estate. Annualized net rental payments are comprised of base rental payments, excluding additional amounts payable by tenants as reimbursement for operating expenses, less current annualized operating expenses not recovered through tenant reimbursements.	** 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, divided by the acquisition price of the acquired real estate. Annualized net rental payments are comprised of base rental payments, excluding additional amounts payable by tenants as reimbursement for operating expenses, less current annualized operating expenses not recovered through tenant reimbursements.																									** 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, divided by the acquisition price of the acquired real estate. Annualized net rental payments are comprised of base rental payments, excluding additional amounts payable by tenants as reimbursement for 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 acquisition.
*** 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).														*** 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 regularly work to identify, consider and pursue opportunities to dispose of properties on an opportunistic basis and 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, and we believe that evaluating our disposition activity is also useful to investors.

We sold ~~one~~two consolidated ~~building~~buildings during the ~~six~~three months ended ~~June 30, 2020~~March 31, 2021 and 28seven consolidated buildings during the year ended December 31, ~~2019.~~2020. The following table summarizes the sales prices, in-place yields and percent leased of industrial building dispositions (in thousands, except percentage data):


		Year-to-Date 2020 Dispositions										Full Year 2019 Dispositions											Year-to-Date 2021 Dispositions					Full Year 2020 Dispositions
Type	Type	Sales Price		In-Place Yield*		Percent Leased**		Sales Price		In-Place Yield*		Percent Leased**		Type	Sales Price		In-Place Yield*		Percent Leased**		Sales Price		In-Place Yield*		Percent Leased**
Industrial	Industrial	$	27,450	6.4	%	100.0	%	$	425,767	5.6	%	91.4	%	Industrial	$	84,150	4.4	%	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.	* 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.																									* 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.	** 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.																									** 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. At ~~June 30, 2020,~~March 31, 2021, we had ~~6.7~~10.4 million square feet of property under development with total estimated costs upon completion of ~~$856.8 million~~$1.40 billion compared to ~~6.4~~9.7 million square feet with total estimated costs upon completion of ~~$835.0 million~~$1.10 billion at ~~June 30, 2019.~~March 31, 2020. The square footage and estimated costs include both consolidated properties and unconsolidated joint venture development activity at 100%.

2928

The following table summarizes our properties under development at ~~June 30, 2020~~March 31, 2021 (in thousands, except percentage data):


Ownership Type	Ownership Type	Square Feet	Percent Leased		Total Estimated Project Costs		Total Incurred to Date		Amount Remaining to be Spent		Ownership Type	Square Feet	Percent Leased		Total Estimated Project Costs		Total Incurred to Date		Amount Remaining to be Spent
Consolidated properties	Consolidated properties	6,372	63	%	$	835,787	$	559,803	$	275,984	Consolidated properties	10,406	64.9	%	$	1,395,667	$	838,413	$	557,254
Unconsolidated joint venture properties		358	100	%	21,037		10,322		10,715
Total		6,730	65	%	$	856,824	$	570,125	$	286,699

Results of Operations

A summary of our operating results and property statistics is as follows (in thousands, except number of ~~properties and per share or Common Unit data)~~properties):


		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended March 31,
		2020		2019		2020		2019			2021		2020
Rental and related revenue from continuing operations	Rental and related revenue from continuing operations	$	226,374	$	213,107	$	445,129	$	423,072	Rental and related revenue from continuing operations	$	258,179	$	218,755
General contractor and service fee revenue		12,137		23,919		19,751		78,883

Operating income	Operating income	76,361		99,161		135,818		161,442		Operating income	107,502		59,457
General Partner	General Partner									General Partner
Net income attributable to common shareholders	Net income attributable to common shareholders	$	39,820	$	71,053	$	59,276	$	115,604	Net income attributable to common shareholders	$	79,362	$	19,456
Weighted average common shares outstanding		368,836		359,681		368,513		359,412
Weighted average common shares and potential dilutive securities		372,573		362,926		372,197		362,615

Partnership	Partnership									Partnership
Net income attributable to common unitholders	Net income attributable to common unitholders	$	40,176	$	71,674	$	59,802	$	116,607	Net income attributable to common unitholders	$	80,123	$	19,626
Weighted average Common Units outstanding		372,167		362,826		371,790		362,517
Weighted average Common Units and potential dilutive securities		372,573		362,926		372,197		362,615
General Partner and Partnership
Basic income per common share or Common Unit:
Continuing operations		$	0.11	$	0.20	$	0.16	$	0.32

Diluted income per common share or Common Unit:
Continuing operations		$	0.11	$	0.20	$	0.16	$	0.32

Number of in-service consolidated properties at end of period	Number of in-service consolidated properties at end of period	468		476		468		476		Number of in-service consolidated properties at end of period	483		461
In-service consolidated square footage at end of period	In-service consolidated square footage at end of period	138,452		138,715		138,452		138,715		In-service consolidated square footage at end of period	141,298		135,325
Number of in-service unconsolidated joint venture properties at end of period	Number of in-service unconsolidated joint venture properties at end of period	39		43		39		43		Number of in-service unconsolidated joint venture properties at end of period	37		39
In-service unconsolidated joint venture square footage at end of period	In-service unconsolidated joint venture square footage at end of period	11,109		12,867		11,109		12,867		In-service unconsolidated joint venture square footage at end of period	10,673		11,109

Supplemental Performance Measures

In addition to net income computed in accordance with GAAP, we assess and measure the overall operating results of the General Partner and the Partnership using certain non-GAAP supplemental performance measures, which include (i) Funds From Operations ("FFO"), (ii) PNOI and (iii) Same-Property Net Operating Income - Cash Basis ("SPNOI").

These non-GAAP metrics are commonly used by industry analysts and investors as supplemental operating performance measures of REITs and are viewed by management to be useful indicators of operating performance. Historical cost accounting for real estate assets in accordance with GAAP implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, many industry analysts and investors have considered presentation of operating results for real estate companies that use historical cost accounting to be insufficient by themselves. Management believes that the use of FFO, PNOI and SPNOI, combined with net income (which remains the primary GAAP measure of performance), improves the understanding of operating results of REITs among the investing public and makes comparisons of REIT operating results more meaningful.

The most comparable GAAP measure to FFO is net income (loss) attributable to common shareholders or common unitholders, while the most comparable GAAP measure to PNOI and SPNOI is income (loss) from continuing operations before income taxes.

FFO, PNOI and SPNOI each exclude expenses that materially impact our overall results of operations and, therefore, should not be considered as a substitute for net income (loss) attributable to common shareholders or common unitholders, income (loss) 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.

Funds From Operations

The National Association of Real Estate Investment Trusts ("~~NAREIT"~~Nareit") created FFO as a non-GAAP supplemental measure of REIT operating performance. FFO, as defined by ~~NAREIT,~~Nareit, represents GAAP net income (loss), excluding gains or losses from sales of real estate assets (including real estate assets incidental to our business) and related taxes, gains and losses from change in control, impairment charges related to real estate assets (including real estate assets incidental to our business) plus certain non-cash items such as real estate asset depreciation and amortization, and after similar adjustments for unconsolidated partnerships and joint ventures. We calculate FFO in accordance with the definition that was adopted by the Board of Governors of ~~NAREIT.~~Nareit.

Management believes that the use of FFO as a performance measure enables investors and analysts to readily identify the operating results of the long-term assets that form the core of a REIT's activity and assists them in comparing these operating results between periods or between different companies that use the ~~NAREIT~~Nareit definition of FFO.

