MALVERN, Pa., Oct. 24 /PRNewswire-FirstCall/ -- Liberty Property Trust (NYSE: LRY - News ) reported that net income per common share (diluted) was $.58 per share for the quarter ended September 30, 2005, compared to $.46 per share (diluted) for the quarter ended September 30, 2004. For the nine-month period ending September 30, 2005, net income per common share (diluted) was $1.61, compared to $1.35 for the same period in 2004.
Funds from operations available to common shareholders (diluted) ("FFO") for the third quarter of 2005 was $.78 per share, compared to $.81 per share for the third quarter of 2004. FFO per share for the nine-month period ended September 30, 2005 was $2.42 per share compared to $2.43 per share for the same period last year. A reconciliation of GAAP net income to FFO is included in the financial tables accompanying this press release.
Operating results for the third quarter of 2005 include lease termination fees of $1.8 million, or approximately $.02 per share diluted FFO.
"From an operating perspective, we are very pleased with our performance in the third quarter," commented Bill Hankowsky, chairman and chief executive officer. "Our teams continue to do an extraordinary amount of leasing, our development pipeline is growing, and we are taking advantage of the investment market's demand for product by recycling capital through asset sales. This activity has been offset during 2005 by the lack of occupancy gains, due primarily to corporate downsizing and restructuring in our tenant base, and lease termination actions. We believe this will result in full year 2005 funds from operations of $3.21 to $3.22. Looking forward, we do not see enough rent growth in 2006 to significantly impact earnings. Therefore, we believe the most likely scenario for 2006 funds from operations is a range from $3.20 to $3.30."
Development: During the third quarter, Liberty brought into service three development properties totaling 257,000 square feet. The properties were 95.6 percent leased at quarter-end. The current yield on Liberty's $19.1 million investment is 8.9 percent.
-- 5201 Gate Parkway, a 150,000-square-foot office building in Jacksonville, Florida, 100 percent leased to PHH Corporation; -- 1646 Rankin Road, an 80,000-square-foot flex building in Houston, Texas; -- 777 Township Line Road, a 110,000-square-foot office building in Yardley, Pennsylvania; -- 600 Industrial Drive, an 800,000-square-foot distribution building in Harrisburg, Pennsylvania; -- 8400 Industrial Boulevard, a 726,000-square-foot distribution building in Allentown, Pennsylvania.
At September 30, Liberty had 6.1 million square feet of space under development, representing a total investment of $858.7 million. These properties were 54.9 percent pre-leased as of the end of the quarter.
Acquisitions: During the third quarter, Liberty acquired 275 Commerce Drive and 1250 Virginia Drive in Fort Washington, Pennsylvania. The two office properties contain 92,000 square feet, are 59.9 percent leased, and have a projected stabilized yield of 9.7 percent on the $12.4 million investment.
Dispositions: During the third quarter, Liberty sold eight properties containing 896,000 square feet, and 4.9 acres of land, for $58.9 million.
Leasing: At September 30, 2005, Liberty's in-service portfolio of 62.6 million square feet was 91.9 percent occupied, compared to 89.9 percent occupied at June 30, 2005. During the quarter, Liberty completed lease transactions totaling more than six million square feet of space.
Same Store Performance: Property level operating income for same store properties decreased by 2.2 percent on a cash basis and by 3.2 percent on a straight line basis for the third quarter of 2005 compared to the quarter ended September 30, 2004.
During the quarter, Liberty raised $6.0 million through a private placement of 6.65 percent Series F Cumulative Redeemable Preferred Units. The proceeds from this offering were used to pay down the outstanding borrowings under the company's unsecured credit facility and for general corporate purposes.
During the quarter, Liberty raised the quarterly dividend by 0.8 percent from $0.61 per share to $0.615 per share.
Liberty Property Trust (NYSE: LRY - News ) is a leader in commercial real estate, serving customers in the United States and United Kingdom, through the development, acquisition, ownership and management of superior office and industrial properties. Liberty's 63-million-square-foot portfolio includes more than 700 properties which provide office, distribution and light manufacturing facilities to 2,100 tenants.
Additional information about the company, including Liberty's Quarterly Supplemental Package with detailed financial information is available in the Investor section of the company's web site at http://www.libertyproperty.com . The third quarter supplemental package will be available online the evening of October 24, 2005. If you are unable to access the web site, a copy of the supplemental package may be obtained by contacting Liberty by phone at 610-648-1708, or by e-mail to eshoemaker@libertyproperty.com .
Liberty will host a conference call during which management will discuss third quarter results, on Tuesday, October 25, 2005, at 2:00 p.m. eastern time. To access the conference call in the United States or Canada, please dial 1-888-870-2815. For international access, dial 706-643-7691. No password or code is needed. A replay of the call will be available by dialing 1-800-642-1687 for US/Canada participants or 706-645-9291 for international participants. A passcode is needed for the replay: 9569924. The call can also be accessed live via the Internet on the Investor Relations page of Liberty's web site at http://www.libertyproperty.com for one week following the call.
The statements contained in this press release may include forward-looking statements within the meaning of the federal securities law. Although Liberty believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be achieved. As forward-looking statements, these statements involve risks, uncertainties and other factors that could cause actual results to differ materially from the expected results. These factors include, without limitation, the uncertainties affecting real estate businesses generally (such as entry into new leases, renewals of leases and dependence on tenants' business operations), risks relating to our ability to maintain and increase property occupancy and rental rates, the financial condition of tenants, the uncertainties of real estate development and construction activity, the costs and availability of financing, the effects of local economic and market conditions, regulatory changes, potential liability relative to environmental matters and other risks and uncertainties detailed in the company's filings with the Securities and Exchange Commission. The company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.
The Company believes that the calculation of Funds from operations is helpful to investors and management as it is a measure of the Company's operating performance that excludes depreciation and amortization and gains and losses from property dispositions. As a result, year over year comparison of Funds from operations reflects the impact on operations from trends in occupancy rates, rental rates, operating costs, development activities, general and administrative expenses, and interest costs, providing perspective not immediately apparent from net income. In addition, management believes that Funds from operations provides useful information to the investment community about the Company's financial performance when compared to other REIT's since Funds from operations is generally recognized as the standard for reporting the operating performance of a REIT. Funds from operations available to common shareholders is defined by NAREIT as net income (computed in accordance with generally accepted accounting principles ("GAAP")), excluding gains (or losses) from sales of property, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Funds from operations available to common shareholders does not represent net income or cash flows from operations as defined by GAAP and does not necessarily indicate that cash flows will be sufficient to fund cash needs. It should not be considered as an alternative to net income as an indicator of the Company's operating performance or to cash flows as a measure of liquidity. Funds from operations available to common shareholders also does not represent cash flows generated from operating, investing or financing activities as defined by GAAP.
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