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The Dukes of Indiana.

Duke Associates is the largest commercial developer in Indianapolis--and Cincinnati.

A lot of companies grow, but rarely are the results as obvious and hard to miss. If not for the success of Duke Associates, the Indianapolis landscape would be drastically different. So would that of Cincinnati.

Subtract the Indianapolis developer's mark from the real-estate scene and you'd lose among other things a distinctive 28-story office building from the downtown Indy skyline, plus a couple of smaller high-rises. Downtown Cincinnati would lose nearly 100 floors of newer office space along with some renovated space. If not for Duke, what has become one of the country's largest business parks might be a vacant piece of Indianapolis land, and acres of prime business and industrial land all around the Midwest would be vacant as well. And one of the Hoosier capital's classiest places to shop and do business would not exist.

Not a bad mark to make in just two decades. It was 20 years ago this month that the fledgling company agreed to take over development of an industrial and business park known as Park 100 on the northwest side of Indianapolis. Since then, Duke has exploded into a company with $225 million in sales and nearly 30 million square feet of property; it's the state's biggest player in general commercial development (the only bigger name is Melvin Simon & Associates, which focuses just on the retail sector). Duke is the biggest developer in both Indianapolis and Cincinnati, and has set its sights on several other Midwestern cities.

It all started when a few people working on the sidelines of real estate wanted to move a little closer to the action. "I was a lawyer in real-estate finance," says John Wynne, a Duke partner. "Phil Duke was an accountant who worked for a client of mine; he was experienced in industrial development." John Rosebrough was in marketing and sales. "We got together and founded what's now Duke Associates."

Park 100 was the small company's first project. The original plans envisioned a little more than 300 acres of industrial development at the site, but as Duke got to work putting up industrial buildings on the land it had, it also acquired more acreage nearby.

Today, at 1,630 acres--with about 9.5 million square feet under roof--Duke's first project remains one of its grandest successes. It's now one of the top 10 business parks in the country. And it remains a source of pride for Wynne and his current partners. "It's nice for the community because it's mostly distribution centers, it's all clean and doesn't put a big burden on the infrastructure," says Thomas Hefner, a partner and the company's chief operating officer. "It also gives a large tax base."

Duke Associates was only a few years old when its leaders decided they could take on more than just the Hoosier capital. They looked toward Cincinnati in 1976, and began developing the Park 50 TechneCenter there. Today, Park 50 includes more than 900,000 square feet of office and office/research facilities, and there are plans to expand it by about a third.

By 1978, Duke was ready to undertake what Wynne says is probably the company's most spectacular-looking endeavor, Keystone at the Crossing on the northeast side of Indianapolis. The property at Keystone Avenue and 86th Street once had been a farm, and when Duke acquired it, there was an unusual retail development called the Bazaar on the site. As its name implies, the multilevel, 110,000-square-foot Bazaar included a variety of small retailers scattered about with no walls in between. "It was something that we never could make work," recalls Wynne, "so we tore it down."

Under Duke's guidance, Keystone at the Crossing moved from the Bazaar to the sublime. Today, there are a number of high-rise buildings on the site, enclosing 1.5 million square feet of office space. There is a half-million-square-foot Fashion Mall (which is due to expand in the near future). There are nearly a dozen restaurants scattered around the site. And there's a Radisson Hotel that offers more than 500 rooms.

Along with Duke's growth came additions and changes at the management level. As Keystone at the Crossing was taking shape, Duke was taking on new partners. Hefner entered the picture at that point, as did fellow partners Daniel Staton and Gene Zink. In 1985, the company raised capital by forming Duke Realty Investments Inc., a publicly owned real-estate investment trust that has in its portfolio a number of properties, most of them developed by Duke. Then in 1986, Hefner, Staton, Wynne and Zink bought out Phil Duke's and John Rosebrough's shares of the business. Gary Burk, Michael Coletta, David Mennel later joined as partners to fill out the current roster of seven.