The following table shows a reconciliation of net income attributable to common shareholders or common unitholders to the calculation of FFO attributable to common shareholders or common unitholders (in thousands):


		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended March 31,
		2020		2019		2020		2019			2021		2020
Net income attributable to common shareholders of the General Partner	Net income attributable to common shareholders of the General Partner	$	39,820	$	71,053	$	59,276	$	115,604	Net income attributable to common shareholders of the General Partner	$	79,362	$	19,456
Add back: Net income attributable to noncontrolling interests - common limited partnership interests in the Partnership	Add back: Net income attributable to noncontrolling interests - common limited partnership interests in the Partnership	356		621		526		1,003		Add back: Net income attributable to noncontrolling interests - common limited partnership interests in the Partnership	761		170
Net income attributable to common unitholders of the Partnership	Net income attributable to common unitholders of the Partnership	40,176		71,674		59,802		116,607		Net income attributable to common unitholders of the Partnership	80,123		19,626
Adjustments:	Adjustments:									Adjustments:
Depreciation and amortization	Depreciation and amortization	86,704		83,004		172,063		158,996		Depreciation and amortization	93,573		85,359
Company share of unconsolidated joint venture depreciation, amortization and other adjustments	Company share of unconsolidated joint venture depreciation, amortization and other adjustments	2,306		2,417		4,500		4,770		Company share of unconsolidated joint venture depreciation, amortization and other adjustments	2,257		2,194
Gains on sale of properties		(23)		(30,691)		(9,008)		(30,683)
Gain on sale of properties										Gain on sale of properties	(21,360)		(8,985)
Gain on land sales	Gain on land sales	(6,070)		(1,950)		(6,205)		(2,700)		Gain on land sales	(1,238)		(135)
Impairment charges	Impairment charges	—		—		5,626		—		Impairment charges	—		5,626
Income tax (benefit) expense triggered by sales of real estate assets		(150)		6,616		(210)		7,001
Income tax expense (benefit) not allocable to FFO										Income tax expense (benefit) not allocable to FFO	5,184		(60)
Gains on sales of real estate assets - share of unconsolidated joint ventures	Gains on sales of real estate assets - share of unconsolidated joint ventures	334		(2,028)		308		(4,527)		Gains on sales of real estate assets - share of unconsolidated joint ventures	(12,748)		(26)
FFO attributable to common unitholders of the Partnership	FFO attributable to common unitholders of the Partnership	$	123,277	$	129,042	$	226,876	$	249,464	FFO attributable to common unitholders of the Partnership	$	145,791	$	103,599
Additional General Partner Adjustments:	Additional General Partner Adjustments:									Additional General Partner Adjustments:
Net income attributable to noncontrolling interests - common limited partnership interests in the Partnership	Net income attributable to noncontrolling interests - common limited partnership interests in the Partnership	(356)		(621)		(526)		(1,003)		Net income attributable to noncontrolling interests - common limited partnership interests in the Partnership	(761)		(170)
Noncontrolling interest share of adjustments	Noncontrolling interest share of adjustments	(744)		(496)		(1,474)		(1,138)		Noncontrolling interest share of adjustments	(622)		(729)
FFO attributable to common shareholders of the General Partner	FFO attributable to common shareholders of the General Partner	$	122,177	$	127,925	$	224,876	$	247,323	FFO attributable to common shareholders of the General Partner	$	144,408	$	102,700

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~~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 1110 to the consolidated financial statements included in Part I, Item 1 of this Report shows a calculation of our PNOI for the three ~~and six~~ months ended ~~June 30,~~March 31, 2021 and 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"~~"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 ~~June 30, 2020~~March 31, 2021 includes all properties that we owned or jointly controlled at January 1, ~~2020,~~2021, which had both been owned or jointly controlled and had reached stabilization by January 1, ~~2019,~~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):


		Three Months Ended June 30,						Percent		Six Months Ended June 30,							Percent					Three Months Ended March 31,	Percent
		2020		2019		Change		2020		2019		Change			2021			2020		Change
Income from continuing operations before income taxes	Income from continuing operations before income taxes	$	40,047	$	78,185			$	59,599	$	123,338			Income from continuing operations before income taxes	$	85,388		$	19,552
Share of SPNOI from unconsolidated joint ventures	Share of SPNOI from unconsolidated joint ventures	4,677		4,542				9,319		8,986				Share of SPNOI from unconsolidated joint ventures	5,034			4,703
PNOI excluded from the "same-property" population	PNOI excluded from the "same-property" population	(12,917)		(8,305)				(23,687)		(13,937)				PNOI excluded from the "same-property" population	(15,928)			(4,250)
Earnings from Service Operations	Earnings from Service Operations	(1,731)		(730)				(2,777)		(3,108)				Earnings from Service Operations	(1,650)			(1,046)
Rental Operations revenues and expenses excluded from PNOI	Rental Operations revenues and expenses excluded from PNOI	(9,641)		(12,316)				(14,735)		(25,336)				Rental Operations revenues and expenses excluded from PNOI	(10,999)			(6,787)
Non-Segment Items	Non-Segment Items	133,344		85,092				278,090		199,097				Non-Segment Items	105,015			144,746
SPNOI	SPNOI	$	153,779	$	146,468	5.0	%	$	305,809	$	289,040	5.8	%	SPNOI	$	166,860		$	156,918	6.3	%

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 1110 to the consolidated financial statements included in Part I, Item 1 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 June 30,			Six Months Ended June 30,				Three Months Ended March 31,
		2020	2019	2020	2019		2021	2020
Number of properties	Number of properties	455	455	455	455	Number of properties	476	476
Square feet (in thousands) (1)	Square feet (in thousands) (1)	127,744	127,744	127,744	127,744	Square feet (in thousands) (1)	133,875	133,875
Average commencement occupancy percentage (2)	Average commencement occupancy percentage (2)	98.6%	98.2%	98.5%	97.9%	Average commencement occupancy percentage (2)	97.9%	97.0%
Average rental rate - cash basis (3)	Average rental rate - cash basis (3)	$4.80	$4.66	$4.78	$4.64	Average rental rate - cash basis (3)	$5.01	$4.85

(1) Includes the total square feet of the consolidated properties that are in the "same-property" population as well as 4.9 million square feet of space for unconsolidated joint ventures, which represents our ratable share of the 9.8 million total square feet of space for buildings owned by unconsolidated joint ventures that are in the "same-property" population.	(1) Includes the total square feet of the consolidated properties that are in the "same-property" population as well as 4.9 million square feet of space for unconsolidated joint ventures, which represents our ratable share of the 9.8 million total square feet of space for buildings owned by unconsolidated joint ventures that are in the "same-property" population.									(1) Includes the total square feet of the consolidated properties that are in the "same-property" population as well as 4.9 million square feet of space for unconsolidated joint ventures, which represents our ratable share of the 9.8 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.	(2) Commencement occupancy represents the percentage of total square feet where the leases have commenced.									(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 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.	(3) Represents the average annualized contractual rent per square foot 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.									(3) Represents the average annualized contractual rent per square foot 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.

Comparison of Three Months Ended ~~June 30, 2020~~March 31, 2021 to Three Months Ended ~~June 30, 2019~~March 31, 2020

Rental and Related Revenue

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


		Three Months Ended June 30,							Three Months Ended March 31,
		2020		2019			2021		2020
Rental and related revenue:	Rental and related revenue:					Rental and related revenue:
Industrial	Industrial	$	224,472	$	211,004	Industrial	$	256,670	$	216,952
Non-reportable Rental Operations and non-segment revenues	Non-reportable Rental Operations and non-segment revenues	1,902		2,103		Non-reportable Rental Operations and non-segment revenues	1,509		1,803
Total rental and related revenue from continuing operations	Total rental and related revenue from continuing operations	$	226,374	$	213,107	Total rental and related revenue from continuing operations	$	258,179	$	218,755

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

•We acquired ~~six~~13 properties and placed 3019 developments in service from January 1, ~~2019~~2020 to ~~June 30, 2020,~~March 31, 2021, which provided incremental revenues from continuing operations of ~~$12.7~~$21.7 million during the three months ended ~~June 30, 2020,~~March 31, 2021, as compared to the same period in ~~2019.~~2020.

