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Liberty Completes Sale of 49 Properties for $367.7M

Greenfield Acquires 4.02M SF, 140 Acres in Three States
December 30, 2013
Wrapping up a year of major changes at Liberty Property Trust (NYSE: LRY), the REIT finalized the disposition of 49 properties totaling 4,022,779 square feet and 140 acres across three states for $367.7 million to Greenfield Partners LLC, a private investment capital firm based in Connecticut.

The transaction represents the first half of a previously announced portfolio sale involving 97 properties. The balance of the portfolio is expected to close in late January 2014 for another $329.6 million.

This sale consists of 1.9 million square feet of office properties, 1.8 million square feet of flex space, and only 275,000 square feet of industrial buildings. It comprises all the properties Liberty owns in Jacksonville, FL, portfolio, as well as all of its office properties in Maryland, Southern New Jersey and the Fort Washington suburb of Philadelphia, and flex properties in Minnesota.

The largest property in the sale was a 753,607-square-foot office building (pictured, above) at 1100 Virginia Dr. in Fort Washington, PA that was built in 1964 on 67 acres in the Ft. Wash / Spring House submarket of Philadelphia. This asset was 75 percent leased at the time of sale.

MarketPropertiesSF
Jacksonville, FL322,110,212
Philadelphia, PA5996,874
Minneapolis, MN12915,693
Total494,022,779

The buyer financed the acquisition in part with a $157.5 million loan provided by JP Morgan Chase Bank.

The year-end sale marks the latest step in Liberty's ambitious asset repositioning program, under which it plans to increase its ownership of industrial property and reduce its exposure to office space.

The sale to Greenfield Partners follows Liberty's decision last July to significantly boost its industrial portfolio by buying the operating partnership of Cabot Industrial Value Fund III for a total cost of $1.5 billion. That deal added approximately 23 million square feet to Liberty's industrial platform, and opened 10 new markets where Liberty previously did not have a major presence, including Atlanta, Dallas/Fort Worth and Southern California.

"With approximately 58% of this portfolio located in Liberty's current markets and approximately 21% in the target markets of Atlanta, Dallas, and Southern California, we are expanding into three of the top five national industrial markets. So with one transaction we significantly deepen our current industrial presence while extending our footprint to a national level," said William P. Hankowsky, chairman and chief executive officer of Liberty, in announcing the acquisition.

REIT analysts noted the portfolio sold to Greenfield Partners included properties with significant capital improvement requirements and near term lease expirations. Analysts expect the REIT's earnings to ramp over the next several quarters as asset sale proceeds are reinvested. Heading into 2015, Liberty's industrial portfolio could account for more than 60% of its rental income compared with approximately 45% prior to the Cabot and Greenfield transactions, according to SunTrust Robinson Humphrey and Citigroup's REIT analysts.

Please see CoStar COMPS #2920492 for additional information on this transaction.

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