MALVERN, Pa., Oct 20, 2008 /PRNewswire-FirstCall via COMTEX/ ----Liberty Property Trust (NYSE: LRY) reported that net income per common share (diluted) was $0.41 per share for the quarter ended September 30, 2008 compared to $0.41 per share for the quarter ended September 30, 2007. For the nine-month period ended September 30, 2008, net income per common share (diluted) was $1.08, compared to $1.41 per share for the same period in 2007. The primary difference between net income for the first nine months of 2007 and 2008 is attributable to a difference in gains on sales of property.

Funds from operations available to common shareholders (diluted) ("FFO") for the third quarter of 2008 was $0.80 per share, compared to $0.80 per share for the third quarter of 2007. FFO per share for the nine month period ended September 30, 2008 was $2.41 per share, compared to $2.39 per share for the same period in 2007. A reconciliation of GAAP net income to FFO is included in the financial tables accompanying this press release.

"Office and industrial conditions continued to hold up this quarter in a very unusual economic and financial environment," said Bill Hankowsky, chairman and chief executive officer. "In spite of the current challenged economic scene, our multi-product, multi-market, multi-tenant portfolio and our capital structure are appropriately positioned for relative outperformance in this difficult market."

Portfolio Performance

Leasing: At September 30, 2008 Liberty's in-service portfolio of 75.9 million square feet was 92.0% occupied, compared to 92.5% at the end of the second quarter. During the third quarter, Liberty completed lease transactions totaling 4.0 million square feet of space.

Same Store Performance: Property level operating income for same store properties increased by 0.1% on a cash basis and decreased by 1.2% on a straight line basis for the third quarter of 2008 compared to the same quarter in 2007, and remained flat on a cash basis and decreased by 0.9% on a straight line basis for the nine months ended September 30th compared to the same period in 2007.

Real Estate Investments

Development: During the third quarter, Liberty brought into service six wholly-owned development properties totaling one million square feet for a total investment of $62.0 million. These properties are 83.6% leased at a current yield of 7.1% and a projected stabilized yield of 8.7%. A joint venture in which Liberty holds a 50% interest brought into service two development properties for a total investment of $19.1 million. These properties, totaling 296,000 square feet, are located in Orlando, Florida, and were 78.2% leased as of September 30.

During the third quarter, Liberty began development of one property for an expected total investment of $46.3 million. This 211,000 square foot office building is located in Orlando, and is 50.8% pre-leased. In addition, a joint venture in which the company holds a 25% interest began construction of a 464,000 square foot industrial building in Aurora, IL.

As of September 30, 2008, Liberty had 5.0 million square feet of wholly-owned and joint venture properties under development. This activity represents a total projected investment of $599.8 million, with an expected yield of 8.0%. The properties were 21.4% leased at September 30.

Acquisitions: Liberty acquired a 107,000 square foot office property in Sunrise, FL during the quarter for $17.0 million. The property is 100% leased, with a current yield of 10.9%.

Dispositions: During the third quarter Liberty sold six operating properties, which contained 254,000 square feet of leasable space for $31.1 million.

Subsequent Events

On October 8, Liberty completed a public offering of 4,750,000 common shares, generating net proceeds to the company of $149.5 million. The proceeds from this offering were used to repay borrowings under the Company's unsecured credit facility and for general corporate purposes.

Earnings Outlook

Liberty expects to report funds from operations for 2008 in the range of $3.14-$3.16 per share, and for 2009 in the range of $3.00-$3.20 per share. A reconciliation of FFO to GAAP net income for both 2008 and 2009 is below:

   2008 Range                2009 Range
   Low          High         Low        High
   Projected net income
   per share                  $1.47         $1.49       $1.24       $1.44
   Depreciation and
   amortization of
   unconsolidated
   joint ventures              0.18          0.18        0.16        0.18
   Depreciation and
   amortization                1.85          1.89        1.78        1.81
   Gain on property
   dispositions               (0.29)        (0.32)      (0.10)      (0.15)
   Minority interest
   share of addbacks          (0.07)        (0.08)      (0.08)      (0.08)
   
   Projected funds from
   operations per share       $3.14         $3.16       $3.00       $3.20
   
   
   

Commenting on this guidance, "The current economic pressures coupled with the credit drought yield a very unclear picture for 2009," said Bill Hankowsky. "Therefore we are basing our forward guidance on a set of assumptions that project the current difficult economic environment to prevail throughout 2009."