•The increase in rental revenue included ~~$4.0~~$9.8 million of ~~higher~~ expense recoveries primarily related to ~~increased~~higher recoverable snow removable costs and recoverable real estate taxes compared to the same period in ~~2019.~~2020.

•~~Increases in~~Increased occupancy and rental rates ~~and occupancy~~ within our "same-property" portfolio, as well as the lease up of properties that were placed in service prior to January 1, ~~2019~~2020 but were not in the "same-property" portfolio, also contributed to the increase to rental and related revenue from continuing operations.

•The sale of 29nine in-service properties since January 1, ~~2019,~~2020, which did not meet the criteria to be classified within discontinued operations, resulted in a decrease of ~~$7.9~~$3.5 million to rental and related revenue from continuing operations in the three months ended ~~June 30, 2020,~~March 31, 2021, as compared to the same period in ~~2019,~~2020, 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):


		Three Months Ended June 30,							Three Months Ended March 31,
		2020		2019			2021		2020
Rental expenses:	Rental expenses:					Rental expenses:
Industrial	Industrial	$	17,017	$	17,190	Industrial	$	27,824	$	18,521
Non-reportable Rental Operations and non-segment expenses	Non-reportable Rental Operations and non-segment expenses	540		407		Non-reportable Rental Operations and non-segment expenses	306		322
Total rental expenses from continuing operations	Total rental expenses from continuing operations	$	17,557	$	17,597	Total rental expenses from continuing operations	$	28,130	$	18,843

Real estate taxes:	Real estate taxes:					Real estate taxes:
Industrial	Industrial	$	36,628	$	32,220	Industrial	$	41,164	$	36,239
Non-reportable Rental Operations and non-segment expenses	Non-reportable Rental Operations and non-segment expenses	135		155		Non-reportable Rental Operations and non-segment expenses	6		488
Total real estate tax expense from continuing operations	Total real estate tax expense from continuing operations	$	36,763	$	32,375	Total real estate tax expense from continuing operations	$	41,170	$	36,727

Overall, rental expenses from continuing operations increased by $9.3 million during the three months ended March 31, 2021, compared to the same period in 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 $4.4 million during the three months ended ~~June 30, 2020,~~March 31, 2021, compared to the same period in ~~2019.~~2020. The increase to real estate tax expense 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, ~~2019~~2020 to ~~June 30, 2020.~~March 31, 2021. These increases were partially offset by the impact of property sales that did not meet the criteria to be classified within discontinued operations.

Depreciation and Amortization

Depreciation and amortization expense from continuing operations was ~~$86.7~~$93.6 million and ~~$83.0~~$85.4 million for the three months ended ~~June 30, 2020~~March 31, 2021 and ~~2019,~~2020, respectively. The increase in depreciation and amortization expense for the three months ended ~~June 30, 2020~~March 31, 2021 was mainly the result of continued growth in our portfolio through ~~development.~~development and acquisition.

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 from unconsolidated joint ventures was $16.3 million and $2.5 million for the three months ended March 31, 2021 and 2020, respectively. During the three months ended March 31, 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 6 to the consolidated financial statements). We also recognized $2.3 million of equity in earnings related to our share of gains on land sales to unrelated parties by an unconsolidated joint venture. There were no such transactions in the corresponding period in 2020.

Gain on Sale of Properties - Continuing Operations

The ~~$30.6~~$21.4 million recognized as gain on sale of properties in continuing operations for the three months ended ~~June 30, 2019~~March 31, 2021 is the result of the sale of two properties that did not meet the criteria for inclusion in discontinued operations.

The $8.9 million recognized as gain on sale of properties in continuing operations for the three months ended March 31, 2020 was primarily the result of the sale of one property that did not meet the criteria for inclusion in discontinued operations.

~~There were no building dispositions~~

Impairment Charges

We did not recognize any impairment charges during the three months ended ~~June 30, 2020.~~March 31, 2021.

During the three months ended March 31, 2020, we recognized $5.6 million of impairment charges related to writing off pre-acquisition costs, primarily non-refundable purchase deposits, for certain planned purchases of undeveloped land that we did not anticipate completing at the time as the result of the economic impact 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 expense.

General and administrative expenses were ~~$13.6~~$24.2 million and ~~$13.4~~$21.8 million for the three months ended ~~June 30, 2020~~March 31, 2021 and ~~2019,~~2020, respectively. The following table sets forth the factors that led to the increased general and administrative expenses (in millions):


General and administrative expenses - three months ended ~~June 30, 2019~~March 31, 2020	$	~~13.4~~21.8
~~Decrease~~Increase to overall pool of overhead costs	~~(1.2)~~2.7

~~Overhead restructuring charges (1)~~	~~2.1~~
~~Increased absorption~~Impact of decreased allocation of costs ~~by consolidated~~to leasing and development activities ~~(2)~~(1)	~~(2.9)~~0.3
~~Decreased~~Increased allocation of costs to Service Operations and Rental Operations	~~2.2~~ (0.6)
General and administrative expenses - three months ended ~~June 30, 2020~~March 31, 2021	$	~~13.6~~24.2

(1) We ~~recognized~~capitalized $2.1 million of overhead restructuring charges, primarily related to benefits provided to certain associates that terminated employment as part of a voluntary retirement package offered to certain eligible employees during the three months ended June 30, 2020.

~~(2) We capitalized $1.4 million~~ and ~~$9.5~~$6.7 million of our total overhead costs to leasing and development, respectively, for consolidated properties during the three months ended ~~June 30, 2020,~~March 31, 2021, compared to capitalizing ~~$2.6 million~~$850,000 and ~~$6.0~~$8.7 million of such costs, respectively, for the three months ended ~~June 30, 2019.~~March 31, 2020. Combined overhead costs capitalized to leasing and development totaled ~~33.8%~~20.7% and ~~25.6%~~23.8% of our overall pool of overhead costs for the three months ended ~~June 30,~~March 31, 2021 and 2020, ~~and 2019,~~ respectively, with the ~~higher~~lower percentage being attributable to ~~increased~~lower development volume during the three months ended ~~June 30, 2020.~~March 31, 2021. Additionally, ~~$4.0~~$3.0 million of our total overhead costs, which were not capitalizable, were recorded as expenses and presented separately in the line item "Non-Incremental Costs Related to Successful Leases" on the Consolidated Statements of Operations during the three months ended ~~June 30, 2020,~~March 31, 2021, compared to ~~$3.4~~$2.5 million of such expenses during the three months ended ~~June 30, 2019.~~March 31, 2020.

Interest Expense

Interest expense from continuing operations was ~~$22.8~~$22.5 million and $23.5 million for the three months ended ~~June 30,~~March 31, 2021 and 2020, respectively. The decrease in interest expense from continuing operations for the three months ended March 31, 2021 was primarily due to lower average interest rates and ~~2019, respectively. Although our~~higher capitalized interest expense, partially offset by increased overall level of borrowings increased from 2019, as we financed growth in our portfolio, we have reduced our overall cost of borrowing through refinancing $766.3 million of higher rate unsecured notes since June 30, 2019.borrowings.

We capitalized ~~$6.8~~$8.0 million and ~~$6.2~~$6.9 million of interest costs for the three months ended ~~June 30,~~March 31, 2021 and 2020, respectively.

Debt Extinguishment

In January 2021, the Partnership assumed and ~~2019, respectively, which also contributed~~immediately repaid $40.2 million of unsecured debt related to the ~~lower interest expense from continuing operations.~~

~~Debt Extinguishment~~assets received as part of the dissolution of unconsolidated joint ventures (see Note 6 to the consolidated financial statements).

