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Liberty Property Vends Suburban Offices

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Liberty Property Trust LPT announced that it has sold Suburban Philadelphia Office Properties, spanning across 779,190 square feet, for $106.9 million. The deal took place in two separate transactions.

Liberty Property, in the first transaction, sold properties totaling 186,248 square feet. The properties sold in Malvern, PA for $14.9 million included 9, 15-25 and 11 Great Valley Parkway.

In the second transaction, the company sold 592,942 square feet of office space for $92 million. The properties included in this transaction were2100 and 2201 Renaissance Boulevard in King of Prussia, PA, 440 and 460 E Swedesford Road in Wayne, PA, 45 Liberty Boulevard and 300, 400 and 500 Chesterfield Parkway in Malvern, PA.

Further, Liberty Property vended off an industrial building for $7 million, spanning across 80,000 square feet and situated at 301 Hill Carter Parkway in Richmond, VA.

Liberty Property is shifting its focus towards industrial properties due to favorable demand-supply conditions. The company plans to fund investments in industrial assets through proceeds from dispositions of office properties.
Its industrial portfolio, spanning 94.2 million square feet of area, enjoyed occupancy of 97% at the end of fourth-quarter 2017, marking an expansion of 70 basis points from the prior quarter. Moreover, industrial rents escalated 14.8% on renewal and replacement leases signed during the quarter.

Furthermore, the company plans to dispose of its remaining suburban office properties in 2018. In numbers, it expects dispositions of at least $600-$800 million this year with the majority being sub-urban office properties. Out of which, till date, its dispositions of 2018 totaled $190.8 million.

On the other hand, it is aimed at fortifying its national industrial platform through acquisitions of $400-$600 million of industrial properties in key markets and it commences $500-$600 million of development projects as well. These measures are anticipated to help the company achieve a favorable portfolio mix.

Shares of LPT have underperformed its industry in the past three months. During this time, the stock declined 6.5% compared with industry’s decline of 5.7%.

 

Liberty Property currently has a Zacks Rank #3 (Hold).

Stocks Worth a Look

A few better-ranked stocks from the same industry include Arbor Realty Trust ABR, Extra Space Storage Inc. EXR and Sotherly Hotels Inc. SOHO. All three stocks carry a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Arbor Realty Trust’s Zacks Consensus Estimate for 2018 FFO per share has been revised 2.3% upward to 90 cents over the past month. Its share price rose 10.2% in six months’ time.

Extra Space Storage’s FFO per share estimates for the current year moved up 2% to $4.57 in a month’s time. Its shares gained 8.5% over the past six months.

Sotherly Hotels’ FFO per share estimates for 2018 have been revised approximately 1.9% upward to $1.05 over the past month. The stock gained 5.6% during the past six months.

Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.

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