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Liberty Property Trust Reports Operating Results (10-Q)

August 06, 2010 | About:
10qk

10qk

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Liberty Property Trust (LRY) filed Quarterly Report for the period ended 2010-06-30.

Liberty Property Trust has a market cap of $3.61 billion; its shares were traded at around $31.89 with a P/E ratio of 11.9 and P/S ratio of 4.8. The dividend yield of Liberty Property Trust stocks is 6%.LRY is in the portfolios of Jim Simons of Renaissance Technologies LLC, Pioneer Investments, Bruce Kovner of Caxton Associates, Jeremy Grantham of GMO LLC.

Highlight of Business Operations:

Disposition activity allows the Company to, among other things, (1) reduce its holdings in certain markets and product types within a market; (2) lower the average age of the portfolio; (3) optimize the cash proceeds from the sale of certain assets; and (4) obtain funds for investment activities. During the three months ended June 30, 2010, the Company realized proceeds of $10.2 million from the sale of two operating properties representing 72,000 square feet and 12 acres of land. During the six months ended June 30, 2010, the Company realized proceeds of $16.5 million from the sale of four operating properties representing 150,000 square feet and 12 acres of land. The Companys original guidance for 2010 suggested that it would realize proceeds of approximately $75 million to $125 million from the sale of operating properties. The Company currently believes that it will not reach the low end of this range.

During the three months ended June 30, 2010, the Company brought into service one Wholly Owned Property under Development representing 211,000 square feet and a Total Investment, as defined below, of $45.7 million, and did not initiate any development. During the six months ended June 30, 2010, the Company brought into service two Wholly Owned Properties under Development representing 306,000 square feet and a Total Investment of $70.5 million, and did not initiate any development. As of June 30, 2010, the projected Total Investment of the Wholly Owned Property under Development was $12.4 million. For 2010, the Company expects to bring into service operating properties representing between $75 million and $100 million of Total Investment. Although the Company continues to pursue development opportunities, current market conditions are not generally favorable for speculative development. Any development starts for 2010 likely will be substantially pre-leased.

During the three and six months ended June 30, 2010, an unconsolidated joint ventures in which the Company held an interest brought one JV Property under Development into service representing 464,000 square feet and a Total Investment of $25.1 million. As of June 30, 2010, the projected Total Investment of the JV Property under Development was $134.0 million. For 2010, the Company expects unconsolidated joint ventures in which it holds an interest to bring into service between $125 million and $175 million of Total Investment in operating properties.

Total operating revenue increased to $185.0 million for the three months ended June 30, 2010 from $183.6 million for the three months ended June 30, 2009. The $1.4 million increase was primarily due to the increase in investment in operating real estate and an increase in Termination Fees, which totaled $1.5 million for the three months ended June 30, 2010 as compared to $0.8 million for the same period in 2009. Total operating revenue increased to $373.8 million for the six months ended June 30, 2010 from $368.5 million for the six months ended June 30, 2009. The $5.3 million increase was primarily due to the increase in investment in operating real estate and an increase in Termination Fees, which totaled $3.2 million for the six months ended June 30, 2010 as compared to $1.1 million for the same period in 2009. Termination Fees are fees that the Company agrees to accept in consideration for permitting certain tenants to terminate their leases prior to the contractual expiration date. Termination Fees are included in rental revenue and if a property is sold, related termination fees are included in discontinued operations.

Property level operating income, exclusive of Termination Fees, for the Same Store properties decreased to $120.1 million for the three months ended June 30, 2010 from $124.1 million for the three months ended June 30, 2009, on a straight line basis (which recognizes rental revenue evenly over the life of the lease), and decreased to $118.2 million for the three months ended June 30, 2010 from $120.3 million for the three months ended June 30, 2009 on a cash basis. These decreases of 3.2% and 1.8%, respectively, are primarily due to a decrease in occupancy in the Companys office portfolio.

Property level operating income, exclusive of Termination Fees, for the Same Store properties decreased to $238.8 million for the six months ended June 30, 2010 from $247.3 million for the six months ended June 30, 2009, on a straight line basis (which recognizes rental revenue evenly over the life of the lease), and decreased to $235.0 million for the six months ended June 30, 2010 from $239.8 million for the six months ended June 30, 2009 on a cash basis. These decreases of 3.4% and 2.0%, respectively, are primarily due to a decrease in occupancy in the Companys office portfolio.

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