During the three months ended ~~June 30,~~March 31, 2020, ~~we repurchased and canceled $216.3~~the Partnership redeemed $300.0 million of unsecured notes, which had a stated interest rate of ~~3.88% pursuant to a tender offer completed by the Partnership. We~~4.38%. The Partnership recognized a loss of ~~$15.0~~$17.8 million in connection with the ~~cancellation~~redemption of these notes including the repayment premium and write-off of the deferred financing costs.

~~We did not repurchase any unsecured notes during the three months ended June 30, 2019.~~

~~Comparison of Six Months Ended June 30, 2020 to Six Months Ended June 30, 2019~~

~~Rental and Related Revenue~~

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

Six Months Ended June 30,
2020 2019
Rental and related revenue:
Industrial $ 441,424 $ 419,407
Non-reportable Rental Operations and non-segment revenues 3,705 3,665
Total rental and related revenue from continuing operations $ 445,129 $ 423,072

~~The following factors contributed to the increase in rental and related revenue from continuing operations:~~

•We acquired six properties and placed 30 developments in service from January 1, 2019 to June 30, 2020, which provided incremental revenues from continuing operations of $25.7 million in the six months ended June 30, 2020, as compared to the same period in 2019.

•Increased occupancy and rental rates within our "same-property" portfolio, as well as the lease up of properties that were placed in service prior to January 1, 2019 but were not in the "same-property" portfolio, also contributed to the increase to rental and related revenue from continuing operations.

•~~The increase in rental revenue included $7.4 million of higher expense recoveries primarily related to increased recoverable real estate taxes compared to the same period in 2019.~~

•The sale of 29 in-service properties, since January 1, 2019, which did not meet the criteria for inclusion within discontinued operations, resulted in a decrease of $15.9 million to rental and related revenue from continuing operations in the six months ended June 30, 2020, as compared to the same period in 2019, which partially offset the aforementioned increases to rental and related revenue from continuing operations.

•The increase in rental revenue was also partially offset by a $5.1 million increase in collectability reserves for contractual and straight-line receivables, primarily as a result of current economic conditions caused by the COVID-19 pandemic during the six months ended June 30, 2020.

~~Rental Expenses and Real Estate Taxes~~

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

Six Months Ended June 30,
2020 2019
Rental expenses:
Industrial $ 35,538 $ 37,411
Non-reportable Rental Operations and non-segment expenses 862 854
Total rental expenses from continuing operations $ 36,400 $ 38,265
Real estate taxes:
Industrial $ 72,867 $ 64,528
Non-reportable Rental Operations and non-segment expenses 623 289
Total real estate tax expense from continuing operations $ 73,490 $ 64,817

~~Overall, rental expenses from continuing operations decreased by $1.9 million in the six months endedJune 30, 2020, compared to the same period in 2019. The decrease to rental expenses was primarily due to lower snow removal costs compared to the same period in 2019.~~

Overall, real estate tax expense from continuing operations increased by $8.7 million in the six months ended June 30, 2020, compared to the same period in 2019. The increase to real estate tax expense was mainly the result of acquisitions and developments placed in service from January 1, 2019 to June 30, 2020 and increased tax assessments in certain of our markets. These increases were partially offset by the impact of property sales that did not meet the criteria to be classified within discontinued operations.

~~Depreciation and Amortization~~

~~Depreciation and amortization expense was $172.1 million and $159.0 million for the six months ended June 30, 2020and2019~~, ~~respectively. The increase in depreciation and amortization expense for the six months ended June 30, 2020 was mainly the result of continued growth in our portfolio through development.~~

~~Gain on Sale of Properties - Continuing Operations~~

The $8.9 million recognized as gain on sale of properties in continuing operations for the six months ended June 30, 2020 was primarily the result of the sale of one consolidated property that did not meet the criteria for inclusion in discontinued operations.

The $30.4 million recognized as gain on sale of properties in continuing operations for the six months ended June 30, 2019 was primarily comprised of the gains from the sale of one property that did not meet the criteria for inclusion in discontinued operations.

~~Impairment Charges~~

During the six months ended June 30, 2020, we recognized $5.6 million of impairment charges related to writing off pre-acquisition costs, primarily non-refundable purchase deposits, for certain planned purchases of undeveloped land that we no longer anticipate completing due to the economic impact of the COVID-19 pandemic.

~~We did not recognize any impairment charges during the six months ended June 30, 2019.~~

~~General and Administrative Expense~~

~~General and administrative expenses were $35.4 millionfor both the six months ended June 30, 2020 and 2019. The following table sets forth the factors that impacted general and administrative expenses (in millions):~~


~~General and administrative expenses - six months ended June 30, 2019~~	$	~~35.4~~
~~Decrease to overall pool of overhead costs~~	~~(0.1)~~

~~Overhead restructuring charges (1)~~	~~2.1~~
~~Increased absorption of costs by consolidated leasing and development activities (2)~~	~~(7.1)~~
~~Decreased allocation of costs to Service Operations and Rental Operations (3)~~	~~5.1~~
~~General and administrative expenses - six months ended June 30, 2020~~	$	~~35.4~~

(1) We recognized approximately $2.1 million of overhead restructuring charges, primarily related to benefits provided to certain associates that terminated employment as part of a voluntary retirement package offered to certain eligible employees during the six months ended June 30, 2020.

(2) We capitalized $2.3 million and $18.2 million of our total overhead costs to leasing and development, respectively, for consolidated properties during the six months ended June 30, 2020, compared to capitalizing $3.3 million and $11.0 million of such costs, respectively, for the six months ended June 30, 2019. Combined overhead costs capitalized to leasing and development totaled 28.5% and 11.9% of our overall pool of overhead costs for the six months ended June 30, 2020 and 2019, respectively, with the higher percentage being attributable to increased development volume for the six months ended June 30, 2020. Additionally, $6.6 million of our total overhead costs, which were not capitalizable, were recorded as expenses and presented separately in the line item "Non-Incremental Costs Related to Successful Leases" on the Consolidated Statements of Operations during the six months ended June 30, 2020, compared to $5.6 million of such expenses during the six months ended June 30, 2019.

~~(3) The decrease in allocation of costs to Service Operations and Rental Operations resulted from a lower volume of third-party construction projects during the six months ended June 30, 2020.~~

~~Interest Expense~~

~~Interest expense allocable to continuing operations was $46.3 millionand~~$45.6 million for the six months ended June 30, 2020 and 2019, respectively. The increase in interest expense from continuing operations for the six months ended June 30, 2020 was primarily due to increased overall borrowings, partially offset by lower average interest rates.

~~We capitalized $13.7 millionand$12.9 millionof interest costs during the six months ended June 30, 2020 and 2019, respectively.~~

~~Debt Extinguishment~~

During the six months ended June 30, 2020, we 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 redemption and repurchase of these unsecured notes, we recognized a total loss of $32.8 million including the redemption/repayment premium and write-off of the deferred financing costs.

~~We did not redeem or repurchase any unsecured notes during the six months ended June 30, 2019.~~

Liquidity and Capital Resources

Sources of Liquidity

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 ~~$29.9~~$9.0 million of cash on hand and no outstanding borrowings on the Partnership's $1.20 billion unsecured line of credit at ~~June 30, 2020.~~

March 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, ~~(and, to a lesser extent, acquisitions)~~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.

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.

We are subject to a number of risks ~~which have intensified as the result of the COVID-19 outbreak,~~ 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

We use the Partnership's unsecured line of credit (which is guaranteed by the General Partner) as a temporary source of capital to fund development activities, acquire additional rental properties and provide working capital. 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 line of credit bears interest at 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 two six-month extension options.

