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Liberty Property Breaks Ground at Legacy at Fallbrook

Zacks Equity Research

Liberty Property Trust (LRY) disclosed the groundbreaking of a Class A office building at its development project – Legacy at Fallbrook – at 10720 West Sam Houston Parkway North. This comes as part of the company’s strategy to expand its Houston portfolio.

The five-story office building, spanning 208,000 square foot, will be open for lease in the first quarter of 2015. The property will be well equipped with basic and modern amenities as well as feature a connected structured parking garage. Phase I of Legacy at Fallbrook project is devised at par with the LEED (Leadership in Energy and Environmental Design) Silver certification specifications.

Notably, the development project, Legacy at Fallbrook is situated on a 20-acre site in Northwest Houston. The project will have two more office buildings, which also will be designed to win a LEED Silver label.

Liberty Property is known for its premium green office and industrial properties in the U.S. Nationwide, this real estate investment trust (:REIT) has constructed over 15 million square feet of LEED space in about 70 assets and certified 112 Energy Star properties.

As a matter of fact, Liberty Property is boosting its portfolio base through the repositioning program. Last month, the company collaborated with Comcast Corporation (CMCSA) to build a 59-story, 1,121-foot tower in Philadelphia. This tower – Comcast Innovation and Technology Center – will be constructed adjacent to the existing Comcast Center and is expected to be the nation’s tallest building outside New York and Chicago.

Going forward, we believe that the repositioning efforts by Liberty through strategic acquisitions, developments and dispositions would help the company ride on the growth trajectory. Earlier this month, Liberty Property reported fourth-quarter 2013 funds from operations (:FFO) of 63 cents per share, in line with the Zacks Consensus Estimate as well as the prior-year quarter figure. The decent results were attributable to year-over-year revenue gains, strong leasing and portfolio restructuring activity.

Liberty Property currently carries a Zacks Rank #2 (Buy). Some other stocks worth considering in the REIT sector include Sabra Health Care REIT Inc (SBRA) and Public Storage (PSA). Sabra Health Care carries a Zacks Rank #1 (Buy), while Public Storage has the same rank as Liberty Property.

Note: Funds from operations, a widely used metric to gauge the performance of REITs, are obtained after adding depreciation and amortization and other non-cash expenses to net income.

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