Liberty Property Trust (NYSE: LRY) reported that net income per common share (diluted) was $0.33 per share for the quarter ended March 31, 2008, compared to $0.43 per share (diluted) for the quarter ended March 31, 2007.
Funds from operations available to common shareholders (diluted) ("FFO") for the first quarter of 2008 was $0.80 per share, compared to $0.80 per share for the first quarter of 2007. A reconciliation of GAAP net income to FFO is included in the financial tables accompanying this press release.
On March 31, 2008, Liberty closed a $324 million permanent financing for Comcast Center, a development property in Philadelphia, PA. Also effective March 31, Comcast Center was transferred from Liberty to an unconsolidated joint venture in which Liberty has a 20% interest.
"I am pleased with Liberty's results in the first quarter, which reflected solid leasing velocity and our ability to secure opportunities for selective development," said Bill Hankowsky, chief executive officer. "However, the prolonged stagnation of the credit markets and the increasing economic slowdown is slowing our tenants' decisions and thinning market demand, meaning we are working harder for every piece of business. Given the environment, I am very glad we are a defensively-positioned company with a strong balance sheet, minimal lease rollover, and no need to access the capital markets this year."
Portfolio Performance
Leasing: At March 31, 2008 Liberty's in-service portfolio of 73.8 million square feet was 92.2% occupied, compared to 92.9% at the end of last year. During the quarter, Liberty completed lease transactions totaling 5.3 million square feet of space.
Same Store Performance: Property level operating income for same store properties decreased by 1.1% on a cash basis and decreased by 1.5 % on a straight line basis for the first quarter of 2008 compared to the same quarter in 2007.
Real Estate Investments
Development: During the first quarter, Liberty brought into service three development properties totaling 237,000 square feet for a total investment of $23.2 million. These properties include two fully-leased properties and one distribution facility that is currently unleased. At quarter-end the properties were 49.3% leased, the current yield on these investments is 7.0%, and the projected stabilized yield is 9.4%. Additionally, 22,000 square feet of the 1.25 million square foot Comcast Center development came into service during the first quarter.
During the first quarter, Liberty began development of four properties totaling 1.2 million square feet, with an expected total investment of $90.3 million. The properties consist of a 554,000 square foot distribution building in Hagerstown, MD; a 452,000 square foot distribution building in Breinigsville, PA; a 126,000 square foot distribution building in Orlando, FL; and a 95,000 square foot office building in Philadelphia, PA. These properties are 68% pre-leased. In addition, a joint venture in which Liberty owns 25% began construction on a 225,000 square foot facility in Swedesboro, NJ, representing a total investment of $11.7 million.
As of March 31, 2008, Liberty had 6.5 million square feet of wholly-owned and joint venture properties under development. This activity represents a total projected investment of $749.3 million, with an expected yield of 8.3%. The properties were 35.5% leased at March 31.
Acquisitions: Liberty acquired no properties during the quarter.
Dispositions: Liberty sold one operating property, which contained 22,000 square feet of leaseable space, and 13 acres of land for $5.8 million. -- Liberty Property Trust
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