In ~~February 2020,~~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 ~~consolidated joint venture obtained an $18.4 million secured loan from a third party financial institution, with a fixed annual interest~~new rate, ~~of 3.41%~~ and ~~a maturity date of March 1, 2035.~~the Partnership has no other material debt arrangements that

~~Also in February 2020,~~are indexed to LIBOR, we ~~issued $325.0 million of senior unsecured notes, which bear interest at~~believe that the transition will not have a ~~stated interest rate of 3.05%, have an effective interest rate of 3.19%, and mature~~material impact on ~~March 1, 2050, for cash proceeds of $316.4 million.~~our consolidated financial statements.

In ~~June 2020, we~~January 2021, the Partnership issued ~~$350.0~~$450.0 million of senior unsecured notes, which bear interest at a stated interest rate of 1.75%, have an effective interest rate of ~~1.85%~~1.83%, and mature on ~~July~~February 1, ~~2030,~~2031, for cash proceeds of ~~$346.8~~$446.6 million.

~~The~~Such unsecured notes, as well as other debt securities issued by the Partnership, ~~has issued debt securities~~are governed 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, as well as applicable covenants under our unsecured line of credit, at ~~June 30, 2020.~~March 31, 2021.

The Partnership's unsecured line of credit has an interest rate that is indexed to LIBOR. In 2017, the Alternative Reference Rates Committee ("ARRC") proposed that the Secured Overnight Funding Rate ("SOFR") replace LIBOR. ARRC also proposed that the transition to SOFR from LIBOR take place by the end of 2021. As the Partnership's unsecured line of credit agreement has provisions that allow for automatic transition to a new rate, the Partnership has no other material debt arrangements that are indexed to LIBOR, and has settled all of our outstanding interest rate swaps in November 2019, we believe that the transition will not have a material impact on our consolidated financial statements.

At ~~June 30, 2020,~~March 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 ~~long-term~~ debt, ~~upon maturity~~development and future acquisitions and for other general corporate purposes.

~~The~~In February 2021, the General Partner ~~has an~~terminated its previous equity distribution agreement for the ATM equity program ~~that allows it~~and entered into a new equity distribution agreement pursuant to ~~issue new common shares at $0.01 par value per share,~~which the General Partner may sell from time to time ~~with~~up to an aggregate offering price of ~~up to~~ $400.0 ~~million.~~million of its common stock through sales agents or forward sellers. During the three months ended ~~June 30, 2020,~~March 31, 2021, the General Partner issued ~~2.0 million~~210,000 common shares under its predecessor ATM equity program, resulting in net proceeds of ~~$70.6~~$8.3 million after paying total compensation of $714,000 to the applicable sales agents. Including 8,700 shares issued during the three months ended March 31, 2020, the General Partner issued a total of 2.0 million common shares under its ATM equity program for the six months ended June 30, 2020, resulting in net proceeds of $70.9 million after paying total compensation of $717,000$84,000 to the applicable sales agents. Other fees related to these issuances, totaling ~~$204,000,~~$102,000, were also paid during the ~~six~~three months ended ~~June 30, 2020. As of June 30, 2020,~~March 31, 2021. Also during the three months ended March 31, 2021, the General Partner issued 513,000 shares pursuant to its current ATM equity program, ~~still~~resulting in net proceeds of $21.6 million after paying total compensation of $218,000 to the applicable sales agents. Other fees related to these issuances, totaling $186,000, were also paid during the three months ended March 31, 2021. As of March 31, 2021, the new ATM equity program had ~~$118.9~~$378.2 million worth of ~~new~~ common shares available to issue.

Sale of Real Estate Assets

We regularly work to identify, consider and pursue opportunities to dispose of ~~non-strategic~~ properties ~~on an opportunistic basis and on~~in a ~~basis~~manner that is generally consistent with our strategic plans. Our ability to dispose of such properties on favorable terms, or at all, 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 the disposition of non-strategic properties, potential future adverse changes to general market and economic conditions ~~including the uncertain economic outlook caused by the COVID-19 pandemic,~~ could negatively impact our further ability to dispose of such properties.

Sales of land and properties provided ~~$34.5~~$85.5 million and ~~$97.5~~$27.1 million in net proceeds during the ~~six~~three months ended ~~June 30,~~March 31, 2021 and 2020, ~~and 2019,~~ respectively.

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 the three months ended March 31, 2021, our share of sale and capital distributions from unconsolidated joint ventures totaled $3.5 million. There were no such distributions during the three months ended March 31, 2020.

Uses of Liquidity

Our principal uses of liquidity include the following:

•property investment;

•leasing/capital costs;

•dividends and distributions to shareholders and unitholders;

•~~long-term~~ 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 higher barrier markets with the highest growth potential. 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.

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):


		Six Months Ended June 30,							Three Months Ended March 31,
		2020		2019			2021		2020
Second generation tenant improvements	Second generation tenant improvements	$	7,975	$	6,999	Second generation tenant improvements	$	6,940	$	5,169
Second generation leasing costs	Second generation leasing costs	7,297		11,511		Second generation leasing costs	6,764		1,677
Building improvements	Building improvements	1,790		1,953		Building improvements	972		1,259
Total second generation capital expenditures	Total second generation capital expenditures	$	17,062	$	20,463	Total second generation capital expenditures	$	14,676	$	8,105
Development of real estate investments	Development of real estate investments	$	333,212	$	205,315	Development of real estate investments	$	140,432	$	170,900
Other deferred leasing costs	Other deferred leasing costs	$	17,306	$	11,152	Other deferred leasing costs	$	8,007	$	12,341

The capital expenditures in the table above include the capitalization of internal overhead costs. We capitalized ~~$2.3~~$2.1 million and ~~$3.3 million~~$850,000 of overhead costs that are incremental to executing leases, including both first and second generation leases, during the ~~six~~three months ended ~~June 30,~~March 31, 2021 and 2020, ~~and 2019,~~ respectively. We capitalized ~~$18.2~~$6.7 million and ~~$11.0~~$8.7 million of overhead costs related to development activities, including both development and tenant

improvement projects on first and second generation space, during the ~~six~~three months ended ~~June 30,~~March 31, 2021 and 2020, ~~and 2019,~~ respectively. Combined overhead costs capitalized to leasing and development totaled ~~28.5%~~20.7% and ~~11.9%~~23.8% of our overall pool of overhead costs for the ~~six~~three months ended ~~June 30,~~March 31, 2021 and 2020, ~~and 2019,~~ respectively.

Further discussion of the capitalization of overhead costs can be found herein, in the quarter-to-quarter ~~and year-to-year comparisons~~comparison of general and administrative expenses of this Item 2 as well as in the Critical Accounting Policies section of Management's Discussion and Analysis of Financial Condition and Results of Operations in our ~~2019~~2020 Annual Report.

In addition to the capitalization of overhead costs, the totals for development of real estate assets in the table above include the capitalization of ~~$13.7~~$8.0 million and ~~$12.9~~$6.9 million of interest costs during the ~~six~~three months ended ~~June 30,~~March 31, 2021 and 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 ~~product type, the~~ nature of a tenant's operations, the specific physical characteristics of each individual property and the market in which the property is located.

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 ~~$0.235~~$0.255 per common share or Common Unit in the first ~~and second quarters~~quarter of ~~2020,~~2021, and the General Partner's board of directors declared dividends or distributions of ~~$0.235~~$0.255 per common share or Common Unit for the ~~third~~second quarter of ~~2020.~~2021.

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 ~~June 30, 2020~~March 31, 2021 had a face value totaling ~~$3.11~~$3.57 billion with a weighted average interest rate of ~~3.38%~~3.18% and maturities at various dates through 2050. Of this total amount, we had ~~$3.06~~$3.51 billion of unsecured debt, ~~$50.6~~$59.6 million of secured debt and no outstanding borrowings on our unsecured line of credit at ~~June 30, 2020.~~March 31, 2021. Scheduled principal amortization, maturities, ~~and early~~ repayments of ~~such~~outstanding line of credit balances and repayments of assumed joint venture debt totaled ~~$518.2~~$336.2 million for the ~~six~~three months ended ~~June 30, 2020.~~March 31, 2021.