About the Company

Liberty Property Trust (NYSE: LRY) 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 76 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 Investors section of the Company's web site at www.libertyproperty.com. If you are unable to access the web site, a copy of the supplemental package may be obtained by contacting Liberty by phone at 610-648-1704, or by e-mail to jleonard@libertyproperty.com.

Liberty will host a conference call during which management will discuss third quarter results, on Tuesday, October 21, 2008, at 1:00 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: 67954423. The call can also be accessed via the Internet on the Investors page of Liberty's web site at www.libertyproperty.com for two weeks 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.

   
   
   Liberty Property Trust
   Statement of Operations
   September 30, 2008
   (Unaudited and in thousands, except per share amounts)
   
   Quarter Ended     Nine Months Ended
   September September September September
   30, 2008  30, 2007  30, 2008  30, 2007
   
   Operating Revenue
   Rental                            $131,042  $122,864  $392,650  $352,262
   Operating expense reimbursement     57,935    52,254   173,337   152,908
   Total operating revenue          188,977   175,118   565,987   505,170
   
   Operating Expenses
   Rental property                     38,468    36,121   114,717   106,433
   Real estate taxes                   22,305    19,299    66,615    53,494
   General and administrative          13,145    13,142    40,178    38,866
   Depreciation and amortization       44,695    40,146   132,021   112,897
   Total operating expenses         118,613   108,708   353,531   311,690
   
   Operating Income                  70,364    66,410   212,456   193,480
   
   Other Income/Expense
   Interest and other                   3,333     2,443     9,459     8,105
   Interest                           (38,909)  (33,043) (118,336)  (88,641)
   Total other income/expense       (35,576)  (30,600) (108,877)  (80,536)
   
   Income before property
   dispositions, income taxes,
   minority interest
   and equity in earnings of
   unconsolidated joint ventures      34,788    35,810   103,579   112,944
   Gain on property dispositions          463       190     1,939     1,641
   Income taxes                          (308)    1,022    (1,372)      508
   Minority interest                   (6,947)   (5,671)  (19,948)  (17,154)
   Equity in earnings of
   unconsolidated joint ventures         470       (29)    1,857     1,026
   
   Income from continuing operations   28,466    31,322    86,055    98,965
   
   Discontinued operations net of
   minority interest (including net
   gain on property dispositions of
   $10,232 and $4,145 for the quarters
   ended September 30, 2008 and 2007 and
   $13,635 and $24,376 for the nine
   month periods ended September 30,
   2008 and 2007)                     10,088     5,852    14,089    30,334
   Net Income                         $38,554   $37,174  $100,144  $129,299
   
   Basic income per common share
   Continuing operations              $0.30     $0.35     $0.93     $1.09
   Discontinued operations            $0.11     $0.06     $0.15     $0.33
   Total basic income per common share  $0.41     $0.41     $1.08     $1.42
   
   Diluted income per common share
   Continuing operations              $0.30     $0.35     $0.93     $1.08
   Discontinued operations            $0.11     $0.06     $0.15     $0.33
   Total diluted income per common
   share                               $0.41     $0.41     $1.08     $1.41
   
   Weighted average shares
   Basic                             92,928    90,905    92,324    91,179
   Diluted                           93,369    91,367    92,626    91,905
   
   
   
   Liberty Property Trust
   Statement of Funds From Operations
   September 30, 2008
   (Unaudited and in thousands, except per share amounts)
   
   
   Quarter Ended
   September 30, 2008  September 30, 2007
   Per                Per
   Weighted           Weighted
   Average            Average
   Dollars  Share   Dollars    Share
   
   Reconciliation of net income to
   FFO - basic:
   Basic - income available to common
   shareholders                        $38,554    $0.41  $37,174     $0.41
   
   Adjustments:
   Depreciation and amortization of
   unconsolidated joint ventures         4,331             1,134
   Depreciation and amortization         44,173            41,715
   Gain on property dispositions        (10,542)           (5,302)
   Minority interest share in addback
   for depreciation and amortization
   and gain on property dispositions    (1,629)           (1,648)
   Funds from operations available to
   common shareholders - basic       $74,887    $0.81  $73,073     $0.80
   
   Reconciliation of net income to
   FFO - diluted:
   Diluted - income available to common
   shareholders                        $38,554    $0.41  $37,174     $0.41
   
   Adjustments:
   Depreciation and amortization of
   unconsolidated joint ventures         4,331             1,134
   Depreciation and amortization         44,173            41,715
   Gain on property dispositions        (10,542)           (5,302)
   Minority interest excluding
   preferred unit distributions          1,746             1,705
   Funds from operations available to
   common shareholders - diluted     $78,262    $0.80  $76,426     $0.80
   
