UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

SCHEDULE 14A
(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No.     )

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Duke Realty Corporation

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600 East 96th Street

Suite 100

Indianapolis, Indiana 46240

(317) 808-6000

March 16, 2005

Dear Shareholder:

      The Board of Directors and officers of Duke Realty Corporation join me in extending to you a cordial invitation to attend our annual meeting of shareholders. This meeting will be held on Wednesday, April 27, 2005, at 3:00 p.m. local time, at the Marriott Indianapolis North Hotel, 3645 River Crossing Parkway, Indianapolis, Indiana 46240. To reserve your seat at the annual meeting, please call 800-875-3366 or send an e-mail to ir@dukerealty.com. As in past years, we believe that both the shareholders and management of Duke Realty Corporation can gain much through participation at this meeting. Our objective is to make it as informative and interesting as possible.

      The formal notice of this annual meeting and the proxy statement appear on the following pages. We hope that you will make plans to attend this meeting. Whether or not you attend, we urge you to vote by mail, by telephone or on the Internet in order to ensure that we record your votes on the business matters presented at the annual meeting.

      We look forward to seeing you on April 27th.

TABLE OF CONTENTS

600 East 96th Street

Suite 100

Indianapolis, Indiana 46240

(317) 808-6000

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

To be held April 27, 2005

      Notice is hereby given that the Annual Meeting of Shareholders (the “Annual Meeting”) of Duke Realty Corporation (the “Company”) will be held at the Marriott Indianapolis North Hotel, 3645 River Crossing Parkway, Indianapolis, Indiana 46240, on Wednesday, April 27, 2005, at 3:00 p.m. local time. At this meeting, the shareholders will be asked to act on the following matters:

      Only shareholders of record at the close of business on Monday, February  28, 2005 are entitled to notice of and to vote at the Annual Meeting or at any adjournments or postponements thereof. At least a majority of the outstanding shares of common stock of the Company present in person or by proxy is required for a quorum.

YOUR VOTE IS IMPORTANT!

      Submitting your proxy does not affect your right to vote in person if you attend the Annual Meeting. Instead, it benefits the Company by reducing the expenses of additional proxy solicitation. Therefore, you are urged to submit your proxy as soon as possible, regardless of whether or not you expect to attend the Annual Meeting. You may revoke your proxy at any time before its exercise by (i) delivering written notice of revocation to the Company’s Secretary, Howard L. Feinsand, at the above address, (ii) submitting to the Company a duly executed proxy card bearing a later date, (iii) voting via the Internet or by telephone at a later date, or (iv) appearing at the Annual Meeting and voting in person; provided, however, that no such revocation under clause (i) or (ii) shall be effective until written notice of revocation or a later dated proxy card is received by the Company’s Secretary at or before the Annual Meeting, and no such revocation under clause (iii) shall be effective unless received on or before 11:59 p.m., Indianapolis local time, on April 26, 2005.

      When you submit your proxy, you authorize Dennis D. Oklak or Howard L. Feinsand or either one of them, each with full power of substitution, to vote your shares at the Annual Meeting in accordance with your

instructions or, if no instructions are given, to vote for the election of the director nominees, for the approval of the 2005 Long-Term Incentive Plan, for the amendments to the Company’s previously existing long-term incentive plans, for the appointment of the independent auditors for 2005, and to vote on any adjournments or postponements of the Annual Meeting. The Company’s Annual Report for the year ended December 31, 2004 is also enclosed.

Indianapolis, Indiana

March 16, 2005

600 East 96th Street

Suite 100

Indianapolis, Indiana 46240

(317) 808-6000

QUESTIONS AND ANSWERS

Why did I receive this proxy?

      The Board of Directors of Duke Realty Corporation (the “Company”) is soliciting proxies to be voted at the Annual Meeting. The Annual Meeting will be held Wednesday, April 27, 2005, at 3:00 p.m. local time at the Marriott Indianapolis North Hotel, 3645 River Crossing Parkway, Indianapolis, Indiana 46240. For driving directions to the Annual Meeting, please call 800-875-3366. This proxy statement summarizes the information you need to know to vote by proxy or in person at the Annual Meeting. You do not need to attend the Annual Meeting in person in order to vote.

Who is entitled to vote?

      All shareholders of record as of the close of business on Monday, February 28, 2005 (the “Record Date”) are entitled to vote at the Annual Meeting.

What is the quorum for the Meeting?

      In order for any business to be conducted, the holders of a majority of the shares of common stock entitled to vote at the Annual Meeting must be present, either in person or represented by proxy. For the purpose of determining the presence of a quorum, abstentions and broker non-votes (which occur when shares held by brokers or nominees for beneficial owners are voted on some matters but not on others) will be counted as present. As of the Record Date, 142,924,368 shares of common stock were issued and outstanding.

How many votes do I have?

      Each share of common stock outstanding on the Record Date is entitled to one vote on each item submitted for consideration.

How do I vote?

How do I vote my shares that are held by my broker?

      If you have shares held by a broker, you may instruct your broker to vote your shares by following the instructions that the broker provides to you. Most brokers offer voting by mail, telephone and on the Internet.

What am I voting on?

      You will be voting on the following proposals:

Will there be any other items of business on the agenda?

      The Board of Directors is not presently aware of any other items of business to be presented for a vote at the Annual Meeting other than the proposals noted above. Nonetheless, in case there is an unforeseen need, your proxy gives discretionary authority to Dennis D. Oklak and Howard L. Feinsand with respect to any other matters that might be brought before the meeting. Those persons intend to vote that proxy in accordance with their best judgment.

How many votes are required to act on the proposals?

      The election of each director requires the affirmative vote of at least a majority of the common stock present in person or represented by proxy and entitled to vote for the election of directors. The holder of each outstanding share of common stock is entitled to vote for as many persons as there are directors to be elected. An abstention, broker non-vote, or direction to withhold authority will result in a nominee receiving fewer votes, but will not be treated as a vote against the nominee.

      The approval of the 2005 Long-Term Incentive Plan, approval of the amendments to the Company’s previously existing long-term incentive plans, and approval of the reappointment of KPMG LLP as the Company’s independent public accountants for 2005 requires the affirmative vote of the holders of a majority of the common stock present in person or represented by proxy and entitled to vote at the Annual Meeting. Abstentions will be counted toward the tabulation of votes and will have the same effect as negative votes. Broker non-votes are counted towards a quorum, but are not counted for any purpose in determining whether these matters have been approved.

      If the shareholder proposal is properly presented at the Annual Meeting, approval of the shareholder proposal will require the affirmative vote of the holders of a majority of the common stock present in person or represented by proxy and entitled to vote. Abstentions are counted towards the tabulation of votes and will have the same effect as negative votes. Broker non-votes are counted towards a quorum, but are not counted for any purpose in determining whether this matter has been approved.

What happens if I return my proxy card without voting on all proposals?

      When you return a properly executed proxy card, we will vote the shares that the proxy card represents in accordance with your directions. If you return the signed proxy card with no direction on a proposal, we will vote your proxy in favor of (FOR) Proposals One, Two, Three, and Four and against (AGAINST) Proposal Five.

Will anyone contact me regarding this vote?

      It is contemplated that brokerage houses will forward the proxy materials to shareholders at the request of the Company. In addition to the solicitation of proxies by use of the mails, officers and regular employees of the Company may solicit proxies by mail, telephone, facsimile, e-mail, or personal interviews without additional compensation. The Company reserves the right to engage solicitors and pay compensation to them for the solicitation of proxies. The Altman Group has been retained to assist us in the solicitation of proxies at a fee estimated not to exceed $4,000.

Who has paid for this proxy solicitation?

      The Company will bear the cost of preparing, printing, assembling and mailing the proxy, proxy statement and other materials that may be sent to shareholders in connection with this solicitation. The Company may also reimburse brokerage houses and other custodians, nominees and fiduciaries for their expenses incurred in forwarding solicitation materials to the beneficial owners of shares held of record by such persons.

How do I submit a proposal for the annual meeting of shareholders in 2006?

      If a shareholder wishes to have a proposal considered for inclusion in the proxy statement for the 2006 annual meeting, he or she must submit the proposal in writing to the Company (Attention: Howard L. Feinsand, Secretary) so that the Company receives the proposal by November 18, 2005. Shareholders are also advised to review the Company’s by-laws, which contain additional advance notice requirements, including requirements with respect to advance notice of shareholder proposals and director nominations.

      The Board of Directors of the Company will review any shareholder proposals that are timely submitted and will determine whether such proposals meet the criteria for inclusion in the proxy solicitation materials or for consideration at the 2006 annual meeting. In addition, the persons named in the proxies retain the discretion to vote proxies on matters of which the Company is not properly notified at its principal executive offices on or before 60 days prior to the 2006 annual meeting, and also retain such authority under certain other circumstances.

What does it mean if I receive more than one proxy card?

      It means that you have multiple accounts at the transfer agent or with stockbrokers. Please complete and return vote all proxy cards to ensure that all your shares are voted.

When was this proxy statement mailed?

      This proxy statement, the enclosed proxy card and the Annual Report were mailed to shareholders beginning on or about March 16, 2005.

How do I receive future proxy materials electronically?

      If you are a shareholder of record, you may, if you wish, receive future proxy statements and annual reports online. To do so, please log on to www.voteproxy.com and click on “Enroll to receive mailings via e-mail.” You will need to refer to the company number and the account number on the proxy card. If you later wish to receive the statements and reports by regular mail, this e-mail enrollment may be cancelled.

Can I find additional information on the Company’s website?

      Yes. The Company’s website is located at www.dukerealty.com. Although the information contained on the Company’s website is not part of this proxy statement, you can view additional information on the website, such as the Company’s code of conduct, corporate governance guidelines, charters of board committees and reports that the Company files and furnishes with the Securities and Exchange Commission (the “SEC”). A copy of the Company’s code of conduct, corporate governance guidelines and charters of board committees may be obtained by written request addressed to Duke Realty Corporation, 600 East 96th Street, Suite 100, Indianapolis, Indiana 46240, Attention: Investor Relations.

PROPOSAL ONE: ELECTION OF DIRECTORS

      The Company’s Board of Directors currently consists of fifteen members. The terms of office for each of the Company’s directors will expire at the Annual Meeting. Based on the recommendation of the Corporate Governance Committee, the Board of Directors has approved a reduction in the size of the Board from fifteen to thirteen effective as of the Annual Meeting and, accordingly, has nominated thirteen of the current directors for re-election to serve for one-year terms that will expire at the Company’s 2006 annual meeting or until their successors have been elected and qualified. The Board of Directors has also designated Mr. Dennis D. Oklak to serve as Chairman of the Board of Directors effective as of the date of the Annual Meeting.

      No security holder that held a beneficial ownership interest in the Company’s common stock of 5% or more for at least one year recommended any candidates to serve on the Board of Directors.

      The Company’s Board of Directors has no reason to believe that any of the nominees for director will not be available for election. However, if a nominee is unavailable for election, the proxy holders may vote for another nominee proposed by the Board of Directors. If the Board of Directors does not propose another director nominee prior to or at the Annual Meeting, the Board of Directors, by resolution, may reduce the number of directors to be elected at the Annual Meeting. Each nominee has agreed to be named in this proxy statement and to serve if elected.

      The election of each director requires the affirmative vote of the holders of at least a majority of the common stock present in person or represented by proxy and entitled to vote for the election of directors. The holder of each outstanding share of common stock is entitled to vote for as many persons as there are directors to be elected. An abstention, broker non-vote, or direction to withhold authority will result in a nominee receiving fewer votes, but will not be treated as a vote against the nominee.

      The Board of Directors unanimously recommends a vote “FOR” the election of all of the nominees named below for director.

