Friday, December 21, 2018

Liberty Property Trust Trades Suburban Office Assets, Acquires More Industrials

by Steve Lubetkin,
Continuing its planned pivot to a singular focus on industrial properties, Liberty Property Trust says it disposed of suburban office properties near Philadelphia, while acquiring industrial assets in Southern California and financing of an industrial portfolio in the United Kingdom.

“We made a decision a number of years ago to become a major industrial player nationally,” Liberty’s CEO William Hankowsky said earlier this month at the Urban Land Institute of Philadelphia’s Real Estate Outlook meeting. “We really didn’t have a footprint to be an effective national operator, so we have worked over the last several years to increase that both that scale of that platform and the geography of that platform.”
Liberty sold five office properties totaling 335,866 square feet in Malvern, PA for $45.8 million. The properties consist of: 100 Chesterfield Parkway, 600 Chesterfield Parkway, 700 Chesterfield Parkway, 14 Lee Boulevard, and 12-16 Great Valley Parkway. Liberty executed $795.2 million in sales in 2018.

Liberty purchased two industrial properties totaling 447,570 square feet in Southern California for $60.2 million. The properties consist of 15025 Proctor Avenue, a fully-occupied, 128,581 square foot property in City of Industry, CA, and 520 E. Orange Show Road in San Bernardino, a 318,989 square foot development property acquired vacant.

Liberty’s in-service Southern California portfolio is 100% occupied. Liberty purchased $496.7 million in industrial properties in 2018.
“As we close out the year, Liberty has successfully executed on our strategy to reallocate capital from office to our growing industrial business,” says Mike Hagan, Liberty’s chief investment officer. “We have also secured permanent financing at very favorable terms on our UK industrial portfolio.”

In conjunction with Liberty’s previously announced £111 million acquisition of a 1.1 million square foot industrial portfolio in October, Liberty has financed a portfolio of 13 industrial properties located in the UK with a £129.5 million, 10-year, interest-only loan at 2.64%. This loan was used to repay short-term borrowings used to fund seven of the 13 properties acquired in October, as well as portions of Liberty’s existing UK industrial portfolio.

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