Liberty Property Trust 2Q FFO 13.6 Percent Higher

by Steve Lubetkin, Globest.com
Liberty Property Trust says funds from operations available to common shareholders for the second quarter of 2015 rose 13.6 percent, to $0.67 per share, from $0.59 per share for the second quarter of 2014. FFO per share for the six months ended June 30, 2015 was $1.37, compared to $1.17 for the same period in 2014.

Net income per common share (diluted) was up 20 percent, to $0.24 per share for the quarter ended June 30, 2015, vs. $0.20 per share for the quarter ended June 30, 2014. Net income for the six months ended June 30, 2015 was $0.45, compared to $0.69 for the same period in 2014. Net income for the 2015 six month period reflects gain on sale of $0.02 per share, compared with $0.33 per share for the same period in 2014.

“We are very pleased with the continued strength of the core portfolio, evidenced by rent and occupancy growth in our industrial and class A office product,” says Bill Hankowsky, chairman and chief executive officer. “We also advanced our strategic dispositions and continue to see excellent development opportunities. Market operating fundamentals should bode well for the remainder of the year.”

At June 30, 2015, Liberty says its in-service portfolio of 105 million square feet was 93.8 percent occupied, compared to 93.2 percent at the end of the first quarter of 2015. During the quarter, Liberty completed lease transactions totaling 8.7 million square feet of space.

Property level operating income for same-store properties increased by 2.7 percent on a cash basis and by 3.2 percent on a straight line basis for the second quarter of 2015 compared to the same quarter in 2014.

In the second quarter, Liberty opened four development properties for a total investment of $87.7 million. The properties contain 1.3 million square feet of leasable space and were 90.8 percent occupied as of the end of the quarter. The yield on these properties at June 30, 2015 was 7.5 percent.

Liberty began development of four properties totaling 491,100 square feet of leasable space at a projected investment of $33.8 million. The properties include:

1951, 1953 and 1957 TW Alexander Drive, three distribution buildings totaling 321,000 square feet at Liberty Ridge in Durham, NC.
5032 Sirona Drive, a 170,100 square foot distribution building at Shopton Ridge in Charlotte, NC.
During the quarter, a joint venture in which the company holds a 25 percent interest began construction on property containing 210,600 square feet at 400 Arlington Boulevard in Logan, NJ, for a projected investment of $14.4 million.

Liberty acquired one operating property for $36.7 million. The property is a 410,000 square foot distribution building in Fontana, CA. It was 100 percent leased as of June 30 and is currently vacant with a projected stabilized yield of 5.5 percent.

During the quarter, Liberty sold 23 properties containing 1.4 million square feet of leasable space and 3.1 acres of land for $116.1 million. These properties were 89.8 percent leased at the time of the sale. In addition, a joint venture in which Liberty holds a 25 percent interest sold one vacant property containing 198,000 square feet for $8.5 million.

Liberty says it expects to report 2015 FFO per share in the range of $2.60 - $2.65, slightly higher than previous guidance of $2.55-$2.65 per share.
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