Nominees for Election as Directors

Barrington H. Branch, Age 64

Mr. Branch has served as President of The Branch-Shelton Company, LLC, a private investment banking firm, since 1998. From October 1991 to February 1997, Mr. Branch was President and Chief Executive Officer of DIHC Management Corporation, a wholly owned U.S. real estate investment subsidiary of Pensioenfonds PGGM. He has served as a director of the Company since 1999.

Geoffrey Button, Age 56

Mr. Button has been engaged as an independent real estate and financing consultant since 1995. Prior to December 1995, he was the Executive Director of Wyndham Investments, Ltd., a property holding company of Allied Domecq Pension Funds. Mr. Button has served as a director of the Company since 1993.

William Cavanaugh III, Age 66

Mr. Cavanaugh is Chairman of the World Association of Nuclear Operators (WANO). He retired as Chairman of Progress Energy in May 2004 and as Chief Executive Officer in March 2004, posts he held since August 1999. He previously served as President and Chief Executive Officer of Carolina Power & Light Company (CP&L), one of the predecessors to Progress Energy, Inc., from October 1996 to August 1999 and as President and Chief Operating Officer of CP&L from September 1992 to October 1996. He has served as a Director of the Company since 1999.

Ngaire E. Cuneo, Age 54

Ms. Cuneo currently is a partner of Red Associates, LLC a venture capital firm in the financial services sector. Ms. Cuneo served as a consultant to Conseco, Inc. from March 2001 through December 2001. From 1992 through March 2001, she was an Executive Vice President of Conseco, Inc., an owner, operator and provider of services to companies in the financial services industry. Conseco, Inc. filed a petition for bankruptcy in December 2002. Ms. Cuneo has served as a director of the Company since 1995.

Charles R. Eitel, Age 55

Mr. Eitel has served as Chairman and Chief Executive Officer of The Simmons Company, an Atlanta based manufacturer of mattresses, since 2000. From February 1997 through January 2000, Mr. Eitel was the President and Chief Operating Officer of Interface, Inc. He currently serves on the board of directors of The Simmons Company and American Fidelity Assurance. He has served as a director of the Company since 1999.

R. Glenn Hubbard, Ph.D., Age 46

Dr. Hubbard has served as the Dean of Columbia University, Graduate School of Business since 2004. A Columbia faculty member since 1988, he is also the Russell L. Carson Professor of Finance and Economics. Dr. Hubbard is a member of the Panel of Economic Advisers for the Congressional Budget Office, and is a visiting scholar and Director of the Tax Policy Program for the American Enterprise Institute. Dr. Hubbard also serves as a director for ADP, Inc.; Dex Media; KKR Financial Corporation; BlackRock Closed-End Funds; and Ripplewood Holdings. In addition, Dr. Hubbard was Chairman of the President’s Council of Economic Advisers from 2001 to 2003.

Martin C. Jischke, Ph.D., Age 63

Dr. Jischke has been President of Purdue University since 2000. From 1991 to 2000, Dr. Jischke served as President of Iowa State University. Dr. Jischke also served as chancellor of the University of Missouri-Rolla from 1986 to 1991. He serves as a director of Kerr-McGee Corporation, an energy and inorganic chemical company, and Wabash National Corporation, one of the leading manufacturers of truck trailers and composite trailers.

L. Ben Lytle, Age 58

Mr. Lytle currently serves as the Chairman and CEO of AXIA Health Management, LLC, a provider of population health management services. Mr. Lytle is Chairman Emeritus, a member of the Board of Directors and Presiding Director of Executive Sessions of the Board of Wellpoint Inc. (formerly known as Anthem, Inc.), a national insurance and financial services firm. From October 1999 to May 2003, Mr. Lytle served as a non-executive Chairman of the Board. Prior to October 1999 and since 1997, Mr. Lytle was the Chairman, President and Chief Executive Officer of Anthem, Inc. From 1989 through 1997, he was the President and Chief Executive Officer of Anthem, Inc. Mr. Lytle has served as a director of the Company since 1996 and is a director of Anthem, Inc., Monaco Coach Corporation and USI, Inc. He is an Executive-in-Residence at the University of Arizona School of Business, Adjunct Fellow and member of the Board of Trustees of the American Enterprise Institute and Senior Fellow and member of the Board of Trustees of the Hudson Institute. Mr. Lytle is the chair of the Company’s Corporate Governance Committee and also serves as the Company’s Lead Director.

William O. McCoy, Age 71

Mr. McCoy has been a partner of Franklin Street Partners, an investment management firm in Chapel Hill, North Carolina since 1997. From April 1999 to August 2000, Mr. McCoy served as Interim Chancellor of the University of North Carolina at Chapel Hill. Mr. McCoy was Vice President — Finance for the University of North Carolina from February 1995 to November 1998. He retired as Vice Chairman of Bell South Corporation in December 1994. He has served as a director of the Company since 1999. Mr. McCoy also serves on the board of directors of Progress Energy, Inc., Fidelity Investments, Liberty Corporation and North Carolina Capital Management Trust. The Board of Directors has determined that Mr. McCoy, who serves on the Company’s Audit Committee, qualifies as an “audit committee financial expert” as defined under the applicable rules established by the SEC.

John W. Nelley, Jr., Age 56

Mr. Nelley has served as a Managing Director of the Company with responsibilities for the Company’s office and industrial activities in Nashville, Tennessee since 1999 and served in that same capacity for Weeks Corporation from 1996 to 1999. He has served as a director of the Company since 1999. Mr. Nelley serves as

the General Partner of NWI Warehouse Group L.P., the real estate assets of which were transferred to Weeks Corporation in 1996.

Dennis D. Oklak, Age 51

Mr. Oklak was appointed President and Chief Executive Officer of the Company in April 2004. From December 1986 through April 2004, Mr. Oklak held various positions within the Company, including President and Chief Operating Officer and Executive Vice President and Chief Administrative Officer. He is a director of Monaco Coach Corporation, a recreational vehicle manufacturer and serves on the board of governors of the National Association of Real Estate Investment Trusts.

Jack R. Shaw, Age 62

Since August 2002, Mr. Shaw has been the Vice President and Treasurer of the Regenstrief Foundation. From 1986 to June 2002, Mr. Shaw served as managing partner of the Indianapolis office of Ernst & Young. He has served as a director of the Company since 2003. Mr. Shaw serves or has served on the board of directors of many community organizations including the Arts Council of Indianapolis, the Indianapolis Chamber of Commerce, the Indianapolis Convention and Visitors Association, the Children’s Museum of Indianapolis, United Way of Central Indiana, and the Central Indiana Corporate Partnership. In addition, Mr. Shaw serves on the Dean’s Advisory Council of the Indiana University Kelley School of Business. The Board of Directors has determined that Mr. Shaw, who serves as chairman of the Company’s Audit Committee, qualifies as an “audit committee financial expert” as defined under the applicable rules established by the SEC.

Robert J. Woodward, Jr., Age 63

Mr. Woodward has served as a director of the Company since 2002. From 1995 to 2002 he was Executive Vice President — Chief Investment Officer of Nationwide, which is one of the largest insurance and financial service organizations in the world. Mr. Woodward currently serves as Chairman of the Board of The Palmer-Donavin Manufacturing Company, a regional building materials distribution company based in Columbus, Ohio. He has held this position since 1997. Mr. Woodward also serves on the Pension Management and Investment Council of Battelle Memorial Institute and as a member of the board of directors of ProCentury Corporation, a publicly bonded insurance holding company

Lead Director

      Mr. Lytle serves as the lead director of the Company’s Board of Directors. In that capacity, among other things, Mr. Lytle chairs the Company’s Corporate Governance Committee and presides over executive sessions of the Company’s independent Directors, which are held at least quarterly, and communicates to the Chief Executive Officer the results of such sessions. Accordingly, in establishing the position of lead director, the Company ensures that the Board of Directors has an appropriate balance between the powers of the Chief Executive Officer and those of the independent directors.

Independent Directors

      Under the Company’s articles of incorporation, at least a majority of the directors must consist of persons who are “unaffiliated directors,” which means only those persons who are not officers or employees of the Company or any of its affiliates. Commencing with the Annual Meeting, this requirement will increase to 75%. Because none of Mr. Branch, Mr. Button, Mr. Cavanaugh, Ms. Cuneo, Mr. Eitel, Dr. Hubbard, Dr. Jischke, Mr. Lytle, Mr. McCoy, Mr. Shaw nor Mr. Woodward is currently an officer or employee of the Company or any of its affiliates, over 75% of the Company’s current Board consists of unaffiliated directors.

      In addition, under the enhanced corporate governance listing standards of the NYSE, at least a majority of the Company’s directors, and all of the members of the Company’s Audit Committee, Executive Compensation Committee and Corporate Governance Committee, must meet the test of “independence” as defined under the listing standards of the NYSE. The NYSE listing standards provide that to qualify as an “independent” director, in addition to satisfying certain bright-line criteria, the board of directors must affirmatively determine that a director has no material relationship with the Company (either directly or as a

partner, shareholder or officer of an organization that has a relationship with the Company). In January 2005, the Board of Directors undertook a review of director independence. During this review, the Board considered, among other things, relationships and transactions during the past three years between each director or any member of his or her immediate family, on the one hand, and the Company and its subsidiaries and affiliates, on the other hand. The purpose of the review was to determine whether any such relationships or transactions were inconsistent with a determination that the director is independent as defined under the NYSE listing standards. Based on the review, the Board of Directors has determined that all of the directors, except Messrs. Oklak and Nelley, are independent under the listing standards of the NYSE.

Director Retirement Policy

      The Board of Directors has established a policy requiring a director to retire from the Board no later than the date of the Annual Meeting following such director’s 72nd birthday.

BOARD COMMITTEES

      The Board of Directors has four standing committees, with each committee described below. The members of each committee are also listed below. The members of each of the committees are comprised solely of independent directors.

Audit Committee

      The Audit Committee provides assistance to the Board of Directors in fulfilling its responsibility to the shareholders relating to corporate accounting, reporting practices, the quality and integrity of the financial reports and other operating controls of the Company. The Audit Committee also is responsible for the selection of the independent auditors and oversees the auditors’ activities. In addition, the committee supervises and assesses the performance of the Company’s internal auditing department.

      Each member of the Audit Committee satisfies the enhanced independence requirements for audit committee members as defined in the listing standards of the NYSE. The Audit Committee operates under a written charter which is available on the Investor Information/ Corporate Governance section of the Company’s website at www.dukerealty.com. For information regarding procedures established by the Audit Committee for the submission of complaints or concerns about the Company’s accounting, internal accounting controls or auditing matters, you may also visit the Investor Information/ Corporate Governance section of the Company’s website at www.dukerealty.com.

      The Board of Directors has determined that Messrs. Jack Shaw and William O. McCoy are “audit committee financial experts” as defined under the applicable rules of the SEC.

Corporate Governance Committee

      The purpose of the Corporate Governance Committee is to make recommendations to the Board of Directors regarding corporate governance policies and practices, recommend criteria for membership on the Board of Directors, nominate members to the Board of Directors and make recommendations to the Board of Directors concerning the members, size and responsibilities of each of the committees.

      In determining appropriate candidates to nominate to the Board of Directors, the Corporate Governance Committee generally weighs the age, expertise, business experience, character and other board memberships of the candidate. The Board of Directors requires that at least one member of the Board of Directors should meet the criteria for an “audit committee financial expert” as defined under the rules of the SEC. The Corporate Governance Committee may employ a search firm to be used to identify director candidates. In nominating members to the Board of Directors, the Corporate Governance Committee will consider nominees recommended by shareholders if such recommendations are made in writing to the committee. The Company’s by-laws state that the committee must consider such nominees so long as the recommendation is submitted to the Company’s Secretary at least one hundred twenty (120) calendar days before the first anniversary of the date that the Company’s proxy statement was released to shareholders in connection with

the previous year’s annual meeting of shareholders. However, the Corporate Governance Committee may, in its sole discretion, reject any such recommendation for any reason.

