PROSPECTUS SUPPLEMENT
- ---------------------
(TO PROSPECTUS DATED APRIL 20, 1998)
7,109,004 SHARES
(LOGO)
DUKE-WEEKS REALTY CORPORATION
COMMON STOCK
We are offering and selling 7,109,004 shares of common stock
with this prospectus supplement to Stichting Pensioenfonds ABP.
We are selling these shares at a price of $21.10 per share, for
total proceeds of $149,999,984.40. We will receive the proceeds
from the sale of the common stock. Our common stock is listed on
the New York Stock Exchange under the symbol DRE. The last
reported sale price for the common stock on September 3, 1999 was
$21-7/8 per share.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or determined if this prospectus supplement or the
attached prospectus is truthful or complete. Any representation
to the contrary is a criminal offense.
The date of this prospectus supplement is September 9, 1999.
<PAGE>
TABLE OF CONTENTS
PAGE
PROSPECTUS SUPPLEMENT
The Company S-3
Recent Developments S-4
Use of Proceeds S-4
Price Range of Common Stock and Dividend History S-4
Certain Federal Income Tax Considerations S-6
Plan of Distribution S-7
Legal Matters S-7
PROSPECTUS
Available Information 2
Incorporation of Certain Documents by Reference 2
The Company and the Operating Partnership 3
Use of Proceeds 3
Ratios of Earnings to Fixed Charges 4
Description of Debt Securities 4
Description of Preferred Stock 14
Description of Depositary Shares 20
Description of Common Stock 24
Federal Income Tax Considerations 26
Plan of Distribution 33
Legal Opinions 34
Experts 34
FORWARD-LOOKING STATEMENTS
This prospectus supplement and the accompanying prospectus
includes and incorporates by reference forward-looking
statements. We have based these forward-looking statements on
our current expectations and projections about future events.
These forward-looking statements are subject to risks,
uncertainties and assumptions about us, including, among other
things:
// Our anticipated future acquisition
and development strategies;
// Tax risks, including our continued
qualification as a real estate investment trust;
// The limited geographic diversification of our real estate
portfolio; and
// General real estate investment risks, including
local market conditions and rental rates, competition
for tenants, tenant defaults, possible environmental
liabilities and financing risks.
We undertake no obligation to publicly update or revise any
forward-looking statements, whether as a result of new
information, future events or otherwise. In light of these
risks, uncertainties and assumptions, the forward-looking events
discussed in this prospectus supplement and discussed in or
incorporated by reference in the accompanying prospectus may not
occur.
You should rely only on the information contained in this
prospectus supplement and the accompanying prospectus. We have
not, and the underwriter has not, authorized any other person to
provide you with different information. If anyone provides you
with different or inconsistent information, you should not rely
on it. We are not, and the underwriter is not, making an offer
to sell these securities in any jurisdiction where the offer or
sale is not permitted.
S-2
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THE FOLLOWING INFORMATION MAY NOT CONTAIN ALL THE INFORMATION
THAT MAY BE IMPORTANT TO YOU. YOU SHOULD READ THE ENTIRE
PROSPECTUS SUPPLEMENT AND ACCOMPANYING PROSPECTUS, AS WELL AS THE
DOCUMENTS INCORPORATED BY REFERENCE IN THE PROSPECTUS BEFORE
MAKING AN INVESTMENT DECISION. UNLESS INDICATED OTHERWISE, THE
INFORMATION CONTAINED IN THIS PROSPECTUS SUPPLEMENT IS PRESENTED
AS OF JUNE 30, 1999. ALL REFERENCES TO "DUKE" IN THIS PROSPECTUS
SUPPLEMENT MEAN DUKE-WEEKS REALTY CORPORATION AND ALL ENTITIES
OWNED OR CONTROLLED BY DUKE-WEEKS REALTY CORPORATION, EXCEPT
WHERE IT IS MADE CLEAR THAT THE TERM MEANS ONLY DUKE-WEEKS REALTY
CORPORATION.
THE COMPANY
We are a self-administered and self-managed real estate
investment trust (a "REIT") that began operations through a
related entity in 1972. On July 2, 1999, Weeks Corporation merged
with us. Immediately following the merger, we:
// Owned 891 industrial, office and retail properties
(including properties under development), consisting of
approximately 96 million square feet located in 13 states; and
// Owned or controlled approximately 4,600 acres of land
with an estimated future development potential of
approximately 63 million square feet of industrial, office
and retail properties.
