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Liberty Property Sheds Suburban Office and Flex Assets


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Liberty Property Trust (LPT - Analyst Report) has finally closed the sale of 108 properties in five markets for $969 million to Workspace Property Trust in concert with its strategic partner, Safanad Limited. The move comes as part of the company’s strategy of shedding its non-core suburban properties. As a result, Liberty’s share of total dispositions reached $1.2 billion for 2016 to date, a target that the company had earlier declared.

These properties include 14 buildings in Arizona, 11 in Florida (South), 34 in Florida (Tampa), 19 in Minnesota and 30 in Pennsylvania. Together, these properties comprise approximately 7.6 million square feet, along with 26.7 acres of land. Majority of them were suburban offices and flex non-core assets.

As a matter of fact, Liberty Property has been concentrating on divesting its non-core assets and using the proceeds for gaining preferred properties across the U.S. In fact, the company is making concerted efforts in building a premium portfolio of industrial properties due to favorable demand supply conditions. Therefore, it remains well poised with the disposition proceeds to grow its development pipeline and fund potential acquisitions as well.

Going forward, Liberty Property’s solid portfolio of metro-office, multi-tenant industrial and flex properties, divestiture of non-core assets, decent balance sheet and rising demand for quality industrial spaces are expected to drive its growth engine. However, earnings dilutive effects of divestiture, operational risks associated with huge construction pipeline and any rise in interest rates remain as concerns.

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

Investors can also consider some better-ranked stocks in the REIT industry like American Tower Corp. (AMT - Analyst Report) , CorEnergy Infrastructure Trust, Inc. (CORR - Snapshot Report) and InfraREIT, Inc. (HIFR - Snapshot Report) , all sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

American Tower is a steady performer, having beaten the Zacks Consensus Estimate over all the trailing four quarters, with an average surprise of 6.16%. CorEnergy Infrastructure has experienced 3.9% upward revision in full-year 2016 estimates in the past two months. Also, InfraREIT has a long-term expected growth rate of 10% against the industry average of 5.8%.

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