      The Corporate Governance Committee operates under a written charter, which is available on the Investor Information/Corporate Governance section of the Company’s website at www.dukerealty.com.

Executive Compensation Committee

      The Executive Compensation Committee reviews and approves the compensation of the Chief Executive Officer and the Company’s compensation strategies, programs, plans and policies. It also oversees the administration of all Company officer and employee benefit plans. In addition, the committee reviews and determines the individual elements of compensation for the executive officers of the Company. The Executive Compensation Committee operates under a written charter, which is available on the Investor Information/ Corporate Governance section of the Company’s website at www.dukerealty.com.

Finance Committee

      The Finance Committee reviews the current and long-term capital raising strategies and policies of the Company, including significant borrowings, the issuance and redemption of preferred and common stock, the establishment and payment of dividends and other significant financial transactions. The committee also reviews and authorizes property developments, property acquisitions, property dispositions and lease transactions exceeding certain threshold amounts established by the Board. The Finance Committee operates under a written charter, which is available on the Investor Information/Corporate Governance section of the Company’s website at www.dukerealty.com.

2004 BOARD COMMITTEE MEMBERSHIP AND MEETINGS

      The table below provides current membership and meeting information for each of the Board committees during 2004.

      The independent directors met separately in executive sessions four times in 2004, in addition to the committee meetings noted above. As Lead Director, Mr. Lytle presided over each of these sessions.

Communications from Shareholders

      As required by the listing standards established by the New York Stock Exchange, the Company provides a procedure for the Board of Directors to accept communications from shareholders of the Company that are reasonably related to protecting or promoting legitimate shareholder interests. Such procedure can be found on the Investor Information/ Corporate Governance section of the Company’s website (www.dukerealty.com). The Company believes that providing a method for interested parties to communicate with the independent directors of the Board of Directors and/or the entire Board of Directors provides a more confidential, candid and efficient method of relaying any interested parties’ concerns or comments. Such communications should be directed to the independent directors by writing to: Independent Directors, c/o Secretary, Duke Realty Corporation, 600 East 96th Street, Suite 100, Indianapolis, Indiana 46240. Communications should be directed to the entire Board of Directors by writing to: Board of Directors, c/o Secretary, Duke Realty Corporation, 600 East 96th Street, Suite 100, Indianapolis, Indiana 46240.

Attendance at Annual Meeting

      In 2004, all directors attended at least 75% of the meetings of the Board of Directors, including meetings of the committees of which they were members. The Company encourages all of its directors to attend the Annual Meeting and, in 2004, all directors attended such meeting.

Compensation of Directors

      The Company does not pay directors who are also employees of the Company additional pay for their services as directors. The non-employee directors currently are entitled to receive the following compensation:

      The directors are also reimbursed for expenses of attending Board and Committee meetings.

      Each non-employee director also receives 2,500 stock options and dividend increase units per year pursuant to the Company’s 1999 Director’s Stock Option and Dividend Increase Unit Plan. These awards currently have the following terms:

      Newly appointed non-employee directors are also entitled to a one-time grant of 5,000 stock options and dividend increase units. If the shareholders approve the 2005 Long-Term Incentive Plan, as described in Proposal Two, the Company will not grant additional stock options or dividend increase units to directors under the 1999 Director’s Stock Option and Dividend Increase Unit Plan, but may grant awards to directors in other forms, including, but not limited to, restricted stock.

      Non-employee directors may elect to receive all or a portion of their board attendance fees in shares of the Company’s common stock pursuant to the Company’s Directors’ Stock Payment Plan rather than in cash. The number of shares any such non-employee director receives is equal to the attendance fee otherwise payable divided by the closing price of the common stock as reported on the NYSE on the date the fee was earned.

      Non-employee directors may also elect to defer the receipt of all or a portion of their annual cash and stock director fees pursuant to the Company’s Directors’ Deferred Compensation Plan. The deferred fees and earnings thereon are to be paid to the directors after they cease to be members of the Board. Deferred fees that are otherwise payable in Company common stock must be invested in a “deferred stock account.” Annual cash fees may be deferred in either a deferred stock account or an “interest account.”

AUDIT COMMITTEE REPORT

      The Audit Committee of the Board of Directors (the “Audit Committee”) is composed of five directors, each of whom is independent under Securities and Exchange Commission Rule 10A-3 and the listing standards of the New York Stock Exchange. The duties and responsibilities of the Audit Committee are set forth in a written Audit Committee Charter, which was amended in January 2004 to comply with the enhanced corporate governance rules of the New York Stock Exchange and regulations adopted by the Securities and Exchange Commission pursuant to the Sarbanes-Oxley Act of 2002.

      Management is responsible for the Company’s internal controls, financial reporting process and compliance with laws and regulations and ethical business standards. KPMG LLP, the Company’s independent registered public accounting firm, is responsible for performing an independent audit of the Company’s consolidated financial statements in accordance with generally accepted auditing standards and to issue a report thereon. The Audit Committee’s responsibility is to monitor and oversee these processes.

      In connection with these responsibilities, the Audit Committee meets separately at most regular committee meetings with management, the Internal Audit Department and the Company’s independent registered public accounting firm. The Audit Committee met with management and KPMG to review and discuss the Company’s 2004 consolidated financial statements. The Audit Committee also discussed with the Company’s independent registered public accounting firm, the matters required by Statement on Auditing Standards No. 61 (Communication with Audit Committees), as amended by SAS No. 90 Audit Committee Communications. Management and the Company’s independent registered public accounting firm also made presentations to the Audit Committee throughout the year on specific topics of interest, including: (i) current developments and best practices for audit committees; (ii) updates on the substantive requirements of the Sarbanes-Oxley Act of 2002, including management’s responsibility for assessing the effectiveness of internal control over financial reporting; (iii) the Company’s critical accounting policies; (iv) the applicability of several new and proposed accounting releases; (v) and numerous SEC initiatives. In addition, the Audit Committee received written disclosures from KPMG required by Independence Standards Board Standard No. 1 (Independence Discussions with Audit Committees), and the Audit Committee discussed with the Company’s independent registered public accounting firm that firm’s independence. The Audit Committee also reviewed the amount of fees paid to KPMG for audit and non-audit services.

      Based upon the Audit Committee’s discussions with management and the Company’s independent registered public accounting firm, and the Audit Committee’s review of the representations of management and KPMG, the Audit Committee recommended that the Board of Directors include the audited consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2004 to be filed with the SEC.

Audit Committee

Jack R. Shaw, Chair

Geoffrey Button

William O. McCoy

James E. Rogers

Robert J. Woodward, Jr.

FEES PAID TO INDEPENDENT ACCOUNTANTS

      The Company incurred the following fees for services rendered by KPMG LLP, the Company’s independent accountants, during 2004 and 2003:

      Audit Fees: $977,065 for 2004 and $661,163 for 2003.

      Audit-Related Fees: $35,724 for 2004 and $17,000 for 2003. These fees include employee benefit plan audits, Sarbanes-Oxley Section 404 planning and testing, and other accounting related consultation.

      Tax Fees: None for 2004 and 2003 for tax compliance and tax planning services.

      All Other Fees: None for 2004 and 2003.

Audit Committee Pre-Approval Policies

      In 2003, the Audit Committee adopted a policy, which requires the pre-approval of all fees paid to KPMG for non-audit related services. Under that policy, the committee pre-approved the following services:

      Any services in excess of the pre-approved amounts, or any services not described above, require the pre-approval of the Audit Committee chair, with a review by the Audit Committee at its next scheduled meeting.

Audit Committee Review

      The Company’s Audit Committee has reviewed the services rendered and the fees billed by KPMG LLP for the fiscal year ended December 31, 2004. The Audit Committee has determined that the services rendered and the fees billed last year that were not related directly to the audit of the Company’s financial statements were compatible with the maintenance of independence of KPMG LLP as the Company’s independent public accountants.

REPORT OF THE EXECUTIVE COMPENSATION COMMITTEE

      This report contains information regarding the cash and equity compensation of persons who served as the Company’s Chief Executive Officer during the last completed fiscal year and the Company’s four other most highly compensated executive officers (the “Named Executive Officers”).

Executive Compensation Philosophy

      The Executive Compensation Committee (the “Compensation Committee”) of the Board of Directors makes all decisions about reviewing and determining the compensation for the Company’s Chief Executive Officer. The Compensation Committee also has authority to review and approve the compensation for the Company’s executive officers, other than the Chief Executive Officer. The primary objectives of the Compensation Committee in determining total compensation of the Company’s executive officers are (i) to enable the Company to attract and retain high quality executives by providing total compensation opportunities with a combination of compensation elements which are at or above competitive opportunities, and (ii) to align shareholder interests and executive rewards by providing substantial incentive opportunities to be earned by the executives if they meet pay-for-performance standards designed to increase long-term shareholder value. In order to accomplish these objectives, the Compensation Committee established an executive compensation program that provides for the following:

      The Compensation Committee reviews compensation levels for the executive officers of the Company near the beginning of each calendar year. In determining compensation for a specific executive, the Compensation Committee considers many factors, including the nature of the executive’s job, the executive’s job performance, the compensation levels of competitive jobs, and the financial performance of the Company. For executive officers other than the Chief Executive Officer, the Compensation Committee considers the recommendations of the Chief Executive Officer. The Compensation Committee also considers competitive market data compiled from independent sources. From time to time, the Compensation Committee utilizes the services of independent consultants to perform analyses and to make recommendations to the Compensation Committee relative to executive compensation matters. This year, the Compensation Committee engaged Frederic W. Cook & Company for assistance in performing a comprehensive review of executive compensation programs at the Company.

      Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), imposes a limitation on the deductibility of certain compensation in excess of $1 million paid to the Chief Executive Officer and the four other most highly paid executive officers of publicly held companies. Certain performance based compensation plans are excluded from this limitation provided the shareholders approve the plan and certain other requirements are met. While the Committee considers the deduction limitation in designing compensation plans and making awards under those plans, the Committee also considers many other factors. The Company did not pay any compensation in 2004 that was not deductible under Section 162 (m) of the Code, and does not believe that any future nondeductible compensation that is paid will have a material impact on the Company.

Base Salaries and Annual Cash Incentives

      The base salaries for the Company’s executive officers, including the Named Executive Officers, are established after a review by the Compensation Committee of the salaries paid to executive officers of a comparison group of other publicly traded REITs, as well as a comparison group of other public, general industry companies. Other factors considered include the individual’s experience, performance and level of responsibility.

      The Compensation Committee establishes an annual cash incentive target at the beginning of each year for each Named Executive Officer. The actual amount paid to an executive is based upon the Compensation Committee’s assessment of (i) the Company’s overall performance versus goals established by the Compensation Committee, and (ii) each executive’s individual performance, with a higher emphasis on overall Company performance for the most senior executives. The overall Company performance factor is based upon a three-tier measurement system consisting of funds from operations (“FFO”) growth per share of common stock, return on shareholders’ equity and return on real estate investments.

Long-Term Incentive Opportunities

      The amount of long-term incentives awarded to the Company’s executive officers, including the Named Executive Officers, on an annual basis is determined at the discretion of the Compensation Committee but is based upon the participant’s level of responsibility within the Company. Through the end of 2004, the long-term incentive opportunities consisted of stock options (“Options”), dividend increase units (“DIUs”), shareholder value plan grants and performance share plan grants. The Compensation Committee expects that future long-term incentive awards will consist of Options, restricted stock units and shareholder value plan grants if the shareholders approve the 2005 Long-Term Incentive Plan as described in Proposal Two of this proxy statement.

