Back to top

Analyst Blog

Zacks Equity Research

Liberty Property Beats Estimates

DRE

 ZacksTrade Now

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

Liberty Property Trust reported first quarter 2011 FFO (fund from operations) of 64 cents per share at par with the year-earlier quarter. Fund from operations, 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. The reported earnings marginally beat the Zacks Consensus Estimate by a penny. Recurring FFO for the quarter stood at 62 cents per share.

At quarter-end, the in-service portfolio of Liberty Property spanning 79.6 million square feet had an occupancy of 88.7%, unchanged from the previous quarter. During the quarter, Liberty Property completed lease transactions totaling 3.4 million square feet of space.

Operating income from the same-store properties increased 3.4% (cash basis) and 1.4% (straight-line basis) year over year. Same-store occupancy during the quarter was 89.9% compared with 90.1% at the end of the previous quarter.

The company continues its portfolio repositioning program as it focuses on higher growth markets with better job and rent growth prospects. During the quarter, Liberty Property sold one property spanning 30,000 square feet for a total of $3.6 million. The company did not acquire any properties during the quarter.

Liberty Property has recently started construction work on two industrial flex buildings in The Navy Yard Commerce Center – a business park in Philadelphia. The project (22% pre-leased) will span across 103,000 square feet of space.

Liberty Property is also mulling the development of a third building at the site when leasing of the first two is on full swing. This will expand the total capacity of the project by an additional 205,170 square feet of space. The entire cost of development is anticipated to be approximately $95.7 million and is expected to yield 10.5% upon completion. The investment is part of the long-term strategy of the company to capitalize on the significant growth potential of The Philadelphia Navy Yard.

During the quarter, Liberty Property repaid 7.25% senior notes totaling $246.5 million. At quarter-end, the company had cash and cash equivalents of $32.7 million. 

For fiscal 2011, Liberty Property expects FFO in the range of $2.50- $2.65. Liberty Property expects the real estate markets to improve gradually and expects its development starts to be in the range of $200-$300 million in fiscal 2011. The company expects its property sales guidance to be in the range of $300-$400 million and acquisitions to be in the range of $100-$200 million for fiscal 2011.

Liberty Property currently retains a Zacks #4 Rank, which translates into a short-term Sell rating. We are also maintaining our long-term Neutral recommendation on the stock. One of its competitors, Duke Realty Corp (DRE - Analyst Report) currently retains a Zacks #4 Rank, which translates into a short-term Sell rating.

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
KNIGHTSBRIDG VLCCF 13.52 +7.81%
CLAYTON WILL CWEI 135.74 +3.98%
MOTORCAR PAR MPAA 29.00 +3.35%
CANADIAN SOL CSIQ 29.86 +2.23%
SHENANDOAH T SHEN 29.81 +1.98%