Mixed 3Q for Liberty Property
by Zacks Equity ResearchOctober 25, 2012 | Comments : 0 Recommended this article: (0)
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Liberty Property Trust (LRY), a real estate investment trust (REIT), reported third quarter 2012 FFO (funds from operations) of $77.6 million or 64 cents per share compared with $ 77.1 million or 64 cents in the year-earlier quarter. Reported FFO in the quarter beat the Zacks Consensus Estimate by a penny.
Total revenues for third quarter 2012 stood at $171.7 million compared to $165.2 million in the year-ago quarter. Total revenues for the reported quarter were in-line with the Zacks Consensus Estimate.
At the end of the reported quarter, the in-service portfolio of Liberty Property, spanning 78.0 million square feet, had occupancy of 91.8% compared with 90.7% in the previous quarter. Liberty Property witnessed strong leasing activities in the quarter with about 3.8 million square feet of leased space. Operating income from same-store properties increased 0.3% on a cash basis and slipped 0.3% on a straight line basis year over year.
Liberty Property witnessed continuous demand for premium quality industrial space from large corporate users and build-to-suit opportunities for both industrial and office users. During the reported quarter, Liberty Property acquired a distribution building (18% leased on purchase) spanning 232,000 square feet of leasable space in Phoenix, Arizona for $6.4 million. Additionally, Liberty Property sold 49 acres of land for $2.7 million.
During third quarter 2012, Liberty Property began development of three properties, spanning 530,000 square feet, for an estimated investment of $55.5 million. Also, the company brought into service two development properties spanning 282,000 square feet for $15.7 million.
During the reported quarter, Liberty property repaid 6.375% Senior Notes totaling $230.1 million due August 2012. Liberty Property expects FFO for the fourth quarter of 2012 to be in the range of $0.62 - $0.64 per share. For full year 2012, FFO is expected in the range of $2.57 - $2.59 per share. At the end of third quarter 2012, the company had $34.1 million in cash and cash equivalents.
Liberty Property currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. We are also maintaining our long-term Neutral recommendation on the stock. One of its competitors, Duke Realty Corp. (DRE) carries a Zacks #4 Rank, which translates into a short-term Sell rating.
Note: Funds from operations, a widely used metric to gauge the performance of REITs, are obtained after adding depreciation and amortization and other non-cash expenses to net income.
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