Stock Option and Dividend Increase Unit Plans

      The objectives of the Option and DIU plans are to provide executive officers with long-term incentive opportunities aligned with the shareholder benefits of an increased common stock value and increased annual dividends. The number of Options and DIUs issued to each executive is determined annually by the Compensation Committee, with one DIU granted for each Option that is granted. The Options and DIUs are for terms of no more than ten years. With certain limited exceptions, awards made under the Option and DIU plans vest 20% per year over a five-year period. The exercise price of the Options may not be less than the fair market value of the Company’s common stock on the date of grant. The value of each DIU at the date of exercise is equal to the increase in the Company’s annualized dividend per share of common stock from the date of grant to the date of exercise divided by the “Dividend Yield.” The Dividend Yield is defined as the annualized dividend per share of common stock divided by the market value of one share of common stock on the date of grant. DIU value is payable in cash upon exercise.

Shareholder Value Plan

      The objective of the shareholder value plan is to provide executive officers with long-term incentive opportunities directly related to providing total shareholder return in excess of the median of independent market indices. The Compensation Committee determines the annual shareholder value plan award for each executive officer. The award vests entirely three years after the date of grant and the amount paid is based upon the Company’s total shareholder return for such three-year period as compared to independent market indices. The independent market indices used for comparison are the S&P 500 Index and the Equity REIT Total Return Index published by the National Association of Real Estate Investment Trusts (“NAREIT”). The amount of the award payable may range from a low of zero, if both of the rankings of the Company return are less than the 50th percentile of both of the indices, to a high of 300% of the award if the rankings of the Company return are in the 90th percentile or higher of both of the indices, with 100% of the award being payable at the 60th percentile. Shareholder value plan awards are payable in cash.

Performance Share Plan

      Unlike awards under other Company plans, awards under this plan are made from time to time and not on an annual basis. Awards are made in the form of “performance shares,” with each performance share representing the economic equivalent of one share of common stock. Awards are granted at the discretion of the Compensation Committee after considering the participant’s position and level of responsibilities within the Company and the overall compensation of the executive relative to competitive overall compensation levels for such position. Vesting of the awards is based upon the Company’s attainment of certain predefined

levels of earnings growth. At the beginning of each calendar year, the Compensation Committee sets a targeted earnings growth percentage for the year. The amount vested for a particular year is based upon a comparison of the actual earnings growth of the Company to the targeted earnings growth percentage. The value of vested performance shares is paid in cash upon termination of employment.

Compensation of the Chief Executive Officer

Dennis D. Oklak

      The compensation awarded to Mr. Oklak in 2004 consisted of the same elements as the other Named Executive Officers, including an annual base salary, an annual cash incentive award and grants under the Company’s long-term incentive plans.

Base Salary

      Mr. Oklak was appointed President and Chief Executive Officer of the Company in April 2004. Upon appointment, his initial base salary was at $500,000 on an annualized basis for 2004. The Compensation Committee determined Mr. Oklak’s salary after considering his performance level and experience with the Company, and after reviewing a survey of compensation paid to chief executive officers of comparable equity-based REITs and other general publicly traded companies.

Annual Cash Incentive

      Mr. Oklak is generally eligible to receive an annual cash incentive bonus determined by the Compensation Committee. At the beginning of each calendar year, the Compensation Committee establishes a target amount of the award. The amount actually earned is based upon the attainment of certain corporate performance measurements as compared to predetermined targets. These performance measurements include FFO growth per share of common stock, return on shareholders’ equity and return on real estate investments. For 2004, the Company’s FFO per share of common stock was $2.47, its return on shareholders’ equity was 12.23% and its return on real estate investments was 9.06%. Based upon these results versus the predetermined targets, the Compensation Committee determined that Mr. Oklak earned an annual cash incentive award of $425,000 for 2004.

Long-Term Incentive Opportunity Awards

      Mr. Oklak is eligible for Option and DIU grants with a value on the date of grant equal to a percentage of his annual base salary. In February 2004, Mr. Oklak received the following awards:

      Mr. Oklak received a performance share plan grant with a value of $450,000 in 2004. The award contains annual variable vesting provisions, with the amount vested based upon a comparison of actual FFO growth per share of common stock to a target established annually by the Compensation Committee. The annual vesting percentages range from 0% to 30%. The FFO growth target established by the Compensation Committee for the 2004 performance period was $2.48 per share of common stock, with a threshold for vesting under this plan of $2.43 per share of common stock. For 2004, the Company’s FFO per share of common stock was $2.47. Based upon the Company’s actual performance, the targets set by the Compensation Committee and the formulas contained in the plan, 18% of Mr. Oklak’s 2004 award vested on January 1, 2005.

      In February 2004, Mr. Oklak received a payment of $115,785 pursuant to a grant under the shareholder value plan made in 2001. In February 2005, Mr. Oklak received a payment of $113,887 pursuant to a grant under the shareholder value plan made in 2002. The payout percentages of these awards as determined by formulas contained in the shareholder value plan were 126.31% and 124.24% for the grants made in 2001 and

2002, respectively, during which time Mr. Oklak served as the Company’s Executive Vice President and Chief Operating Officer.

Thomas L. Hefner

      The compensation awarded to Mr. Hefner in 2004 consisted of the same elements as the other Named Executive Officers, including an annual base salary, an annual cash incentive award and grants under the Company’s long-term incentive plans.

Base Salary

      Mr. Hefner served as Chief Executive Officer through April 30, 2004. Mr. Hefner’s total base salary earned in 2004 was $257,692. The Compensation Committee determined Mr. Hefner’s salary while he served as Chief Executive Officer after considering his performance level and experience with the Company, and after reviewing a survey of compensation paid to chief executive officers of comparable equity based REITs.

      Mr. Hefner is generally eligible to receive an annual cash incentive bonus determined by the Compensation Committee. At the beginning of each calendar year, the Committee establishes a target amount of the award. The amount actually earned is based upon the attainment of certain corporate performance measurements as compared to predetermined targets. These performance measurements include FFO growth per share of common stock, return on shareholders’ equity and return on real estate investments. At his request, Mr. Hefner did not receive an annual cash incentive award for 2004 and recommended that the Compensation Committee instead approve the payment of equivalent amounts to a trust to be exclusively used to provide additional benefit programs to employees of the Company.

      Mr. Hefner is eligible for Option and DIU grants with a value on the date of grant equal to a percentage of his annual base salary. In February 2004, Mr. Hefner received the following awards:

      In February 2004, Mr. Hefner received a payment of $126,310 pursuant to a grant under the shareholder value plan made in 2001. In February 2005, Mr. Hefner received a payment of $91,109 pursuant to a grant under the shareholder value plan made in 2002. The payout percentages of these awards as determined by formulas contained in that plan were 126.31% and 124.24% for the grants made in 2001 and 2002, respectively.

Compensation Committee

Charles R. Eitel, Chair

Barrington H. Branch

William Cavanaugh III

Ngaire E. Cuneo

Martin C. Jischke

L. Ben Lytle

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

      As noted above, the Executive Compensation Committee is comprised of six independent directors: Messrs. Branch, Cavanaugh, Cuneo, Eitel, Jischke, and Lytle. No member of the Executive Compensation Committee is or was formerly an officer or an employee of the Company. No executive officer of the Company serves as a member of the Board of Directors or compensation committee of any entity that has one or more executive officers serving as a member of the Company’s Board of Directors, nor has such interlocking relationship existed in the past.

STOCK PURCHASE PLANS

      Under two stock purchase plans sponsored by the Company, directors and senior managers were entitled to purchase shares of the Company’s common stock using the proceeds of loans that were guaranteed by the Company. Shares of the Company’s common stock were purchased under these stock purchase plans in 1998 and 1999. The 1999 stock purchase plan program was concluded with full repayment of the loans in 2004.

      The Named Executive Officers and directors that participated in the plans borrowed the entire purchase price of the shares from a bank and are personally obligated to repay the loans. The Company unconditionally guaranteed the payment and performance obligations of the officers and directors to the bank. However, each participant is personally liable to the Company for any payments made under the guarantee as a result of any default by a participant on his loan. As of February 15, 2005, Mr. Matthew A. Cohoat holds a loan guaranteed by the Company in the amount of $450,000. This loan held by Mr. Cohoat relates to the 1998 stock purchase plan and existed prior to the enactment of the Sarbanes-Oxley Act of 2002. No other Named Executive Officers have outstanding loans under stock purchase plans.

      The Company shares purchased with the loan proceeds contain restrictive legends that may not be removed unless the loans are repaid. As of February  15, 2005, 72,603 shares of the Company’s common stock with a market value of $2,350,885 were available to pay the $1,570,000 of loans guaranteed by the Company.

EMPLOYMENT AND SEVERANCE AGREEMENTS

      The Duke Realty Severance Pay Plan (the “Severance Plan”) provides for the payment of severance amounts to certain key officers of the Company if, within one year following a change in control of the Company, the officer’s employment with the Company is terminated by the Company other than “for cause” or if an officer voluntarily terminates his or her employment because of a reduction in the officer’s pay or his forced relocation. A “Level One” participant will receive two times the sum of the compensation awarded to such terminated participant for the calendar year preceding the date of termination and a “Level Two” participant will receive an amount equal to his prior year compensation. All of the Named Executive Officers, other than Mr. Hefner, participate in the Severance Plan, and the Executive Compensation Committee has designated each of these participants as eligible for Level One benefits. Because Mr. Hefner no longer serves as an executive officer of the Company, he is no longer entitled to any benefits under the Severance Plan.

      In 1999, Weeks Corporation (“Weeks”) was merged with and into the Company (the “Merger”). Prior to the Merger, Weeks entered into change of control agreements with certain of its officers. The Company assumed the obligations of Weeks under these agreements on the effective date of the Merger. Under one of these agreements, John W. Nelley, Jr., a director and officer of the Company, is entitled to receive severance payments based upon a multiple of his current compensation, plus immediate vesting of his stock options, if (a) his employment is terminated without cause within two years following a change of control of the Company, or (b) his employment is terminated for any reason within one year following a change of control.

PERFORMANCE GRAPH

      The following graph compares, over the five years ending December 31, 2004, the cumulative total shareholder return on the Company’s common stock with the cumulative total return of the S&P 500 Index and the cumulative total return of the NAREIT Equity REIT Total Return Index.

Comparison of Five-year Cumulative Total Return

Company Common Stock, S&P 500 Index

and NAREIT Equity REIT Total Return Index *

EXECUTIVE COMPENSATION

      The compensation of those individuals who served as Chief Executive Officer during the last completed fiscal year, and the four most highly compensated executive officers other than the Chief Executive Officer who were serving as executive officers at the end of the last completed fiscal year (collectively, the “Named Executive Officers”) at December 31, 2004, the most recent fiscal year end, is shown below.

Summary Compensation Table

      The following table sets forth the compensation awarded, earned by, or paid to the Named Executive Officers of the Company during the last three fiscal years.

      As of December 31, 2004, the number of vested and unvested performance shares for the Named Executive Officers were as follows:

Stock Option Grants in 2004

      The following table contains information concerning stock option grants made to each of the Named Executive Officers during 2004 under the Company’s 1995 Stock Option Plan:

Aggregated Option Exercises and Year-End Option Values

      The following table contains information concerning option exercises and option holdings by each of the Named Executive Officers for 2004:

Long-Term Incentive Plan Awards

      The following table sets forth awards made to the Named Executive Officers in 2004 under the Company’s dividend increase unit plan and shareholder value plan:

Equity Compensation Plan Information

      The following table sets forth certain information as of February 10, 2005 regarding compensation plans under which shares of the Company’s common stock may be issued.