The following table is a summary of the scheduled future amortization and maturities of our indebtedness at ~~June 30, 2020~~March 31, 2021 (in thousands, except percentage data):


		Future Repayments													Future Repayments
Year	Year	Scheduled Amortization		Maturities		Total		Weighted Average Interest Rate of Future Repayments		Year	Scheduled Amortization		Maturities		Total		Weighted Average Interest Rate of Future Repayments
Remainder of 2020		$	2,404	$	—	$	2,404	4.94	%
2021		4,003		9,047		13,050		5.49	%
Remainder of 2021										Remainder of 2021	$	3,406	$	—	$	3,406	5.05	%
2022	2022	4,217		83,740		87,957		3.99	%	2022	4,646		83,740		88,386		3.99	%
2023	2023	4,444		250,000		254,444		3.75	%	2023	4,893		250,000		254,893		3.75	%
2024	2024	4,685		300,000		304,685		3.92	%	2024	5,155		300,000		305,155		3.92	%
2025	2025	4,610		—		4,610		5.15	%	2025	5,102		—		5,102		5.08	%
2026	2026	2,724		375,000		377,724		3.37	%	2026	3,238		375,000		378,238		3.38	%
2027	2027	1,077		475,000		476,077		3.18	%	2027	1,615		475,000		476,615		3.18	%
2028	2028	744		500,000		500,744		4.45	%	2028	1,307		500,000		501,307		4.45	%
2029	2029	770		400,000		400,770		2.88	%	2029	1,359		400,000		401,359		2.88	%
2030	2030	797		350,000		350,797		1.86	%	2030	1,413		350,000		351,413		1.86	%
2031										2031	1,469		450,000		451,469		1.84	%
Thereafter	Thereafter	3,705		332,402		336,107		3.20	%	Thereafter	3,261		347,734		350,995		3.26	%
		$	34,180	$	3,075,189	$	3,109,369	3.38	%		$	36,864	$	3,531,474	$	3,568,338	3.18	%

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.

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 ~~March 2020, we redeemed $300.0~~January 2021, the Partnership assumed, and immediately repaid $40.2 million of unsecured ~~notes that were scheduled~~debt associated with the properties received as a result of the dissolution of the joint ventures (see Note 6 to ~~mature in June 2022.~~

~~In June 2020, we repurchased and canceled $216.3 million of unsecured notes that were scheduled to mature in October 2022 pursuant to a tender offer completed by~~ the ~~Partnership.~~consolidated financial statements).

Contractual Obligations

Aside from ~~repayments~~repayment of long-term debt and the ~~issuances~~issuance of senior unsecured notes described in the Sources of Liquidity section above, there have been no other material changes in our outstanding commitments since December 31, ~~2019,~~2020, as previously discussed in our ~~2019~~2020 Annual Report.

Historical Cash Flows

Cash, cash equivalents and restricted cash were ~~$58.6~~$22.2 million and ~~$17.0~~$190.5 million at ~~June 30,~~March 31, 2021 and 2020, ~~and 2019,~~ respectively. The following table highlights significant changes in net cash associated with our operating, investing and financing activities (in millions):


		Six Months Ended June 30,							Three Months Ended March 31,
		2020		2019			2021		2020
General Partner

Net cash provided by operating activities	Net cash provided by operating activities	$	261.2	$	257.8	Net cash provided by operating activities	$	150.1	$	114.6
Net cash used for investing activities	Net cash used for investing activities	$	(334.0)	$	(331.7)	Net cash used for investing activities	$	(210.3)	$	(158.7)
Net cash provided by financing activities	Net cash provided by financing activities	$	10.0	$	65.4	Net cash provided by financing activities	$	15.1	$	113.2

Partnership
Net cash provided by operating activities		$	261.2	$	257.8
Net cash used for investing activities		$	(334.0)	$	(331.7)
Net cash provided by financing activities		$	10.0	$	65.4

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 was driven by increasing our asset base through development, financed through equity or low cost debt issuances, and increasing occupancy and rental rates within our existing portfolio.

Investing Activities

Highlights of significant cash sources and uses are as follows:

•During the ~~six~~three months ended ~~June 30, 2020,~~March 31, 2021, we paid cash of $34.7 million for building acquisitions. We did not acquire any ~~buildings.~~buildings during the three months ended March 31, 2020. We paid cash of ~~$108.2 million for building acquisitions during the six months ended June 30, 2019. We paid cash of $95.9~~$64.6 million for undeveloped land acquisitions during the ~~six~~three months ended ~~June 30, 2020,~~March 31, 2021, compared to ~~$200.9~~$87.0 million for land acquisitions during the same period in ~~2019.~~2020.

•Real estate development costs were ~~$333.2~~$140.4 million during the ~~six~~three months ended ~~June 30, 2020,~~March 31, 2021, compared to ~~$205.3~~$170.9 million during the same period in ~~2019.~~2020.

•Sales of land and properties provided ~~$34.5~~$85.5 million in net proceeds during the ~~six~~three months ended ~~June 30, 2020,~~March 31, 2021, compared to ~~$97.5~~$27.1 million during the same period in ~~2019.~~2020.

•We issued a secured promissory note to a borrower for net proceeds of $31.7 million during the three months ended March 31, 2021. We did not issue any notes during the same period in 2020.

•We did not receive repayments of notes receivable from property sales for the three months ended March 31, 2021. During the ~~six~~three months ended ~~June 30,~~March 31, 2020, we received repayments of the final $110.0 million on our notes receivable related to the disposition of our medical office portfolio in ~~2017, compared to $130.0 million of repayments of notes receivable from property sales during the same period in 2019.~~2017.

•Second generation tenant improvements, leasing costs and building improvements totaled ~~$17.1~~$14.7 million during the ~~six~~three months ended ~~June 30, 2020~~March 31, 2021 compared to ~~$20.5~~$8.1 million during the same period in ~~2019.~~

•~~For the six months ended June 30, 2020, we made capital contributions of $4.8 million to unconsolidated joint ventures, compared to $6.0 million during the same period in 2019.~~2020.

Financing Activities

The following items highlight significant capital transactions:

•During the ~~six~~three months ended ~~June 30, 2020,~~March 31, 2021, the General Partner issued ~~2.0 million~~723,000 common shares pursuant to its ATM equity ~~program~~programs for net proceeds of ~~$70.7~~$29.5 million, compared to ~~1.1 million~~8,700 common shares for net proceeds of ~~$35.7 million~~$181,000 during the same period in ~~2019.~~2020.

•During the ~~six~~three months ended ~~June 30,~~March 31, 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. During the three months ended March 31, 2020, the Partnership issued $325.0 million of senior unsecured notes, which bear interest at a stated interest rate of 3.05%, have an effective interest rate of 3.19% and mature on March 1, 2050, for cash proceeds of $316.4 million. The Partnership also 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, for cash proceeds of $346.8 million. We did not issue any senior unsecured notes during the same period in 2019.

•~~During~~The Partnership assumed, and immediately repaid, $40.2 million of unsecured debt in connection the ~~six~~distribution of the majority of the assets (see Note 6 to the consolidated financial statements) from two unconsolidated joint ventures during the three months ended ~~June 30, 2020, the~~March 31, 2021. The Partnership paid total cash of ~~$547.0~~$316.7 million for the early redemption of $300.0 million of senior unsecured notes that were scheduled to mature in June 2022 ~~and the early repurchase and cancellation of $216.3 million of senior unsecured notes due in October 2022. We did not repurchase or redeem any senior unsecured notes~~ during the ~~six months ended June 30, 2019.~~same period in 2020.