We provide the following services for our properties and for
certain properties owned by third parties:
// leasing
// management
// construction
// development
// other tenant-related services
We are one of the largest real estate companies in the United
States with a concentration of operations in the Midwest and the
Southeast. We believe that the Midwest and the Southeast
complement each other and together offer relatively strong and
stable economies compared to other regions of the United States
and provide significant growth potential due to their location,
established manufacturing base, skilled work force and moderate
labor costs.
We directly or indirectly hold all of our interests in our
properties and land and we conduct all of the operations through
Duke-Weeks Realty Limited Partnership. Holders of partnership
units in Duke-Weeks Realty Limited Partnership (other than us)
may exchange them for our common stock on a one for one basis.
When units are exchanged for common stock our percentage interest
in Duke-Weeks Realty Limited Partnership increases. We control
the limited partnership as its sole general partner and owner,
immediately following the merger with Weeks, of approximately 86%
of the outstanding units.
Our properties (including the Weeks properties we acquired in
merger) have a diverse and stable base of more than 4,000
tenants. Many of the tenants are Fortune 500 companies and engage
in a wide variety of businesses, including manufacturing,
retailing, wholesale trade, distribution, and professional
services. No single tenant accounts for more than 2% of our
total gross effective rent (computed using the average annual
rental property revenue over the terms of the respective leases
including landlord operating expense allowances but excluding
additional rent due as operating expense reimbursements).
S-3
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RECENT DEVELOPMENTS
MERGER
On July 2, 1999, Weeks Corporation merged with and into our
company. Immediately prior to the merger, Weeks owned
361 properties totaling approximately 30.9 million square feet,
including 18 properties that were under development, in lease-up
or under contract to acquire, and owned or controlled (through
agreements to acquire, options and marketing and development
agreements) approximately 1,800 net usable acres of undeveloped
land located primarily in existing business parks with zoning and
infrastructure in place. In the merger,
// each outstanding share of common stock of Weeks was
converted into the right to receive 1.38 shares of our
common stock;
// each outstanding share of Weeks preferred stock was
converted into the right to receive depositary shares
representing our preferred stock having terms identical to
the terms of the corresponding series of Weeks preferred
stock;
// Weeks' principal operating subsidiary, Weeks Realty,
L.P. was merged with and into Duke Realty Limited
Partnership, whose name was changed to Duke-Weeks Realty
Limited Partnership.
As a result of the merger, all references in the accompanying
prospectus to Duke Realty Investments, Inc. and Duke Realty
Limited Partnership should be regarded as references to Duke-
Weeks Realty Corporation and Duke-Weeks Realty Limited
Partnership, respectively.
DIVIDENDS
On July 28, 1999, our board of directors raised our regular
quarterly common dividend from $.34 per share to $.39 per share,
an increase of 14.7%. This dividend was payable on August 31,
1999 to common shareholders of record on August 16, 1999. This
dividend equals $1.56 on an annualized basis.
FINANCING
Effective July 2, 1999, the interest rate on our existing $450
million unsecured line of credit was decreased to a rate equal to
the London Interbank Offered Rate (LIBOR) plus .70%. This line
of credit matures in April 2001. Also effective July 2, 1999, we
obtained a $300 million unsecured line of credit which bears
interest at LIBOR plus .90%. This line of credit matures
December 2001.
USE OF PROCEEDS
We expect to receive net proceeds from the sale of the common
stock of approximately $150 million, after deducting offering
expenses. We presently intend to use the net proceeds to reduce
the outstanding balance on our unsecured lines of credit, which
are used to fund development and acquisition of rental
properties. Our unsecured lines of credit had an aggregate of
$315 million outstanding as of September 7, 1999, bearing
interest at LIBOR plus .60% to .80%, and mature in April 2001 and
December 2001, respectively.
S-4
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PRICE RANGE OF COMMON STOCK AND DIVIDEND HISTORY
Our common stock is listed on the New York Stock Exchange under
the symbol DRE. The following table sets forth the high and low
sale prices of the common stock for certain periods and the
dividend paid per share during those periods. All share price
and dividend information has been adjusted to reflect the effect
of the two-for-one split of our common stock on August 25, 1997
to common shareholders of record on August 18, 1997.