OWNERSHIP OF COMPANY SHARES

      The following table sets forth the beneficial ownership of shares of common stock as of February 15, 2005 for each person or group known to the Company to be holding more than 5% of such common stock and for each director and Named Executive Officer and the directors and executive officers of the Company as a group. The number of shares shown represents the number of shares of common stock the person “beneficially owns,” as determined by the rules of the SEC, including the number of shares that may be issued upon redemption of units in Duke Realty Limited Partnership (“DRLP”). DRLP is controlled by the Company as its sole general partner. Holders of units in DRLP (other than Duke) may exchange them for Duke common stock on a one for one basis.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

      Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the Company’s directors and executive officers and persons who beneficially own more than 10% of the Company’s common stock to file with the SEC initial reports of ownership and reports of changes in ownership of common stock, including derivatives of the Company’s common stock. Officers, directors and greater-than-10%-beneficial owners are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms they file.

      To the Company’s knowledge, based solely on a review of the copies of such reports furnished to the Company and written representations that no other reports were required, all Section 16(a) filing requirements applicable to its officers, directors and greater-than-10% beneficial owners were complied with during the year ended December 31, 2004, except that Mr. John Guinee filed a late Form 4 to report a purchase of preferred stock.

RELATED PARTY TRANSACTIONS

      The Company is the sole general partner of Duke Realty Services Limited Partnership (the “Services Partnership”). The Services Partnership operations are included in the consolidated financial statements of the Company. The Services Partnership was formed in 1993 to provide property management, leasing, construction management and development services to subsidiaries of the Company, to joint ventures partially owned by the Company and to third parties. To ensure that the income from these services did not cause the Company to fail to qualify as a real estate investment trust, a portion of the Services Partnership was acquired by certain officers of the Company upon its formation. Thomas L. Hefner and certain third parties collectively owned 49% of Duke Management, Inc. (“DMI”), which owned 90% of the capital interests of the Services Partnership and a profits interest in the Services Partnership that varies from 10% to 90%. The share of net income of the Services Partnership allocated to DMI in 2004 was $957,378.

      In 1993, the Company was granted an option to acquire DMI’s interest in the Services Partnership in exchange for 833,334 units in DRLP. During 2004, it was determined that the Company could acquire DMI’s interest in the Services Partnership without adversely affecting the Company’s qualification as a real estate investment trust. The unaffiliated members of the Board of Directors determined that it was in the best interests of the Company to acquire such interest. Management then recommended to the unaffiliated members of the Board of Directors that DMI’s interest could be acquired at a favorable price, which was less than the stated option price. The unaffiliated members of the Board of Directors engaged an independent, third-party valuation expert to provide an opinion as to the fairness of the acquisition price. The independent valuation report and the terms of the Contribution Agreement and the Merger Agreement were also reviewed and approved by the Company’s audit committee. Negotiations took place between the Company and DMI, and effective as of January 1, 2005, the Company, DRLP, DMI, and Services Partnership entered into a contribution agreement (the “Contribution Agreement”), pursuant to which DMI contributed to DRLP all of DMI’s limited partnership interest in Services Partnership in exchange for the issuance to DMI of DRLP limited partnership units valued at $15,000,000. Using a $34.42 per unit value (which was based upon a 30-day average price of the Company’s common stock), it was determined that the shareholders of DMI were entitled to receive 435,814 DRLP limited partnership units in return for the contribution of its interest in the Services Partnership. Following the contribution, the Company and DRLP owned 100% of the partnership

interests in Services Partnership. Because DMI owned 65,535 DRLP limited partnership units before the transaction, it owned a total of 501,349 DRLP units following the transaction.

      Concurrent with the Contribution Agreement and effective as of January 1, 2005, the Company, DMI, Thomas L. Hefner and certain third parties entered into an agreement and plan of merger (the “Merger Agreement”) providing for the merger of DMI with and into the Company in return for the issuance to DMI’s shareholders of 501,349 shares of the common stock of the Company. The merger was subject to a number of conditions, including, but not limited to, a determination by the Company that after giving effect to the merger, the Company’s proposed method of operation will enable it to continue to meet the requirements for qualification and taxation as a REIT under the Internal Revenue Code.

      Thomas L. Hefner, the current chairman of the Board of Directors of the Company, owns 20.71% of the capital stock of DMI. Mr. Hefner is not up for re-election. The merger closed on March 1, 2005.

      In 1998, the Company purchased two mortgage loans to One North Capitol Company from third-party lenders (“ONCC”) for a total amount of $9,400,000. On the date of acquisition, the face amount of the principal and interest on the loans was $22,804,393. The loans are nonrecourse to ONCC and are secured by mortgages on an office building. Under the terms of the loans, substantially all of the cash flow from ONCC must be paid to the Company as debt service on the loans. Since it is unlikely that ONCC will be able to repay the entire balance of the loans upon their maturity in 2006, the Company, for financial statement purposes, recorded the acquisition of the loans in the same manner as if it had purchased the building. During 2004, ONCC paid interest of $1,517,375 to the Company. As of December 31, 2004, the outstanding principal amount of the loans plus the accrued but unpaid interest on those loans totaled $18,793,171. Mr. Hefner owns a 6% indirect limited partnership interest in ONCC, with the remainder owned by third parties.

PROPOSAL TWO: APPROVAL OF THE DUKE REALTY CORPORATION

2005 LONG-TERM INCENTIVE PLAN

      On January 26, 2005, the Board of Directors adopted, subject to shareholder approval at the Annual Meeting, the Duke Realty Corporation 2005 Long-Term Incentive Plan (the “2005 Incentive Plan”). The plan will become effective as of the date it is approved by the shareholders.

      The Company maintains the following plans: (i) 1996 Directors’ Stock Payment Plan of Duke Realty Investments, Inc.; (ii) 1999 Directors’ Stock Option and Dividend Increase Unit Plan of Duke Realty Investments, Inc.; (iii) 1995 Shareholder Value Plan of Duke Realty Services Limited Partnership; (iv) 1995 Key Employees’ Stock Option Plan of Duke Realty Investments, Inc.; (v) 1995 Dividend Increase Unit Plan of Duke Realty Services Limited Partnership; and (vi) 2000 Performance Share Plan of Duke-Weeks Realty Corporation (the “Prior Plans”). If the shareholders approve the 2005 Incentive Plan, future equity grants to its employees, officers, directors and consultants will be made from the 2005 Incentive Plan, and the Company will not grant any additional awards under the Prior Plans. Once the Prior Plans are frozen, a maximum of 4,193,833 shares of the Company’s common stock may be issued with respect to stock options and other awards outstanding as of February 10, 2005 under those plans.

      As of February 10, 2005, approximately 175 of the Company’s employees, officers, directors and consultants were eligible to participate in the 2005 Plan.

      A summary of the 2005 Incentive Plan is set forth below. This summary is qualified in its entirety by the full text of the plan, which is attached to this Proxy Statement as Appendix A.

Summary of the Plan

      Purpose. The purpose of the 2005 Incentive Plan is to promote the Company’s success by linking the personal interests of its employees, officers, directors and consultants to those of the Company’s shareholders, and by providing participants with an incentive for outstanding performance.

      Permissible Awards. The 2005 Incentive Plan authorizes the granting of awards in any of the following forms:

      Shares Available for Awards. Subject to adjustment as provided in the 2005 Incentive Plan, the aggregate number of shares of common stock reserved and available for issuance pursuant to awards granted under the 2005 Incentive Plan is 7,000,000. The maximum number of shares of common stock that may be issued upon the exercise of incentive stock options granted under the 2005 Incentive Plan is 5,000,000.

      Limitations on Awards. The maximum number of shares of common stock that may be covered by options and stock appreciation rights granted under the 2005 Incentive Plan to any one person during any one calendar year is 500,000. The maximum number of shares of common stock, share equivalents or limited partnership interests in Duke Realty Limited Partnership (which may be exchanged or redeemed for shares of common stock on a one-for-one basis, or any profits interest in Duke Realty Limited Partnership that may be exchanged or converted into such limited partnership interests) issuable with respect to restricted stock, restricted stock units, deferred stock units, performance shares or other stock-based awards under the 2005 Incentive Plan (excluding any additional shares of common stock, share equivalents or limited partnership interests in Duke Realty Limited Partnership received as a result of actual or deemed dividend reinvestments on such awards) that may be granted to any one person during any one calendar year is 250,000. The aggregate maximum dollar value of any performance-based cash award that may be paid to any one participant during any one calendar year under the 2005 Incentive Plan is $5,000,000.

      Administration. The 2005 Incentive Plan will be administered by the Executive Compensation Committee. The Executive Compensation Committee will have the authority to designate participants; determine the type or types of awards to be granted to each participant and the number, terms and conditions thereof; establish, adopt or revise any rules and regulations as it may deem advisable to administer the 2005 Incentive Plan; and make all other decisions and determinations that may be required under the plan. The Board of Directors may at any time administer the 2005 Incentive Plan. If it does so, it will have all the powers of the Executive Compensation Committee under the 2005 Incentive Plan.

      Awards to Non-Employee Directors. Awards granted to the Company’s non-employee directors under the 2005 Incentive Plan will be made only in accordance with the terms, conditions and parameters of an additional separate plan, program or policy for the compensation of non-employee directors as in effect from time to time, and the Executive Compensation Committee may not make discretionary grants under the 2005 Incentive Plan to non-employee directors. Subject to the shareholders approving the 2005 Incentive Plan at the Annual Meeting, the Board of Directors has approved the Duke Realty Corporation 2005 Directors Compensation Plan (the “2005 Directors Plan”). Any equity-based compensation payable to directors under the 2005 Directors Plan will be granted under the 2005 Incentive Plan and the 2005 Directors Plan will not serve as a separate source of shares for awards.

      Performance Goals. All options and stock appreciation rights granted under the 2005 Incentive Plan will be exempt from the $1,000,000 deduction limit imposed by Code Section 162(m). The Executive Compensation Committee may designate any other award granted under the 2005 Incentive Plan as a qualified performance-based award in order to make the award fully deductible without regard to the $1,000,000 deduction limit imposed by Code Section 162(m). If an award is so designated, the Executive Compensation Committee must establish objectively determinable performance goals for the award based on one or more of the following business criteria, which may be expressed in terms of company-wide objectives or in terms of objectives that relate to the performance of a division, business unit, affiliate, department or function within the company or an affiliate:

      Performance goals may be specified in absolute terms, in percentages, or in terms of growth from period to period or growth rates over time, as well as measured relative to an established or specially created performance index of competitors or peers. The Executive Compensation Committee must establish such goals prior to the beginning of the period for which such performance goal relates (or such later date as may be permitted under applicable tax regulations) and the Executive Compensation Committee may for any reason reduce (but not increase) any award, notwithstanding the achievement of a specified goal.

      Limitations on Transfer; Beneficiaries. No award will be assignable or transferable by a participant other than by will or the laws of descent and distribution or (except in the case of an incentive stock option) pursuant to a qualified domestic relations order. Notwithstanding the foregoing, the Executive Compensation Committee may permit the transfer of nonstatutory stock options by an optionee to: (i) the spouse, child or grandchildren of the optionee; (ii) a trust or trusts for the exclusive benefit of such immediate family members; or (iii) a partnership or limited liability company in which the optionee and/or such immediate family members are the only equity owners. An option that is transferred under the 2005 Incentive Plan is not further transferable by the transferee other than by will or by the laws of descent and distribution. Incentive stock options are not transferable.

      Acceleration Upon Certain Events. Unless otherwise provided in an award certificate, if a participant’s service terminates by reason of death or disability, all of such participant’s outstanding options, stock appreciation rights and other awards in the nature of rights that may be exercised will become fully vested and will remain exercisable for up to two years, all time-based vesting restrictions on his or her outstanding awards will lapse, and, in the case of death only, any performance-based criteria will be deemed to be satisfied at the greater of “target” or actual performance as of the date of death. In the case of a participant’s disability, any awards containing performance-based criteria that have not been met as of the date of termination will be payable to the participant at the time otherwise payable, based on actual performance during the period. Unless otherwise provided in an award certificate, upon the occurrence of a change in control of the Company, all outstanding options, stock appreciation rights and other awards in the nature of rights that may be exercised will become fully vested and exercisable, all time-based vesting restrictions and deferral limitations on outstanding awards will lapse, and any performance-based criteria with respect to outstanding awards (other than those pertaining to vesting) will be deemed to be satisfied at the greater of “target” or actual performance as of the date of the change in control. Awards that are not subject to exercise will be paid within sixty (60) days following the effective date of the change in control.