•The Partnership did not obtain any secured loans during the three months ended March 31, 2021. During the ~~six~~three months ended ~~June 30,~~March 31, 2020, a consolidated joint venture of the Partnership obtained a secured loan from a third party financial institution for gross proceeds of $18.4 million. ~~We did not obtain any secured loans~~

•The Partnership decreased net borrowings on its unsecured line of credit by $295.0 million during the three months ended March 31, 2021 and increased net borrowings by $200.0 million during the same period in ~~2019.~~

•~~During the six months ended June 30, 2019, the Partnership repaid three secured loans for $41.7 million. We did not repay secured loans during the six months ended June 30,~~ 2020.

•We increased borrowings on the Partnership's unsecured line of credit by $222.0 million during the six months ended June 30, 2019. For the six months ended June 30, 2020, we did not have any net borrowings on the unsecured line of credit.

•We paid regular cash dividends totaling ~~$173.1~~$95.3 million and ~~$154.6~~$86.6 million during the ~~six~~three months ended ~~June 30,~~March 31, 2021 and 2020, ~~and 2019,~~ respectively.

•Changes in book cash overdrafts are classified as financing activities within our Consolidated Statements of Cash Flows. Book cash overdrafts were ~~$30.2~~$2.0 million at ~~June 30, 2019. We did not have any~~March 31, 2021. There were no book cash overdrafts at ~~June 30,~~March 31, 2020.

•~~We paid off a special assessment bond for $9.9 million which was reflected within Other Financing Activities on our Consolidated Statements of Cash Flows during six months endedJune 30, 2019. We did not make similar significant repayments during the six months ended June 30, 2020.~~

~~Off Balance Sheet Arrangements - Investments in Unconsolidated Joint Ventures~~

We analyze our investments in unconsolidated joint ventures to determine if they meet the criteria for classification as a VIE and would require consolidation. We (i) evaluate the sufficiency of the total equity 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 owning entities) that lack substantive participating or kick out rights and (iii) establish whether or not 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 (i) are the sole entity that has the power to direct the activities of the VIE and (ii) have the obligation or rights to absorb the VIE's losses or receive its benefits, then we would be determined to be the primary beneficiary of the VIE and would consolidate it. At the end of each reporting period,

we re-assess our conclusions as to which, if any, party within the VIE is considered the primary beneficiary. To the extent that our joint ventures do not qualify as VIEs, we further assess each joint venture partner's substantive participating rights to determine if the venture should be consolidated. There were no unconsolidated joint ventures that met the criteria to be a VIE at June 30, 2020.

We have equity interests in unconsolidated partnerships and limited liability companies that primarily own and operate rental properties and hold land for development. These unconsolidated joint ventures are primarily engaged in the operation and development of industrial real estate properties. These investments provide us with increased market share and tenant and property diversification. The equity method of accounting is used for these investments in which we have the ability to exercise significant influence, but not control, over operating and financial policies. As a result, the assets and liabilities of these entities are not included on our balance sheet. Our investments in and advances to unconsolidated joint ventures represented approximately 2% of our total assets at June 30, 2020 and December 31, 2019. Total assets of our unconsolidated joint ventures were $421.6 million and $419.1 million at June 30, 2020 and December 31, 2019, respectively. The combined revenues of our unconsolidated joint ventures totaled $13.7 million and $30.0 million for the six months ended June 30, 2020 and 2019, respectively.

We have guaranteed the repayment of certain secured and unsecured loans of our unconsolidated joint ventures. The outstanding balances on the guaranteed portion of these loans totaled $59.9 million and $150.8 million at June 30, 2020 and 2019, respectively.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to interest rate changes primarily as a result of our line of credit and our 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, from time to time, 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).


		Remainder of 2020			2021			2022			2023			2024			Thereafter			Face Value			Fair Value			Remainder of 2021			2022			2023			2024			2025			Thereafter			Face Value			Fair Value
Long-Term Debt:	Long-Term Debt:																								Long-Term Debt:
Fixed rate secured debt	Fixed rate secured debt	$	2,104		$	12,750		$	3,917		$	4,144		$	4,385		$	21,429		$	48,729		$	41,591	Fixed rate secured debt	$	3,106		$	4,346		$	4,593		$	4,855		$	4,702		$	36,396		$	57,998		$	62,991
Weighted average interest rate	Weighted average interest rate	5.63		%	5.62		%	5.65		%	5.66		%	5.67		%	4.15		%	4.98		%			Weighted average interest rate	5.53		%	5.54		%	5.55		%	5.56		%	5.51		%	4.18		%	4.69		%
Variable rate secured debt	Variable rate secured debt	$	300		$	300		$	300		$	300		$	300		$	400		$	1,900		$	1,900	Variable rate secured debt	$	300		$	300		$	300		$	300		$	400		$	—		$	1,600		$	1,600
Weighted average interest rate	Weighted average interest rate	0.14		%	0.14		%	0.14		%	0.14		%	0.14		%	0.14		%	0.14		%			Weighted average interest rate	0.08		%	0.08		%	0.08		%	0.08		%	0.08		%	N/A			0.08		%
Fixed rate unsecured debt	Fixed rate unsecured debt	$	—		$	—		$	83,740		$	250,000		$	300,000		$	2,425,000		$	3,058,740		$	3,347,567	Fixed rate unsecured debt	$	—		$	83,740		$	250,000		$	300,000		$	—		$	2,875,000		$	3,508,740		$	3,623,326
Weighted average interest rate	Weighted average interest rate	N/A			N/A			3.93		%	3.72		%	3.90		%	3.23		%	3.35		%			Weighted average interest rate	N/A			3.93		%	3.72		%	3.90		%	N/A			3.01		%	3.16		%

As the above table incorporates only those exposures that existed at ~~June 30, 2020,~~March 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 ~~we have~~there are outstanding borrowings, will be affected by fluctuations in the LIBOR indices or applicable replacement rates, ~~as well as~~ changes in our credit ~~rating.~~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.

Item 4. Controls and Procedures

Controls and Procedures (General Partner)

(a) Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. These disclosure controls and procedures are further designed to ensure that such information is accumulated and communicated to management, including the Chief Executive Officer and the Chief Financial Officer, to allow timely decisions regarding required disclosure.

We carried out an evaluation, under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rules 13a-15 and 15d-15. Based upon the foregoing, the Chief Executive Officer and the Chief Financial Officer concluded that, as of the end of the period covered by this Report, our disclosure controls and procedures were effective.

(b) Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting during the period covered by this Report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Controls and Procedures (Partnership)

(a) Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. These disclosure controls and procedures are further designed to ensure that such information is accumulated and communicated to management, including the General Partner's Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

We carried out an evaluation, under the supervision and with the participation of management, including the General Partner's Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rules 13a-15 and 15d-15. Based upon the foregoing, the General Partner's Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this Report, our disclosure controls and procedures were effective.

(b) Changes in Internal Control over Financial Reporting

4742

Part II - Other Information

Item 1. Legal Proceedings

From time to time, we are parties to a variety of legal proceedings and claims arising in the ordinary course of our businesses. While these matters generally are covered by insurance, there is no assurance that our insurance will cover any particular proceeding or claim. We are not subject to any material pending legal proceedings other than routine litigation arising in the ordinary course of business. We presently believe that all of the proceedings to which we were subject as of ~~June 30, 2020,~~March 31, 2021, taken as a whole, will not have a material adverse effect on our liquidity, business, financial condition or results of operations.

