Liberty Property Trust LPT revealed the disposition of its entire portfolio in the Horsham, PA submarket, which comprised 41 properties and 20 acres of land, to privately held Workspace Property Trust for a total of $245.3 million.
Spanning 2.4 million square feet of space in total, these properties were 84.3% leased at closing. The majority of them were office properties with the rest belonging to the flex category.
Amid growing demand for premium quality industrial space, Liberty Property continues to boost the quality of its portfolio through repositioning its business with more industrial properties. To facilitate such moves, the company has been divesting its non-core properties, particularly its suburban office properties, and investing these proceeds for strategic acquisitions across the U.S.
In fact, during its third-quarter earnings release, the company projected 2015 dispositions in the range of $600–$700 million as against the prior guidance of $525-$625 million. Including the Horsham portfolio sale, the company has already made dispositions worth as much as $536 million so far in 2015.
Liberty Property reported an earnings surprise of 3.08% in third-quarter 2015, driven by growth in rent and net operating income (“NOI”). The company has also raised its guidance for 2015.
Although efforts like strategic dispositions and acquisitions are expected to enhance the company’s overall portfolio quality in the long term, an adverse near-term impact on earnings from dispositions cannot be bypassed.
Liberty Property currently has a Zacks Rank #3 (Hold). Investors interested in the REIT sector may consider stocks like Cousins Properties Incorporated CUZ, Highwoods Properties Inc. HIW and STAG Industrial, Inc. STAG. All these stocks carry a Zacks Rank #2 (Buy).
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