×

Liberty Property Trust Announces Portfolio Repositioning and Financial Projections

Anticipated 2016 Highlights:

  • $900 million – $1.2 billion in asset sales in 2016
  • Development pipeline to grow, yield in excess of 8%
  • Industrial occupancy and rents continue to grow, fueling positive same store performance

2015 Activity Subsequent to Third Quarter Earnings Release (all as of December 15, 2015):

  • 2015 sales reach $550 million with sale of Horsham, PA properties
  • Largest development pipeline in the company’s 44-year history is 55% pre-leased
  • 669,000 square feet of development started
  • Most significant office vacancy in portfolio leased


MALVERN, Pa., Dec. 15, 2015 (GLOBE NEWSWIRE) -- Liberty Property Trust (NYSE:LPT) announced plans to complete its multi-year portfolio repositioning plan through planned sales of approximately 8.5 million square feet of suburban office properties. The execution of this sale strategy is the primary factor in Liberty’s expectation to report funds from operations (“FFO”) for 2016 in the range of $2.35-$2.55, with timing of the sales contributing to the wider range. The company reaffirmed its previously announced expectation to report FFO per share for 2015 in the range of $2.66-$2.69. Additional information and assumptions contributing to this guidance are available in the Investors section of Liberty’s website at www.libertyproperty.com.

Commenting on this guidance, Liberty’s chief executive officer Bill Hankowsky said: “In 2013, Liberty set in motion a five-year strategic plan for transforming our company to one that can take full advantage of changes in how business utilizes real estate, and fully devote our unique development, leasing and management talents to higher-value opportunities. As we approach 2016, we can see the conclusion of this transformation being completed. Our intent is to sell most if not all of our remaining non-core suburban office product. The result will be a Liberty footprint comprising our U.S. & U.K. industrial platform plus a value-add focused office platform in four markets.”

Proceeds from asset sales will be used to fund Liberty’s growing development pipeline and potential acquisitions. Liberty expects to start $500-$700 million in new development projects in 2016. Expected results also reflect occupancy and rental growth in the company’s industrial portfolio, contributing to continuing positive performance in the company’s same store group of properties.

Liberty also updated information on activity to date during the fourth quarter of 2015.

  • Fourth quarter development starts (wholly-owned) comprise five projects for $108 million. The projects total 669,000 square feet and are 49% pre-leased.
  • Fourth quarter acquisitions are expected to total $11 million and consist of one vacant 198,000 square foot distribution building in Shakopee, Minnesota.
  • Fourth quarter dispositions to date total $300.3 million of suburban office and non-core industrial properties totaling 4.1 million square feet.
  • Liberty announced it has leased a 345,000 square foot office building in Eden Prairie, MN, representing the company’s largest single office vacancy.

Commenting on activity going into 2016, Mr. Hankowsky said, “We are fortunate to be operating in a very strong environment, particularly for industrial real estate. We have experienced tremendous activity in nearly every industrial market during the fourth quarter, and we are also seeing remarkable interest by high-quality companies seeking to locate at The Navy Yard in Philadelphia, Rio Salado in Tempe, and our planned Camden Waterfront office project. This activity gives us a great deal of confidence in 2016.”

A reconciliation of projected FFO to projected GAAP net income for both 2015 and 2016 is below (all amounts projected):

2015 Range 2016 Range
LowHigh LowHigh
Net income per share$1.58 $1.61 $1.25 $1.50
Depreciation and amortization of
unconsolidated joint ventures 0.08 0.09 0.06 0.08
Depreciation and amortization 1.47 1.50 1.35 1.38
Gain on property dispositions (0.46) (0.50) (0.30) (0.40)
Noncontrolling interest share of addbacks (0.01) (0.01) (0.01) (0.01)
Funds from operations per share$2.66 $2.69 $2.35 $2.55


About Liberty Property Trust

Liberty Property Trust (NYSE:LPT) is a leader in commercial real estate, serving customers in the United States and United Kingdom through the development, acquisition, ownership and management of superior office and industrial properties. Liberty's 104 million square foot portfolio includes more than 689 properties providing office, distribution and light manufacturing facilities to 1,650 tenants.

Liberty will host a conference call during which management will discuss these projections and underlying assumptions, on Tuesday, December 15, 2015, at 10:00 a.m. Eastern Time. To access the conference call, please dial 855-277-7530. The passcode needed for access is 85102265. A replay of the call will be available until January 15, 2016, by dialing 1-855-859-2056 using the same passcode as above. The call can also be accessed in the Investors section of Liberty’s web site at www.libertyproperty.com.

The statements in this release contain statements that are or will be forward-looking, such as statements relating to, among others, business and financial results, our future development, acquisition and disposition activities. These forward-looking statements generally are accompanied by words such as “believes,” “anticipates,” “expects,” “estimates,” “should,” “seeks,” “intends,” “proposed,” “planned,” “ are confident,” “outlook” and “goal” or similar expressions. Although the company believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, the company can give no assurance that its expectations will be achieved. As forward-looking statements, these statements involve important risks, uncertainties and other factors that could cause actual results to differ materially from the expected results and, accordingly, such results may differ from those expressed in any forward-looking statements made by, or on behalf of the company. The company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events. These risks, uncertainties and other factors include, without limitation, uncertainties affecting real estate business generally (such as entry into new leases, renewals of leases and dependence on tenants' business operations), risks relating to the integration of the operations of entities that we have acquired or may acquire, risks relating to financing arrangements and sales of securities, possible environmental liabilities, risks relating to leverage and debt service (including availability of financing terms acceptable to the company and sensitivity of the company's operations and financing arrangements to fluctuations in interest rates), dependence on the primary markets in which the company's properties are located, the existence of complex regulations relating to status as a REIT and the adverse consequences of the failure to qualify as a REIT, risks relating to litigation, and the potential adverse impact of market interest rates on the market price for the company's securities.


Inquiries: Jeanne Leonard, Liberty Property Trust, 610.648.1704

Source:Liberty Property Trust