      In addition, the Executive Compensation Committee may accelerate awards upon a participant’s retirement or other termination of service, or upon the occurrence of a corporate business combination or similar transaction that does not technically qualify as a change in control. The Executive Compensation Committee may discriminate among participants or among awards in exercising such discretion.

      Adjustments. In the event of a stock split, a dividend payable in shares of common stock, or a combination or consolidation of the common stock into a lesser number of shares, the share authorization limits under the 2005 Incentive Plan will automatically be adjusted proportionately, and the shares then subject to each award will automatically be adjusted proportionately without any change in the aggregate purchase price for such award. If the Company is involved in another corporate transaction or event that affects the common stock, such as an extraordinary cash dividend, recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination or exchange of shares, the share authorization limits under the 2005 Incentive Plan will be adjusted proportionately, and the Executive Compensation Committee may adjust outstanding awards to preserve the benefits or potential benefits of the awards.

Termination and Amendment

      The Board of Directors or the Executive Compensation Committee may, at any time and from time to time, terminate or amend the 2005 Incentive Plan, but if an amendment to the plan would materially increase the number of shares of stock issuable under the plan, expand the types of awards provided under the plan, materially expand the class of participants eligible to participate in the plan, materially extend the term of the plan or otherwise constitute a material amendment requiring shareholder approval under applicable listing requirements, laws, policies or regulations, then such amendment will be subject to shareholder approval. In addition, the Board of Directors or the Executive Compensation Committee may condition any amendment on the approval the shareholders for any other reason. No termination or amendment of the 2005 Incentive Plan may adversely affect any award previously granted under the plan without the written consent of the participant.

      The Executive Compensation Committee may amend or terminate outstanding awards. However, such amendments may require the consent of the participant and, unless approved by the shareholders, the exercise price of an outstanding option may not be reduced, directly or indirectly, and the original term of an option may not be extended.

Prohibition on Repricing

      As indicated above under “Termination and Amendment,” outstanding stock options cannot be repriced, directly or indirectly, without the prior consent of the Company’s shareholders. The exchange of an “underwater” option (i.e., an option having an exercise price in excess of the current market value of the underling stock) for another award would be considered an indirect repricing and would, therefore, require the prior consent of the Company’s shareholders.

Certain Federal Tax Effects

      Nonstatutory Stock Options. There will be no federal income tax consequences to the optionee or to the Company upon the grant of a nonstatutory stock option under the 2005 Incentive Plan. When the optionee exercises a nonstatutory option, however, he or she will recognize ordinary income in an amount equal to the excess of the fair market value of the common stock received upon exercise of the option at the time of exercise over the exercise price, and the Company will be allowed a corresponding deduction. Any gain that the optionee realizes when he or she later sells or disposes of the option shares will be short-term or long-term capital gain, depending on how long the shares were held.

      Incentive Stock Options. There typically will be no federal income tax consequences to the optionee or to the Company upon the grant or exercise of an incentive stock option. If the optionee holds the option shares for the required holding period of at least two years after the date the option was granted or one year after exercise, the difference between the exercise price and the amount realized upon sale or disposition of the option shares will be long-term capital gain or loss, and the Company will not be entitled to a federal income tax deduction. If the optionee disposes of the option shares in a sale, exchange, or other disqualifying disposition before the required holding period ends, he or she will recognize taxable ordinary income in an amount equal to the excess of the fair market value of the option shares at the time of exercise over the exercise price, and the Company will be allowed a federal income tax deduction equal to such amount. While the exercise of an incentive stock option does not result in current taxable income, the excess of the fair market value of the option shares at the time of exercise over the exercise price will be an item of adjustment for purposes of determining the optionee’s alternative minimum taxable income.

      Stock Appreciation Rights. A participant receiving a stock appreciation right under the 2005 Incentive Plan will not recognize income, and the Company will not be allowed a tax deduction, at the time the award is granted. When the participant exercises the stock appreciation right, the amount of cash and the fair market value of any shares of common stock received will be ordinary income to the participant and the Company will be allowed a corresponding federal income tax deduction at that time.

      Restricted Stock. Unless a participant makes an election to accelerate recognition of the income to the date of grant as described below, a participant will not recognize income, and the Company will not be allowed a tax deduction, at the time a restricted stock award is granted, provided that the award is nontransferable and is subject to a substantial risk of forfeiture. When the restrictions lapse, the participant will recognize ordinary income equal to the fair market value of the common stock as of that date (less any amount he or she paid for the stock), and the Company will be allowed a corresponding federal income tax deduction at that time, subject to any applicable limitations under Code Section 162(m). If the participant files an election under Code Section 83(b) within 30 days after the date of grant of the restricted stock, he or she will recognize ordinary income as of the date of grant equal to the fair market value of the stock as of that date (less any amount paid for the stock), and the Company will be allowed a corresponding federal income tax deduction at that time, subject to any applicable limitations under Code Section 162(m). Any future appreciation in the stock will be taxable to the participant at capital gains rates. However, if the stock is later forfeited, the participant will not be able to recover the tax previously paid pursuant to the Code Section 83(b) election.

      Restricted or Deferred Stock Units. A participant will not recognize income, and the Company will not be allowed a tax deduction, at the time a stock unit award is granted. Upon receipt of shares of common stock (or the equivalent value in cash or other property) in settlement of a stock unit award, a participant will recognize ordinary income equal to the fair market value of the common stock or other property as of that date (less any amount he or she paid for the stock or property), and the Company will be allowed a corresponding federal income tax deduction at that time, subject to any applicable limitations under Code Section 162(m).

      Performance Awards. A participant generally will not recognize income, and the Company will not be allowed a tax deduction, at the time performance awards are granted. Upon receipt of shares of cash, stock or other property in settlement of a performance award, the cash amount or the fair market value of the stock or other property will be ordinary income to the participant, and the Company will be allowed a corresponding federal income tax deduction at that time, subject to any applicable limitations under Code Section 162(m).

      Code Section 409A. It is intended that options, stock appreciation rights, restricted stock awards and stock unit awards granted under the 2005 Incentive Plan will be exempt from the application of Code Section 409A. If any award is structured in a way that would cause Code Section 409A to apply and if the requirements of 409A are not met, the taxable events as described above could apply earlier than described above and could result in the imposition of additional taxes and penalties.

Benefits to Named Executive Officers and Others

      No awards have been granted under the 2005 Incentive Plan. If the 2005 Incentive Plan is approved by the shareholders at the Annual Meeting, the Company’s named executive officers will periodically receive awards under the plan. These awards will be made at the discretion of the Executive Compensation Committee. Therefore, it is not presently possible to determine the benefits or amounts that will be received by such persons pursuant to the 2005 Incentive Plan in the future. However, the Executive Compensation Committee has determined that it will grant three types of awards under the plan to named executive officers in the foreseeable future: stock options, restricted stock units, and performance share units under the 2005 Shareholder Value Plan. Based upon the dollar values of the long-term awards granted by the Executive Compensation Committee in January 2005, and had the 2005 Incentive Plan been in place at that time, the following table shows the approximate amount of each type of award that would have been granted to the named executive officers for 2005.

2005 Incentive Plan

      Non-employee directors will periodically receive awards of restricted stock units under the 2005 Incentive Plan pursuant to the formula for such awards contained in the 2005 Director Plan. The 2005 Director Plan provides for an initial grant of $50,000 in restricted stock units on the directors first date of joining the Board and annual grants of $25,000 in restricted stock units. For 2005 only, the stock options and dividend increase units that were granted to the Company’s non-employee directors in January 2005 under the 1999 Directors’ Stock Option and Dividend Increase Unit Plan of Duke Realty Investments, Inc. will be cancelled and replaced with restricted stock units under the 2005 Incentive Plan, as reflected in the following table. The Board may change the amounts of the initial and annual grants awarded to the non-employee directors in the future. Therefore, it is not presently possible to determine the benefits or amounts that will be received by such directors pursuant to the plan in the future.

Recommendation of the Board of Directors

      The Board of Directors has approved and declared the advisability of the 2005 Incentive Plan and believes that it is fair to, and in the best interest of, the Company and its shareholders. THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” APPROVAL OF THE DUKE REALTY CORPORATION 2005 LONG-TERM INCENTIVE PLAN.

PROPOSAL THREE: APPROVAL OF AMENDMENT TO ANTI-DILUTION

PROVISIONS OF PREVIOUSLY EXISTING LONG-TERM INCENTIVE PLANS

      On January 26, 2005, the Board of Directors adopted, subject to shareholder approval at the Annual Meeting, amendments to the following plans (the “Subject Plans”):

      If the shareholders approve the 2005 Incentive Plan, as described in Proposal Two, the Company will not grant any additional awards under the 1995 Stock Option Plan or the 1999 Director Option/ DIU Plan. No shares are available for issuance under the 1999 Salary Replacement Plan; therefore, no future awards will be made under that plan. The amendments to the Subject Plans described in this Proposal Three are proposed in

order to affect awards that are already outstanding under the Subject Plans. The amendments to the Subject Plans will become effective as of the date they are approved by the shareholders.

      Under the federal tax laws, a real estate investment trust (“REIT”) is required to distribute at least ninety percent of its taxable income to its shareholders. In the event of the recognition of a large amount of taxable income (which could occur upon the sale of a substantial amount of real estate held by a REIT), a REIT may be required to supplement its regular quarterly cash dividends with the payment of a special nonrecurring cash dividend in order to meet the ninety percent distribution test. Such a special dividend could result in a reduction of the REIT’s stock price in an amount approximating the special dividend paid per share, and, accordingly, may reduce the value of stock options previously granted by the REIT. Because participants in the Company’s stock option plans may be adversely impacted by the declaration of a special dividend, they may have a disincentive to pursue transactions that could result in the recognition of an unusually large amount of taxable income. The proposed amendments to the Subject Plans will give the Executive Compensation Committee the ability to revise the terms of outstanding awards so that their values are not adversely impacted by the payment of a special dividend. The Board of Directors believes that the proposed amendments will align the interests of shareholders and participants in the Subject Plans with respect to transactions that may require the payment of an extraordinary cash dividend.

      A summary of the amendments to the Subject Plans is set forth below. This summary is qualified in its entirety by the full text of the amendments, which is attached to this Proxy Statement as Appendix B.

Summary of the Proposed Amendments

      Each of the Subject Plans permits the Executive Compensation Committee to make appropriate adjustments or substitution in the aggregate number, price, and kind of shares covered under any options or dividend increase units granted under the Subject Plans in the event of any changes in the common stock of the Company through stock dividends, split-ups, recapitalizations, reclassifications, conversions or otherwise. The Board of Directors has approved an amendment to each of the Subject Plans, subject to approval by the shareholders, to permit the Executive Compensation Committee to also make appropriate adjustments to outstanding options or dividend increase units under the Subject Plans in the event of a payment of an extraordinary cash dividend by the Company to its shareholders.

      Summaries of the 1995 Stock Option Plan, the 1999 Director Option/ DIU Plan and the 1999 Salary Replacement Plan, and the proposed amendments to each, are set forth below.

1995 Stock Option Plan

      Purpose and Status. The 1995 Stock Option Plan is intended to promote the interests of the Company by further aligning the interests of the shareholders and the Company’s officers and key employees through stock ownership. Such plan permits the grant of incentive stock options and nonqualified stock options. As of February 10, 2005, there were approximately 150 of the Company’s officers and employees eligible to participate in the 1995 Stock Option Plan. However, if the shareholders approve the 2005 Incentive Plan, as described in Proposal Two, the Company will not grant any additional awards under the 1995 Stock Option Plan.

