Liberty (LPT) Sells Suburban Office Assets In Philadelphia

Liberty Property Trust (NYSE:LPT) recently announced the sale of suburban Philadelphia office properties for $173.1 million. With this transaction, the company has completed $742.4 million in office sales in the current year.

The properties sold off this time, included 50 Morehall Road, 117,000 square feet; 60 Morehall Road, 117,000 square feet; 425 Old Morehall Road, 201,658 square feet; and 1001 Cedar Hollow Road, 133,000 square feet.

Notably, Liberty Property has been focused on divesting its non-core properties, and using the dry powder for gaining the preferred properties across the United States. Specifically, the company is aimed at growth of its industrial platform in top tier markets and financing the same through the disposition of office assets. During the third-quarter earnings release, the company also increased its projected disposition activity to $800-$950 million from $700-$900 million guided earlier, with the majority being suburban office properties.

On the other hand, the company is aimed at enhancing its national industrial platform through acquisitions of industrial properties in key markets. During the September-end period, Liberty acquired two industrial buildings in New Jersey and one industrial building in Texas, aggregating 1.3 million square feet of space, for $101.1 million. These measures are likely to help the company achieve a favorable portfolio mix.

This expansion of the industrial real estate portfolio is a strategic fit for Liberty Property. This is because high-consumer spending, e-commerce boom, as well as healthy manufacturing environment amid recovering economy and job market are spurring demand for the real estate category.

In addition to Liberty Property, other REITs, including Prologis Inc. (NYSE:PLD) , Duke Realty (NYSE:DRE) and Terreno Realty Corp. (NYSE:TRNO) , are expected to benefit from the same.

Nevertheless, there is rising supply of industrial real estate space and this will partly dampen the robust growth momentum in rents. Also, rate hike adds to the REITs’ woes.

Liberty Property currently has a Zacks Rank #3 (Hold). The company’s shares have appreciated 9.5% in the past month compared with its industry’s rally of 5.9%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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