Wall Street pushed the Indianapolis-headquartered Duke Realty into the Phoenix market. Amazon.com has helped it weather an economic storm.
And Kevin Rogus is a grateful senior vice president.
Rogus came to the Valley from a main Duke Realty office in Cincinnati to set up shop in January 2007. The mission was to create a Western hub. Soon, offices were established in Seattle and Southern California.
“We came out here because, for one thing, Wall Street wanted us to,” Rogus says. “The fact that we were heavily invested in the Midwest and East didn’t mean much to Wall Street. It was time to expand into a growth market.” The $6-billion company, which started in 1972, went public in 1993.
By the end of 2007, the Phoenix office had partnered with Amazon.com in a product fulfillment center at 67th Avenue and Buckeye Road on the west side of the metro area.
Duke Realty likes to develop and own industrial, office and medical properties, but Rogus says, “Our first love is industrial.”
In its first Valley deal, Duke acquired 600,000 sq ft from the Alter Group at the Buckeye Logistics Center, where Amazon.com leased space by the end of 2007.
The company also has a total of 715,000 sq ft of space at Goodyear Crossing, where it sold land to Macy’s for an online fulfillment center. And, Amazon.com leased space there last year, as well.
“We are fortunate and pleased to have that relationship,” Rogus says of Amazon.com. It has nationally taken the No. 2 spot in Duke’s portfolio, with U.S. General Service Administration at No. 1.
Duke Realty also has partnered with Chinese solar-tech manufacturer Suntech Power Holdings, which is expected to move into Goodyear Crossing this summer.
“We worked with the Greater Phoenix Economic Council, who made the introduction between us, and the city of Goodyear was instrumental in bringing Suntech to our building,” Rogus says.
Duke acquired a fully leased, 250,000-sq-ft property – also at 67th Avenue and Buckeye Road – several months ago. The property, informally called Estrella Buckeye, brings the company’s Phoenix holdings to 1.9 million sq ft.
Through all this, Duke, like other developers, has had to survive a bad economy. For its part, the Phoenix office had to close the Seattle and Southern California offices.
“All of our peers in this industry were building 36 months ago as if there was no tomorrow – as an industry we got way too far out of our skis,” Rogus says. “We’ve had to scale back our expectations and have fared better than some.”
Richard Hubbard, CEO and president of Valley Partnership, a Maricopa County organization that promotes responsible commercial real estate development, says that he expects great things from Duke Realty. “When the market rebounds, you’ll see Duke become a major Valley developer,” he says. “We aggressively recruited them. They’re a traditional, established company, and I think the decision to come out here and enter this market showed an entrepreneurship and willingness to take a risk.”
Rogus, who also thinks of the Phoenix office in entrepreneurial terms, says Duke Realty is 96% leased in the Valley, and 90% nationally.
“Good fortune combined with hard work, and good things happen sometimes,” he says, referring to a client like Amazon.com and his six-member staff, which has a combine 100 years with Duke Realty.
Visit the firms’s web site at www.dukerealty.com