Savills, the international real estate advisor, has arranged a joint venture capitalization on behalf of Duke Realty Corporation (NYSE: DRE) for a new, 460,000 sq ft (42,734 sq m) Baylor Cancer Centre that will be developed by Duke on the campus of Baylor University Medical Centre in Dallas, Texas, Baylor Health Care Systems' flagship campus. The transaction is valued at $154 million.

Savills represented Duke in securing Northwestern Mutual as Duke's partner in the 100% equity transaction. Northwestern will hold a majority interest in the joint venture. BremnerDuke, a wholly owned division of Duke, will serve as developer for the project.

"Savills's depth of experience in the capital markets - together with Duke's and Baylor's reputations as 'best in class' - were critical factors in arranging one of the largest private-equity placements for medical real estate in a distressed capital market," say Jeffrey H. Cooper, executive managing director of Savills and leader of the company's healthcare real estate practice. "This transaction - which involved a capital source with little previous exposure to this asset class - is evidence that the capital markets are favouring the medical office sector, with its positive demand factors and certainty of cash flow, even in a recessionary environment. Yet while access to capital remains viable for this type of investment, arranging capitalization on this scale during this market cycle is complex, and requires both creativity and the highest-quality real estate."

The centre's two primary tenants will be Baylor University Medical Centre and US Oncology, the nation's premier oncology services company. The ten-story outpatient cancer facility and medical office building will be located at the intersection of Hall and Worth streets.

Construction is scheduled to begin during the second quarter of 2009.  Baylor Cancer Centre will be one of America's largest outpatient cancer centres and will include cancer treatment services, oncology research labs, physician offices, conference facilities, underground parking for 250 cars, and a 50-space surface parking lot. Anticipated for completion in 2011, the property will seek LEED Silver certification.

Savills New York based healthcare team has completed approximately $2.5 billion in healthcare real estate capitalizations. As specialists in medical real estate and senior housing, the Savills healthcare team provides acquisition and joint venture advisory services, as well as strategic recapitalization counsel. The practice also arranges development and acquisition financing and equity for healthcare real estate clients, helps originate institutional programmatic investment programs, and manages acquisition and disposition of assets and portfolios. The Savills team focuses on medical office buildings, outpatient facilities, ambulatory surgery centres, specialty hospitals, and all types of senior housing.

The team has assisted clients on complex and large-scale transactions throughout the United States. Noteworthy transactions include the recapitalization of a 1.7 million sq ft medical office portfolio that included 24 assets, the sale of a majority interest in a new specialty hospital in St. Louis, the sale of a 1.2million sq ft medical office portfolio comprising 30 buildings, and the complex unwinding of the joint venture ownership of a four million sq ft medical office portfolio that included 55 properties.

Duke Realty Corporation specializes in the ownership, management and development of office, industrial, and healthcare real estate.  The company owns, maintains an interest in or has under development approximately 135 million rentable square feet in 21 U.S. cities. Duke Realty Corporation is publicly traded on the NYSE under the symbol DRE and is listed on the S&P MidCap 400 Index.

Baylor University Medical Centre at Dallas is a nationally recognized, not-for-profit hospital that cares for more than 300,000 people each year and has more than 1,000 licensed beds.

Contact Information
Jeffrey H. Cooper, Savills New York
+1 (1) 212 328 3957

Victoria Cambridge, Savills Press Office
+44 (0) 20 7409 8940