Liberty Property Trust LPT has reaped proceeds of $110.3 million by selling its entire office and flex portfolio in the Hampton Roads area to Lingerfelt CommonWealth Partners. The portfolio consists of 22 properties and spans a total of 1.3 million square feet of space as well as 3.099 acres of land. It also enjoyed leasing of 89.1% at closing. These properties are specifically located at Chesapeake, Hampton and Virginia Beach.
We believe the move is in sync with the company’s growth strategies. This is because Liberty Property has been planning to divest its non-core properties and use the dry powder for gaining preferred assets across the U.S. The company seems to focus on markets that have strong demographic and economic fundamentals.
Amid growing demand for premium quality industrial space, Liberty Property continues to boost the quality of its portfolio through repositioning with more industrial properties. Amid the booming U.S. industrial market and growing demand for industrial properties, we believe these initiatives are poised to strengthen the company’s portfolio in upscale locations, going forward.
In the last reported quarter, i.e., first-quarter 2015, Liberty Property reported funds from operations (“FFO”) of 70 cents per share, which surpassed the Zacks Consensus Estimate by 8 cents. Quarterly results reflected growth in rent and occupancy, strong leasing activities and development deliveries, as well as continued strength in the industrial and Class A office markets.
While we believe the strong U.S. industrial market positions Liberty Property well for future growth, an anticipated rise in interest rates in the medium term remains a concern.
Liberty Property currently carries a Zacks Rank #3 (Hold). Investors interested in the REIT industry may consider stocks like First Industrial Realty Trust Inc. FR, Kilroy Realty Corp. KRC and Prologis, Inc. PLD. All these stocks hold a Zacks Rank #2 (Buy).
Note: FFO, 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.
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