<TABLE>
<CAPTION>
CLOSING PRICES
PER SHARE
-------------------- DIVIDENDS
QUARTERLY PERIOD HIGH LOW PER SHARE
- ---------------- -------- -------- ----------
<S> <C> <C> <C>
1997
First Quarter 21.44 19.00 0.255
Second Quarter 20.88 17.13 0.255
Third Quarter 23.63 19.81 0.295
Fourth Quarter 25.00 21.38 0.300
1998
First Quarter 25.00 22.31 0.300
Second Quarter 25.00 21.81 0.300
Third Quarter 24.31 19.50 0.340
Fourth Quarter 24.38 21.50 0.340
1999
First Quarter 23.69 20.50 0.340
Second Quarter 24.25 20.13 0.340
Third Quarter
(through September 3, 1999) 22.88 21.44 0.390
</TABLE>
The last reported sale price of our common stock on the New
York Stock Exchange on September 3, 1999 was $21-7/8 per share.
As of September 3, 1999, we had 10,254 registered holders of
common stock.
Since we were organized in 1986, we have paid regular and
uninterrupted dividends. We intend to continue to declare
quarterly dividends on our common stock. However, we cannot be
sure about the amounts of future dividends because they depend on
our cash flow from operations, earnings, financial condition,
capital requirements and other factors that our board of
directors believes are important. We have determined that none of
the per share distribution for 1998 represented return of capital
to our shareholders for income tax purposes. We cannot promise
that this will not change in future years.
S-5
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CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
For a discussion of material federal income tax consequences
applicable to distributions to shareholders and our election to
be taxed as a REIT, see "Federal Income Tax Considerations" in
the accompanying prospectus.
IRS RESTRUCTURING ACT
You should be aware that, as discussed in the accompanying
prospectus, the Taxpayer Relief Act of 1997 (the "1997 Act")
altered the taxation of capital gain income. The recently-
enacted IRS Restructuring Act reduced the holding periods
established by the 1997 Act. Under the 1997 Act, as revised by
the IRS Restructuring Act, for gains realized after December 31,
1997, and subject to certain exceptions:
// the maximum rate of tax on net capital gains of
individuals, trusts and estates from the sale or exchange of
assets held for more than 12 months has been reduced to 20%;
// the maximum rate of tax on net capital gains of
individuals, trusts and estates from the sale or exchange of
assets is reduced to 18% for assets acquired after
December 31, 2000 and held for more than five years;
// for taxpayers who would be subject to a maximum tax
rate of 15%, the rate on net capital gains is reduced to
10%;
// for taxpayers who would be subject to a maximum tax
rate of 15%, effective for taxable years commencing after
December 31, 2000, the rate is reduced to 8% for assets held
for more than five years;
// the maximum rate for net capital gains attributable to
the sale of depreciable real property held for more than 12
months is 25% to the extent of the deductions for
depreciation with respect to such property; and
// long-term capital gain we allocate to a shareholder
will be subject to the 25% rate to the extent that the gain
does not exceed depreciation on real property we sell.
THE 1997 ACT PROVIDES THE INTERNAL REVENUE SERVICE WITH AUTHORITY
TO ISSUE REGULATIONS THAT COULD, AMONG OTHER THINGS, APPLY THESE
RATES TO SALES OF CAPITAL ASSETS BY "PASS THROUGH ENTITIES"
(INCLUDING REITS) AND TO SALES OF INTERESTS IN "PASS THROUGH
ENTITIES." THE TAXATION OF CAPITAL GAINS OF CORPORATIONS WAS NOT
CHANGED BY THE 1997 ACT OR THE IRS RESTRUCTURING ACT.
S-6
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PLAN OF DISTRIBUTION
We have agreed to sell to Stichting Pensioenfonds ABP, and it
has agreed to purchase from us, 7,109,004 shares of our common
stock.
We expect to incur expenses of approximately $30,000 in
connection with this offering. These expenses are estimated to
include legal fees of $4,000, New York Stock Exchange listing
fees of $24,500 and miscellaneous expenses of $1,500.
Stichting Pensioenfonds ABP has agreed that for a period of 60
days from the date of closing of the purchase pursuant to this
prospectus supplement it will not, without prior and written
consent of Duke, offer, sell or otherwise dispose of any of the
shares of common stock purchased pursuant to this prospectus
supplement.
We have agreed that for a period of 30 days from the date of
closing of the purchase pursuant to this prospectus supplement we
will not, subject to certain exceptions, sell our common stock
for a price net of commissions and discounts of less than $21.10.
LEGAL MATTERS
In addition to the legal opinions referred to under "Legal
Opinions" in the accompanying prospectus, the description of
Federal income tax matters contained in this prospectus
supplement entitled "Certain Federal Income Tax Considerations"
is based on the opinion of Bose McKinney & Evans LLP.
S-7
