Liberty Property Trust (LPT, Financial) announced its third-quarter dividend on Sept. 7. The real estate investment trust (REIT) will be paying investors a 40 cents per share dividend. It is reporting an ex-dividend date of Sept. 29 with a payable date of Oct. 15.
Trading at a price of $42.70, the REIT currently has a forward dividend yield of 3.75%. It has been paying a steady dividend since 2013. In March 2017, it reduced its dividend from 47.5 cents per share to the current rate of 40 cents per share.
Year to date, the REIT’s price has gained 8.10%. It currently has approximately 147.32 million shares outstanding with the majority of investment from institutional investors at approximately 51%. Its leading institutional shareholder is Vanguard Group with ownership of 15.62%.
The Liberty Property Trust portfolio is focused on real estate investments in the U.S. and U.K. Its portfolio includes 560 office and industrial properties providing office, distribution and manufacturing facilities.
In the company’s most recent second-quarter earnings release, it reported revenue of $183.1 million and funds from operations (FFO) of 65 cents. Revenue of $183.1 million for the quarter was primarily generated by rental income, which accounted for 68%. Second-quarter revenue contributed to total revenue for the year of $358.5 million, which is down slightly from 2016’s revenue of $376.8 million. Rental income for the year is now down -11%.
The company reported total operating income for the second quarter of $63.3 million. Operating income for the quarter was down -6% and contributed to total operating income of $122.1 million for the first half of the year. In 2017, operating income is down -5%. In 2017, real estate taxes are accounting for approximately 20% of expenses with depreciation and amortization also a significant expense at 39%.
The company has undertaken some new projects in 2017, which have affected operating income. In second-quarter earnings comments, management reported comparable same-store properties are reporting a 1.1% increase in operating income for the year.
In the second quarter, occupancy in industrial properties decreased to 95.9% and occupancy in office properties increased to 91.5%. Both property segments reported increases in rent with a focus on rent escalators built into the lease agreements for variable pricing.
Liberty Property is also involved in the development of properties. In the second quarter, it opened four new properties that reported 100% occupancy. It also started development on two new properties in Maryland and Pennsylvania. In acquisitions and dispositions, the company purchased one industrial building and sold two office buildings.
For 2017, the company has revised its estimates for net income and funds from operations upward. Net income per share has been revised up to $1.99 to $2.19 from $1.42 to $1.75. Estimated funds from operations per share is now $2.49 to $2.55, an increase from $2.42 to $2.52.
Disclosure: I do not own any shares of LPT.