   Reconciliation of weighted average
   shares:
   Weighted average common shares - all
   basic calculations                   92,928            90,905
   Dilutive shares for long term
   compensation plans                      441               462
   Diluted shares for net income
   calculations                         93,369            91,367
   Weighted average common units          4,190             4,190
   Diluted shares for funds from
   operations calculations              97,559            95,557
   
   
   Nine Months Ended
   September 30, 2008 September 30, 2007
   Per                 Per
   Weighted            Weighted
   Average             Average
   Dollars   Share    Dollars    Share
   
   Reconciliation of net income to
   FFO - basic:
   Basic - income available to common
   shareholders                       $100,144    $1.08  $129,299    $1.42
   
   Adjustments:
   Depreciation and amortization of
   unconsolidated joint ventures        12,208              2,819
   Depreciation and amortization        130,803            118,704
   Gain on property dispositions        (14,674)           (27,238)
   Minority interest share in addback
   for depreciation and amortization
   and gain on property dispositions    (5,538)            (4,132)
   Funds from operations available to
   common shareholders - basic      $222,943    $2.41  $219,452    $2.41
   
   Reconciliation of net income to FFO
   - diluted:
   Diluted - income available to
   common shareholders                $100,144    $1.08  $129,299    $1.41
   
   Adjustments:
   Depreciation and amortization of
   unconsolidated joint ventures        12,208              2,819
   Depreciation and amortization        130,803            118,704
   Gain on property dispositions        (14,674)           (27,238)
   Minority interest excluding
   preferred unit distributions          4,526              5,927
   Funds from operations available to
   common shareholders - diluted    $233,007    $2.41  $229,511    $2.39
   
   Reconciliation of weighted average
   shares:
   Weighted average common shares -
   all basic calculations               92,324             91,179
   Dilutive shares for long term
   compensation plans                      302                726
   Diluted shares for net income
   calculations                         92,626             91,905
   Weighted average common units          4,190              4,190
   Diluted shares for funds from
   operations calculations              96,816             96,095
   
   
   

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 REITs 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.

   
   
   Liberty Property Trust
   Balance Sheet
   September 30, 2008
   (In thousands, except share amounts)
   
   September 30,     December 31,
   2008              2007
   Assets                                       (Unaudited)
   Real estate:
   Land and land improvements                  $805,797          $795,939
   Building and improvements                  4,235,427         4,432,690
   Less: accumulated depreciation              (956,732)         (863,193)
   
   Operating real estate                        4,084,492         4,365,436
   
   Development in progress                        294,227           328,138
   Land held for development                      227,003           247,124
   
   Net real estate                              4,605,722         4,940,698
   
   Cash and cash equivalents                       29,278            37,989
   Restricted cash                                 41,638            34,567
   Accounts receivable                             24,055            17,405
   Deferred rent receivable                        82,653            80,087
   Deferred financing and leasing costs,
   net of accumulated amortization
   (2008, $136,565; 2007, $119,721)              132,023           144,684
   Investment in unconsolidated joint
   ventures                                      255,317           278,383
   Assets held for sale                             2,145             2,192
   Prepaid expenses and other assets               99,138           107,932
   
   Total assets                                $5,271,969        $5,643,937
   
   Liabilities
   Mortgage loans                                $205,450          $243,169
   Unsecured notes                              2,155,000         2,155,000
   Credit facility                                370,000           622,960
   Accounts payable                                54,302            44,666
   Accrued interest                                38,063            39,725
   Dividend and distributions payable              60,991            59,849
   Other liabilities                              212,667           268,926
   
   Total liabilities                            3,096,473         3,434,295
   
   Minority interest                              369,839           372,621
   
   Shareholders' Equity
   Common shares of beneficial interest,
   $.001 par value, 183,987,000 shares
   authorized, 94,645,598 (includes
   1,249,909 in treasury) and
   92,817,879 (includes 1,249,909
   in treasury) shares issued and outstanding
   as of September 30, 2008 and December 31,
   2007, respectively                                 94                93
   Additional paid-in capital                   2,037,360         1,984,141
   Accumulated other comprehensive income          10,750            21,378
   Distributions in excess of net income         (190,596)         (116,640)
   Common shares in treasury, at cost,
   1,249,909 shares as of September 30,
   2008 and December 31, 2007                    (51,951)          (51,951)
   Total shareholders' equity                   1,805,657         1,837,021
   
   Total liabilities & shareholders' equity    $5,271,969        $5,643,937
   
   

SOURCE Liberty Property Trust

http://www.libertyproperty.com
   

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