Liberty Property Trust (LPT) disclosed that it has inked a lease agreement with Green Light Direct Services at Liberty Tolleson Center in Arizona. With this deal, the 200,000 square foot property is now fully occupied. Also, Liberty Property has leased over 500,000 square feet across the Arizona region since Jan 2014.
As a matter of fact, Liberty Tolleson Center is an industrial property located on 8601 W. Washington Street. Green Light Direct Services will relocate to this new location in October, this year. Jones Lang LaSalle Incorporated (JLL) represented Liberty Property in the transaction, while Green Light Direct Services was represented by CD Commercial Advisors.
We are encouraged by this lease deal as it depicts solid demand for Liberty Property’s assets. The fundamentals of the U.S. industrial market are improving and the company is aiming at capitalizing on this trend. Particularly, amid a larger customer base and rise in e-Commerce application and supply chain consolidation, there is an increasing demand for high-quality facilities in premier locations across Arizona.
However, the persisting weakness in the company’s core office markets continues to impact its business. Consequently, last month, Liberty Property’s second-quarter 2014 funds from operations (:FFO) of 59 cents per share missed the Zacks Consensus Estimate by 2 cents and came below the prior-year quarter figure by 7 cents.
Results reflect the impact of the company’s strategic shift towards the industrial portfolio and consecutive curtailment of its office properties. Also, the company cut down its full-year 2014 FFO per share guidance.
Consequently, Liberty Property currently carries a Zacks Rank #4 (Sell). Investors interested in the REIT industry may also consider stocks like W. P. Carey Inc. (WPC) and Government Properties Income Trust (GOV). Both stocks carry a Zacks Rank #1 (Strong Buy).
Note: FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.