Item 1A. Risk Factors

In addition to the information set forth in this Report, you also should carefully review and consider the information contained in our other reports and periodic filings that we make with the SEC, including, without limitation, the information contained under the caption "Item 1A. Risk Factors" in our ~~2019~~2020 Annual Report. The risks and uncertainties described in our ~~2019~~2020 Annual Report are not the only risks that we face. Additional risks and uncertainties not currently known to us, or that we presently deem to be immaterial, also may materially adversely affect our business, financial condition and results of operations. ~~Significant additional~~There have not been any material changes to the risk factors that we face since our ~~2019~~2020 Annual ~~Report are described below:~~

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

An outbreak of COVID-19, a respiratory disease caused by a novel corona virus, has spread internationally, including in the United States where we operate. In March 2020, the World Health Organization declared the outbreak to be a pandemic, and the President of the United States declared it a national emergency. Globally, population movement and trade have been restricted to varying degrees. Within the United States, various state and local governmental authorities have issued stay-at-home orders, proclamations and/or directives aimed at minimizing the spread of COVID-19. Many of these measures have been scaled back using various phased re-opening plans but, due to surges in infections in several major geographic areas, some of these re-opening plans have been halted or have not proceeded according to their original schedules. We do not yet know the duration of the pandemic or all of its future effects, but it has already had negative effects on global health and the world economy.

The economic consequences of the COVID-19 pandemic have affected substantially all of our tenant base in various ways and with varying magnitudes. We have executed rent deferral agreements with certain of our tenants to assist them in maintaining viable operations through the pandemic. The total amount of rental payments deferred pursuant to these arrangements is slightly less than 1.0% of annualized gross rental revenues. The substantial majority of these deferral agreements have repayment terms of one year or less, which results in many of the deferred amounts having revised payment dates in the second half of 2020. Some of the tenants with whom we have entered into deferral arrangements may have received government assistance. We cannot predict the continued viability of the tenants with whom we've executed these agreements. There is a risk that they will default and the amounts deferred, along with future amounts due under the leases, will not ultimately be collectible.

As the result of current uncertain economic conditions, even tenants that are now in sound financial condition may be adversely affected over the longer term if the economic recession caused by the pandemic extends for a long period of time. These possible events could in turn disrupt, or further disrupt, our tenants' businesses and their ability to satisfy rental payments. Such a prolonged recession could also adversely impact our ability to lease vacant space.

We have not started any new speculative development projects since the beginning of the pandemic. Our ability to pursue further development opportunities will depend on future events, including the duration and severity of the pandemic, the length of time it takes for normal economic and operating conditions to resume, additional governmental actions that may be taken and/or extensions of time for restrictions that have been imposed to date, and numerous other uncertainties which we cannot predict at this time.

~~A prolonged COVID-19 outbreak could negatively impact our operations and financial condition.~~

Should the major public health issues caused by the COVID-19 outbreak persist for an extended period of time, we could be adversely affected by actions limiting trade and population movement, the movement of goods through the supply chain, and other impacts to business and consumer demand that may diminish the demand and rents for our properties. To date, only an insignificant portion of our tenant base has declared bankruptcy as the result of the COVID-19 pandemic. In the event of the default or 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.

As a result, our financial condition, results of operations 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, and 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.

~~Our stock price could be negatively impacted by COVID-19.~~

The COVID-19 outbreak has resulted in significant market volatility, including large swings in global stock prices that have adversely affected trade and global and local economies. These conditions may worsen in future periods and negatively impact our share price.

~~COVID-19 could adversely affect our ability to finance our operations.~~

The outbreak has also adversely impacted financial institutions which could, in future periods, negatively impact their willingness to extend credit or result in adverse changes to the terms at which credit is extended. The United States Federal Government has taken certain measures to support continued liquidity and availability of capital, but there is no guarantee that these measures will continue to be successful. These potential risks could negatively impact our future ability to access capital, which would negatively impact our liquidity and our ability to execute our strategic plans.

~~The ability of our employees to work may be adversely impacted by COVID-19.~~

Our workforce, including key employees, could be adversely impacted by the outbreak in future periods. Currently, some of our employees are working remotely and some are working on-site. The impacts of the outbreak could, among other things, negatively affect (i) the operation of our properties, (ii) the timeliness 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.Report.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

(a) Unregistered Sales of Equity Securities

None

(b) Use of Proceeds

None

From time to time, we 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").

On January ~~29, 2020,~~27, 2021, 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 Chairman of the finance committee of the board of directors of planned repurchases within these limits. We did not repurchase any equity securities through the Repurchase Program during the three months ended ~~June 30, 2020.~~March 31, 2021.

Item 3. Defaults upon Senior Securities

During the period covered by this Report, we did not default under the terms of any of our material indebtedness.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

During the period covered by this Report, there was no information required to be disclosed by us in a Current Report on Form 8-K that was not so reported, nor were there any material changes to the procedures by which our security holders may recommend nominees to the General Partner's board of directors.

Item 6. Exhibits

(a) Exhibits


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 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 October 25, 2018, and incorporated herein by this reference).

4.1						~~Eighteenth~~Nineteenth Supplemental Indenture, dated as of ~~June 29, 2020,~~January 21, 2021, by and between the ~~Operating~~ Partnership and the ~~Bank of New York Mellon Trust Company, N.A. (as successor to J.P.Morgan Trust Company, National Association), as trustee,~~T ru stee, including the form of global note evidencing the 1.750% Senior Notes Due ~~2030~~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 ~~June~~January 21, 2021, and incorporated herein by this reference).

10.1						Equity Distribution Agreement, dated February 19, 2021, by and among the Company, the Partn ership 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).

10.2						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).

10.3						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, ~~2020,~~2021, and incorporated herein by this reference).

10.4						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).











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.**

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)




*			Filed herewith.


**			The certifications attached as Exhibits 32.1, 32.2, 32.3 and 32.4 accompany this Quarterly Report on Form 10-Q 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.

5245

SIGNATURES

Pursuant to the requirements 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

						/s/ Mark A. Denien
						Mark A. Denien
						Executive Vice President and Chief Financial 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

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


Date:	~~July 31, 2020~~April 30, 2021

5346


Balance at December 31, 2018	$	3,589	$	5,244,375	$	(4,676)	$	(585,087)	$	55,042	$	4,713,243
Net income	—		—		—		115,604		987		116,591
Other comprehensive loss	—		—		(24,041)		—		—		(24,041)
Issuance of common shares	13		42,115		—		—		—		42,128
Stock-based compensation plan activity	4		3,892		—		(641)		6,675		9,930
Contributions from noncontrolling interests	—		—		—		—		312		312




Distributions to common shareholders ($0.43 per share)	—		—		—		(154,550)		—		(154,550)

Distributions to noncontrolling interests	—		—		—		—		(1,492)		(1,492)

Balance at June 30, 2019	$	3,606	$	5,290,382	$	(28,717)	$	(624,674)	$	61,524	$	4,702,121


Balance at December 31, 2018	$	4,662,877	$	50,585	$	(4,676)	$	4,708,786	$	4,457	$	4,713,243
Net income	115,604		1,003		—		116,607		(16)		116,591
Other comprehensive loss	—		—		(24,041)		(24,041)		—		(24,041)
Capital contribution from the General Partner	42,128				—		42,128		—		42,128
Stock-based compensation plan activity	3,255		6,675		—		9,930		—		9,930
Contributions from noncontrolling interests	—		—		—		—		312		312




Distributions to common unitholders ($0.43 per Common Unit)	(154,550)		(1,353)		—		(155,903)		—		(155,903)

Distributions to noncontrolling interests	—		—		—		—		(139)		(139)

Balance at June 30, 2019	$	4,669,314	$	56,910	$	(28,717)	$	4,697,507	$	4,614	$	4,702,121


	Held-for-Sale at June 30, 2020	Sold Year-to-Date in 2020	Sold in 2019	Total






Properties sold or classified as held-for-sale	—	1	28	29