      Stock Options. As of February 10, 2005, there were 3,618,589 options outstanding under the 1995 Stock Option Plan. The exercise price of these options is equal to the fair market value of the stock as of the date of grant. The options have a term of 10 years and generally vest over five years, but will vest earlier upon the optionee’s death, disability or retirement, or upon the occurrence of a change in control of the Company.

      Anti-Dilution Provisions and Proposed Amendment. The 1995 Stock Option Plan provides that in the event of any change in the common stock of the Company through stock dividends, split-ups, recapitalizations, reclassifications, conversions or otherwise, or in the event that other stock shall be substituted for the present common stock of the Company as the result of any merger, consolidation or reorganization or similar transaction that constitutes a change in control of the Company, the Executive Compensation Committee may make appropriate adjustment or substitution in the aggregate number, price and kind of shares available under the plan or covered under any options granted under the plan. The sole purpose of the proposed amendment to this plan is to permit the Executive Compensation Committee to also make appropriate adjustments to

outstanding options in the event of a payment of an extraordinary cash dividend by the Company to its shareholders.

1999 Director Option/ DIU Plan

      Purpose and Status. The 1999 Director Option/ DIU Plan is intended to promote the interests of the Company by granting nonqualified stock options and dividend increase units to the members of the Board of Directors of the Company, thereby encouraging their focus on the growth, profitability and dividend paying capacity of the Company. As of February 10, 2005, all of the Company’s directors were eligible to participate in the 1999 Director Option/ DIU Plan. However, if the shareholders approve the 2005 Incentive Plan, as described in Proposal Two, the Company will not grant any additional awards under this plan and awards granted under this plan in January 2005 will be cancelled.

      Stock Options and Dividend Increase Units. As of February 10, 2005, there were 195,000 options and 195,000 dividend increase units outstanding under the 1999 Director Option/ DIU Plan. The exercise price of these options is equal to the fair market value of the stock as of the date of grant. The value of a dividend increase unit on the date of exercise is equal to the increase in the Company’s annualized dividend per share of common stock from the date of grant to the date of exercise, divided by the dividend yield (which is defined as the annualized dividend per share of common stock divided by the market value of one share of common stock on the date of grant). Options and dividend increase units granted under this plan generally expire 10 years after the date of grant, and vest over five years, but will vest earlier upon the director’s death, disability or retirement, or upon the occurrence of a change in control of the Company.

      Anti-Dilution Provisions and Proposed Amendment. The 1999 Director Option/ DIU Plan provides that in the event of any change in the common stock of the Company through stock dividends, split-ups, recapitalizations, reclassifications or otherwise, or in the event that other stock shall be substituted for the present common stock of the Company as the result of any merger, consolidation or reorganization or similar transaction that constitutes a change in control of the Company, the Executive Compensation Committee will make appropriate adjustment or substitution in the aggregate number, price and kind of shares to be distributed under the plan and in the calculation of a dividend increase unit’s value, and also in the aggregate number, price and kind of shares available under the plan or covered under any options and dividend increase units granted under the plan. The sole purpose of the proposed amendment to this plan is to permit the Executive Compensation Committee to also make appropriate adjustments to outstanding options and dividend increase units in the event of a payment of an extraordinary cash dividend by the Company to its shareholders.

1999 Salary Replacement Plan

      Purpose and Status. The 1999 Salary Replacement Plan is designed to promote the interests of the Company and its shareholders by providing officers and key employees the opportunity to receive nonqualified stock options and dividend increase units in lieu of some all or a portion of their base salary, annual incentive bonus or payments under the Company’s Shareholder Value Plan, thereby encouraging such employee’s focus on the growth, profitability and dividend paying capacity of the Company. As of February 10, 2005, there were no shares available for issuance under this plan; therefore, no future awards will be made under this plan.

      Stock Options and Dividend Increase Units. As of February 10, 2005, there were 8,621 options and 8,621 dividend increase units outstanding under the 1999 Salary Replacement Plan. The exercise price of these options is equal to the fair market value of the stock as of the date of grant. All awards made under the Salary Replacement Plan were fully vested on the date of grant. All such awards expire at the end of 10 years, or earlier in certain events.

      Anti-Dilution Provisions and Proposed Amendment. The 1999 Salary Replacement Plan provides that in the event of any change in the common stock of the Company through stock dividends, split-ups, recapitalizations, reclassifications or otherwise, or in the event that other stock shall be substituted for the present common stock of the Company as the result of any merger, consolidation or reorganization or similar transaction that constitutes a change in control of the Company, the Executive Compensation Committee will make appropriate adjustment or substitution in the aggregate number, price and kind of shares to be

distributed under the plan and in the calculation of a dividend increase unit’s value, and also in the aggregate number, price and kind of shares available under the plan or covered under any options and dividend increase units granted under the plan. The sole purpose of the proposed amendment to this plan is to permit the Executive Compensation Committee to also make appropriate adjustments to outstanding options and dividend increase units in the event of a payment of an extraordinary cash dividend by the Company to its shareholders.

Benefits to Named Executive Officers and Others

      As of February 10, 2005, the following persons and groups held outstanding awards under the 1995 Stock Option Plan, the 1999 Director Option/ DIU Plan, and the 1999 Salary Replacement Plan. If the amendments are approved, such persons and groups would benefit from the proposed amendments in the case of an extraordinary cash dividend in that their awards would be equitably adjusted.

Recommendation of the Board of Directors

      The Board of Directors has approved and declared the advisability of the proposed amendments to the 1995 Stock Option Plan, the 1999 Director Option/ DIU Plan, and the 1999 Salary Replacement Plan, and believes those amendments are fair to, and in the best interest of, the Company and its shareholders. THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE APPROVAL OF AMENDMENTS TO ANTI-DILUTION PROVISIONS OF THE PREVIOUSLY EXISTING LONG-TERM INCENTIVE PLANS.

PROPOSAL FOUR: RATIFICATION OF REAPPOINTMENT OF

INDEPENDENT PUBLIC ACCOUNTANTS

      The Audit Committee has selected KPMG LLP as the Company’s independent public accounting firm for the fiscal year ending December 31, 2005 and has further directed that management submit the selection of the independent public accounting firm for ratification by the shareholders at the Annual Meeting.

      Representatives of KPMG LLP will be present at the Annual Meeting, will have the opportunity to make a statement if they so desire and will be available to respond to appropriate questions.

      The affirmative vote of the holders of a majority of the shares of common stock present in person or represented by proxy and entitled to vote at the Annual Meeting will be required to ratify the selection of

KPMG LLP. Abstentions will be counted toward the tabulation of votes cast on proposals presented to the shareholders and will have the same effect as negative notes. Broker non-votes are counted towards a quorum, but are not counted for any purpose in determining whether this matter has been approved.

      THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE RATIFICATION OF KPMG LLP AS THE COMPANY’S INDEPENDENT PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR 2005.

PROPOSAL FIVE: SHAREHOLDER PROPOSAL

      Rule 14a-8 of the Securities Exchange Act of 1934 requires the Company to include properly submitted shareholder proposals in its proxy statement. The Company has been notified that the Service Employees International Union (“SEIU”), 1313 L Street, N.W., Washington, D.C. 2005, is the beneficial owner of the requisite number of shares of the Company’s common stock, and intends to present a shareholder proposal for consideration at the Annual Meeting. If SEIU, or its representative who is qualified under state law to present the proposal on its behalf, attends the Annual Meeting and presents the proposal, the proposal will be voted upon. The Company is not responsible for the content of the following shareholder proposal or the proposing shareholder’s supporting statement.

Shareholder Proposal

      “RESOLVED, that the shareholders of Duke Realty Corporation (the “Company”) urge the Board of Directors to implement a policy requiring annual disclosure in a separate report to shareholders of the following information regarding each transaction between Duke and any executive officer or director:

Provided, however, that no disclosure shall be required with respect to transactions that are amounts due from an executive officer or director for purchases subject to usual trade terms, for ordinary travel and expense payments and for other transactions in the ordinary course of business.

SUPPORTING STATEMENT

      Related party transactions — transactions between a company and its insiders — create a risk that the insiders may benefit themselves at the company’s expense by causing the company to engage in transactions that are not on arm’s length terms. They may also inflate earnings or distort financial results. (See AICPA Practice Alert 95-3)

      Related party transactions have been criticized by former SEC chairman Richard Breeden, WorldCom’s corporate monitor, who said in his report on WorldCom, “Shareholders have everything to lose and nothing to gain from related party transactions and personal financial conflicts among officers and the company.” The scandals at Hollinger, Adelphia, Tyco and Enron-all of which involved related party transactions — illustrate the risks created by these deals.”

      Duke has engaged in several related party transactions over the past few years. For example, Duke purchased loans to an entity, ONCC, in which several Duke insiders, including board chairman and CEO Thomas Hefner, hold a 10.9% ownership interest. ONCC is not expected to repay the loans in full, so Duke is carrying them on its books as if it had bought the building securing the loan obligation.

      In addition, Duke continues to use a structure in which management, leasing, construction management and development services are provided to Duke subsidiaries, joint ventures and third parties by a separate services company, 90% of whose “capital interests” and 10-90% of whose profits interest (Duke’s proxy statement disclosure describes this interest as varying between these percentages) are owned indirectly by Duke insiders. The tax law reasons supporting the use of such structures by REITs were abolished by the REIT Modernization Act, which took effect on January 1, 2001.

      We believe that shareholders should receive information about the process used to approve related party transactions and the safeguards employed to ensure such deals are in shareholders’ interest. This information will assist shareholders in monitoring Duke’s board and management.

      We urge shareholders to vote FOR this proposal.

Board of Directors’ Statement in Opposition

      After carefully considering this proposal and the arguments for and against implementing a policy requiring annual disclosure in a separate report to shareholders of certain information regarding each transaction between Duke and any executive officer or director, the Board of Directors, based on the recommendation of the Corporate Governance Committee, believes that the proposal submitted is not in your best interest as a shareholder of the Company for the reasons set forth below. We recommend that you vote AGAINST the proposal.

      The Company is committed to providing full and transparent disclosure regarding related party transactions in the manner required by the federal securities laws. In accordance with the policies and procedures established by the Company’s Board of Directors, the Company’s independent directors must approve all related party transactions.

      In accordance with the rules and regulations of the SEC, the Company currently provides disclosure in its annual proxy statement in response to Item 404 of Regulation S-K. Under Item 404 of Regulation S-K, which is uniformly applicable to all public companies, the Company is required to provide information as to the following:

      The Company always provides the disclosure required by Item 404 of Regulation S-K in its annual proxy statement under the caption “Related Party Transactions.” SEIU proposes that the Company present additional disclosure with respect to all transactions between the Company and any executive officer, not only those transactions required to be disclosed under Item 404 of Regulation S-K.

      When the SEC adopted Item 404 of Regulation S-K in 1982, it stressed the importance of having uniform disclosure regarding related party transactions. The SEC also stated that “overly detailed disclosure about relationships and transactions may result in truly significant relationships and transactions being obfuscated by less important information.” We believe that Item 404 of Regulation S-K was carefully crafted by the SEC so as to ensure the disclosure by public companies of all significant related party transactions. In contrast, the disclosure proposed by SEIU would entail disclosure of every transaction between the Company and its directors and executive officers (regardless of whether it is not disclosure required by the SEC).

