Liberty Property (LPT) Sells Medical Office Tower For $99.25M
Zacks Investment Research | Jul 04, 2019 07:41AM ET
Liberty Property Trust (NYSE:LPT) recently announced the sale of a medical office building, 800 Walnut Street in Philadelphia, PA, for $99.25 million. The sale price is notably more than double what it cost to build the property six years ago.
Specifically, the 12-story building, spanning 153,242 square feet of space, was developed in 2013 for an investment of $48.5 million. This property was leased by the University of Pennsylvania Health System for medical office use.
The company used part of the sale proceeds to repay $35.9 million of mortgage debt that encumbered the property. Hence, it will record a loss of $7.6 million, or five cents per diluted share, for early extinguishment of debt, in second-quarter 2019. Notably, the secured loan carried an interest rate of 4.84% and was slated to mature in 2033.
This sale is appropriate for Liberty Property that has been aiming at divesting its non-core properties and using the dry powder to invest in the highly profitable business as an industrial landlord across the United States. Specifically, the company is aiming for growth of its industrial platform in top-tier markets and financing that through disposition of office assets.
In fact, continuing its strategic disposition program, the company sold $85 million of office properties in the March-end quarter. Per management, the company may exit its wholly-owned office portfolio by the end of this year and exceed the asset sales guidance of $600-$650 million. These measures are likely to help the company achieve a favorable portfolio mix.
Shares of this Zacks Rank #3 (Hold) company have gained 4.8% as compared with the Zacks Investment Research
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