Real estate's glorious '80s smiled upon Duke Associates, and the company probably has done as much business in the past five years as in its first 15, Hefner says. Office and retail were the hottest things to develop through the '80s, and Duke found many opportunities. Office became the company's major emphasis in Cincinnati; most of the company's 8.5 million square feet of space in that area is office space. Though Duke has several properties in downtown Cincinnati, the company was one of the first to brave the development terrain outside the downtown area. Its boldness has made it that city's biggest developer.

Duke, of course, also has the largest share of the Indianapolis development market. In addition to Park 100 and Keystone at the Crossing, the company has dotted the map with other business parks and retail centers, most of them on the north side. The company has three downtown Indianapolis buildings, and more recently has eyed the south side, where it is developing South Park Business Center and Plaza, a Greenwood project that will include about a million square feet of office, showroom, hotel and retail space. In all, Duke now has about 14 million square feet of property in the Indianapolis area.

But the Dukes of Indiana still aren't content. In the past few years they've again expanded their gaze, and now have two projects going in both Detroit and Nashville, Tenn. Duke has three developments in Columbus, Ohio, along with an industrial center in Decatur, Ill., and some retail centers in central Illinois and St. Louis. But even that's not enough to keep Duke completely busy.

The company and its construction-management affiliate also have been benefiting from the build-to-suit trend of recent years; among projects for other companies are the new Indiana Insurance Co. headquarters in Indianapolis and the enormous Thomson Consumer Electronics distribution center in Bloomington. Not that build-to-suit projects are anything new for Duke. "In the last 10 years we've done almost 50 build-to-suits," Hefner says.

Part of Duke's philosophy is one-stop service, Hefner says. In an industry that has been less than stable of late, Duke wants to deliver as many client services as possible itself. Tenants may call upon Duke engineers, interior designers, space planners, heating and air specialists, construction workers and the like. "We control our own destiny," Hefner says. "We rely on fewer outside people to keep our clients happy. We try to come to the table with more flexibility than our clients have."

That kind of attitude along with a history of deliberative actions have helped Duke survive the tough times in real estate. The company has been bold and adventurous in many of its endeavors, but it hasn't been reckless and it has been prepared to face the risks that go along with charting new territory. The companies that haven't made it are the ones that underestimated or disregarded risks. "We're basically a group of Boy Scouts in an industry that doesn't always attract Boy Scouts," Hefner says.

Duke also has been careful to keep its own house in order as the times have gotten tough. "We've got to keep our overhead down," Hefner explains. "When I came here we had two airplanes, but we're never going to anymore. Clients want to see a quality bolt of cloth, but not any opulence. Opulence is out today, and flashy and slick are out. And that's putting us back in vogue."

Of course, Duke has made its share of mistakes, Hefner admits, but has learned from them. It had a less-than-successful venture into residential real estate, an area of development the company now plans to avoid. And Wynne recalls one of the earliest projects at Park 100, when the company decided to save money by building on dirt instead of sand. Then it rained, and the dirt had to be replaced by sand. The company learned an important lesson that while opulence is optional, quality is not.

The concern for quality spreads into the personal lives of Wynne and Hefner as well. Both are avid collectors of quality wine. They also keep fit and busy with sports in their spare time. Both enjoy tennis, and Hefner also plays paddle tennis. Skiing, hunting and golf are other pastimes he relishes. Wynne likes to travel, and enjoys bicycling (he even had a bicycle adorned with Duke's green-leaf logo). The other partners report affinities for tennis, baseball and skiing, and even model airplane and old car collecting.

Keeping fit seems to be a way of life for Duke's partners, and applying that philosophy to their business ventures is paying off handsomely. Duke has remained fit during a time of real estate turmoil, and its health will help it take advantage of the economic recovery that most economists say is under way.

"My experience," says Hefner, "is that in business you're either growing or shrinking. Manufacturing is going to come back in a big way here, and our company is positioned to really take advantage of some Midwestern opportunities. We're on the threshold of some well-founded, real growth."
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Title Annotation:Duke Associates Inc.
Author:Kaelble, Steve
Publication:Indiana Business Magazine
Article Type:Company Profile
Date:Jun 1, 1992
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