      In light of the existing proxy statement disclosure requirements for related party transactions, the Company’s long-time policy that independent directors approve all related party transactions, and the unwillingness of other companies to support these types of shareholder proposals, we believe that the policy implementations urged by Proposal Five are not advisable or appropriate. Furthermore, the Board of Directors, together with the Corporate Governance Committee, believes that the risk of confusion and obfuscation of truly significant related party transactions, together with the significant cost and burden of including additional disclosure, would far outweigh any benefits that shareholders could derive from the proposal by SEIU.

      THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “AGAINST” THE SHAREHOLDER PROPOSAL.

SHAREHOLDER PROPOSALS FOR 2006 ANNUAL MEETING

      Proposals of shareholders to be presented at the 2006 annual meeting of shareholders must be received by the Company’s Secretary prior to November 18, 2005, which is 120 calendar days prior to the anniversary of the mailing of this proxy statement, to be considered for inclusion in the 2006 proxy material. If a shareholder wishes to present a proposal at the 2006 annual meeting, whether or not the proposal is intended to be included in the 2006 proxy material, the bylaws require that the shareholder give advance written notice to the Company’s Secretary not less than 60 nor more than 90 days prior to the anniversary of the Annual Meeting. If a shareholder is permitted to present a proposal at the 2006 annual meeting but the proposal was not included in the 2006 proxy material, the Company believes that its proxy holder would have the discretionary authority granted by the proxy card (and as permitted under SEC rules) to vote on the proposal if the proposal was received after January 30, 2006, which is 45 calendar days prior to the anniversary of the mailing of this proxy statement.

ANNUAL REPORT

      A copy of the Company’s Annual Report for the year ended December 31, 2004 has been provided to all shareholders of record as of the Record Date. A copy of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2004 may be obtained, free of charge, by any shareholder by writing to Duke Realty Corporation, 600 East 96th Street, Suite 100, Indianapolis, Indiana 46240, Attention: Investor Relations. Additionally, the EDGAR version of the Company’s Annual Report on Form 10-K is available via the SEC’s web site at www.sec.gov.

OTHER MATTERS

      The Board of Directors knows of no other matters to be brought before this Annual Meeting. However, if other matters should properly come before the Annual Meeting, it is the intention of each person named in the proxy to vote such proxy in accordance with his or her judgment on such matters.

      IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. Whether or not you plan to attend the meeting, you are urged to vote your proxy.

Indianapolis, Indiana

March 16, 2005

APPENDIX A

DUKE REALTY CORPORATION

2005 LONG-TERM INCENTIVE PLAN

DUKE REALTY CORPORATION

2005 LONG-TERM INCENTIVE PLAN

DUKE REALTY CORPORATION

2005 LONG-TERM INCENTIVE PLAN

ARTICLE 1

PURPOSE

      1.1.     General. The purpose of the Duke Realty Corporation 2005 Long-Term Incentive Plan (the “Plan”) is to promote the success, and enhance the value, of Duke Realty Corporation (the “Company”), by linking the personal interests of employees, officers, directors and consultants of the Company or any Affiliate (as defined below) to those of Company stockholders and by providing such persons with an incentive for outstanding performance. The Plan is further intended to provide flexibility to the Company in its ability to motivate, attract, and retain the services of employees, officers, directors and consultants upon whose judgment, interest, and special effort the successful conduct of the Company’s operation is largely dependent. Accordingly, the Plan permits the grant of incentive awards from time to time to selected employees, officers, directors and consultants of the Company and its Affiliates.

ARTICLE 2

DEFINITIONS

      2.1.     Definitions. When a word or phrase appears in this Plan with the initial letter capitalized, and the word or phrase does not commence a sentence, the word or phrase shall generally be given the meaning ascribed to it in this Section or in Section 1.1 unless a clearly different meaning is required by the context. The following words and phrases shall have the following meanings:

ARTICLE 3

EFFECTIVE TERM OF PLAN

      3.1.     Effective Date. The Plan shall be effective as of the date it is approved by the stockholders of the Company (the “Effective Date”).

      3.2.     Termination of Plan. The Plan shall terminate on the tenth anniversary of the Effective Date unless earlier terminated as provided herein. The termination of the Plan on such date shall not affect the validity of any Award outstanding on the date of termination.

ARTICLE 4

ADMINISTRATION

      4.1.     Committee. The Plan shall be administered by a Committee appointed by the Board (which Committee shall consist of at least two directors) or, at the discretion of the Board from time to time, the Plan may be administered by the Board. It is intended that at least two of the directors appointed to serve on the Committee shall be “non-employee directors” (within the meaning of Rule 16b-3 promulgated under the 1934 Act) and “outside directors” (within the meaning of Code Section 162(m)) and that any such members of the Committee who do not so qualify shall abstain from participating in any decision to make or administer Awards that are made to Eligible Participants who at the time of consideration for such Award (i) are persons subject to the short-swing profit rules of Section 16 of the 1934 Act, or (ii) are reasonably anticipated to become Covered Employees during the term of the Award. However, the mere fact that a Committee member shall fail to qualify under either of the foregoing requirements or shall fail to abstain from such action shall not invalidate any Award made by the Committee which Award is otherwise validly made under the Plan. The members of the Committee shall be appointed by, and may be changed at any time and from time to time in the discretion of, the Board. The Board may reserve to itself any or all of the authority and responsibility of the Committee under the Plan or may act as administrator of the Plan for any and all purposes. To the extent the Board has reserved any authority and responsibility or during any time that the Board is acting as administrator of the Plan, it shall have all the powers of the Committee hereunder, and any reference herein to the Committee (other than in this Section 4.1) shall include the Board. To the extent any action of the Board under the Plan conflicts with actions taken by the Committee, the actions of the Board shall control.

      4.2.     Action and Interpretations by the Committee. For purposes of administering the Plan, the Committee may from time to time adopt rules, regulations, guidelines and procedures for carrying out the provisions and purposes of the Plan and make such other determinations, not inconsistent with the Plan, as the Committee may deem appropriate. The Committee’s interpretation of the Plan, any Awards granted under the Plan, any Award Certificate and all decisions and determinations by the Committee with respect to the Plan are final, binding, and conclusive on all parties. Each member of the Committee is entitled to, in good faith, rely or act upon any report or other information furnished to that member by any officer or other employee of the Company or any Affiliate, the Company’s or an Affiliate’s independent certified public accountants, Company counsel or any executive compensation consultant or other professional retained by the Company to assist in the administration of the Plan.

      4.3.     Authority of Committee. Except as provided below, the Committee has the exclusive power, authority and discretion to:

      Notwithstanding the foregoing, grants of Awards to Non-Employee Directors hereunder shall be made only in accordance with the terms, conditions and parameters of a plan, program or policy for the compensation of Non-Employee Directors as in effect from time to time, and the Committee may not make discretionary grants hereunder to Non-Employee Directors.

      Notwithstanding the above, the Board or the Committee may, by resolution, expressly delegate to a special committee, consisting of one or more directors who are also officers of the Company, the authority, within specified parameters, to (i) designate officers, employees and/or consultants of the Company or any of its Affiliates to be recipients of Awards under the Plan, and (ii) to determine the number of such Awards to be granted to any such Participants; provided that a limit on the total number or dollar value of Awards to be granted to any such Participants shall be approved in advance by the Board or the Committee and provided further that such delegation of duties and responsibilities to such special committee may not be made with respect to the grant of Awards to eligible participants (a) who are subject to Section 16(a) of the 1934 Act at the Grant Date, or (b) who as of the Grant Date are reasonably anticipated to be become Covered Employees during the term of the Award. The acts of such delegates shall be treated hereunder as acts of the Board and such delegates shall report regularly to the Board and the Committee regarding the delegated duties and responsibilities and any Awards so granted.

      4.4.     Award Certificates. Each Award shall be evidenced by an Award Certificate. Each Award Certificate shall include such provisions, not inconsistent with the Plan, as may be specified by the Committee.

ARTICLE 5

SHARES SUBJECT TO THE PLAN

      5.1.     Number of Shares. Subject to adjustment as provided in Sections 5.2 and 15.1, the aggregate number of Shares reserved and available for issuance pursuant to Awards granted under the Plan shall be 7,000,000. The maximum number of Shares that may be issued upon exercise of Incentive Stock Options granted under the Plan shall be 5,000,000.

      5.2.     Share Counting.

      (a) To the extent that an Award is canceled, terminates, expires, is forfeited or lapses for any reason, any unissued Shares from such Award will again be available for issuance pursuant to Awards granted under the Plan.

      (b) Shares subject to Awards settled in cash will again be available for issuance pursuant to Awards granted under the Plan.

      (c) Shares withheld from an Award to satisfy minimum tax withholding requirements will again be available for issuance pursuant to Awards granted under the Plan, but Shares delivered by a Participant (by either actual delivery or attestation) to satisfy tax withholding requirements shall not be added back to the number of Shares available for issuance under the Plan.

      (d) If the exercise price of an Option is satisfied by delivering Shares to the Company (by either actual delivery or attestation), only the net number of Shares actually issued by the Company shall be considered for purposes of determining the number of Shares remaining available for issuance pursuant to Awards granted under the Plan.

      (e) To the extent that the full number of Shares subject to an Award is not issued for any reason, only the number of Shares issued and delivered shall be considered for purposes of determining the number of Shares remaining available for issuance pursuant to Awards granted under the Plan. Nothing in this subsection shall imply that any particular type of cashless exercise of an Option is permitted under the Plan, that decision being reserved to the Committee or other provisions of the Plan.

      5.3.     Stock Distributed. Any Stock distributed pursuant to an Award may consist, in whole or in part, of authorized and unissued Stock, treasury Stock or Stock purchased on the open market.

      5.4.     Limitation on Awards. Notwithstanding any provision in the Plan to the contrary (but subject to adjustment as provided in Section 15.1), the maximum number of Shares with respect to one or more Options and/or SARs that may be granted during any one calendar year under the Plan to any one Participant shall be 500,000. The maximum number of Shares, Share equivalents or DRLP Units issuable with respect to one or more Full Value Awards (excluding any additional Shares, Share equivalents or DRLP Units received as a result of actual or deemed dividend reinvestments on such Awards) that may be granted during any one calendar year under the Plan to any one Participant shall be 250,000. The maximum aggregate dollar value of any Performance-Based Cash Award that may be granted to any one Participant during any one calendar year under the Plan shall be $5,000,000. For purposes of the preceding sentence, the maximum dollar value of a Performance Based Cash Award shall equal the maximum dollar amount that would be payable at the end of the performance period if all performance-based conditions were attained and the award was fully vested. With respect to any election to defer the payment of Full Value Awards or Performance-Based Cash Awards to a later date, any Shares, Share equivalents, DRLP Units or cash payments made to a Participant in excess of the amounts payable at the time of the deferral shall not be subject to the above limitations, provided that the additional amount paid is based either on a reasonable rate of interest or one or more predetermined actual investments in accordance with Treasury Regulation 1.162-27(e)(2)(iii)(B).

ARTICLE 6

ELIGIBILITY

      6.1.     General. Awards may be granted only to Eligible Participants; except that Incentive Stock Options may be granted to only to Eligible Participants who are employees of the Company or a Parent or Subsidiary as defined in Section 424(e) and (f) of the Code.

ARTICLE 7

STOCK OPTIONS

      7.1.     General. The Committee is authorized to grant Options to Participants subject to terms and conditions, not inconsistent with the provisions of the Plan, as the Committee shall establish, including the following:

      7.2.     Incentive Stock Options. The terms of any Incentive Stock Options granted under the Plan must comply with the following additional rules:

ARTICLE 8

STOCK APPRECIATION RIGHTS

      8.1.     Grant of Stock Appreciation Rights. The Committee is authorized to grant Stock Appreciation Rights to Participants in conjunction with all or part of any Award granted under the Plan or at any subsequent time during the term of such Award (“Tandem Stock Appreciation Rights”) or without regard to any other Award (“Freestanding Stock Appreciation Rights”), in each case upon such terms and conditions as the Committee may establish, including the following: