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Liberty Property Guides for 2014, 2015 - Analyst Blog

Zacks Equity Research
Updated

Liberty Property Trust (LPT) has revealed its funds from operations ("FFO") per share outlook for both 2014 and 2015. For 2014, the company expects FFO per share in the range of $2.45 – $2.47, while for 2015, the guidance comes within $2.55 – $2.65.

Notably, the company’s fourth-quarter results include around $2 million from gain on U.K. land sales, which was previously expected to take place in 2015.

In addition to providing its outlook for 2014, Liberty Property disclosed its fourth-quarter 2014 activity. According to the company, its fourth-quarter acquisitions would aggregate $27.3 million and comprise a vacant distribution building (374,000 square feet) in southern California.

Moreover, fourth-quarter dispositions til Dec 16 amounted to $70.7 million of suburban office and non-core industrial properties (745,000 square feet). Fourth-quarter wholly-owned development starts include 5 projects for $98 million, spanning 556,000 square feet and 55% pre-leased.

Amid a growing demand for premium quality industrial space, this real estate investment trust (“REIT”) is boosting the quality of its portfolio through development, limited acquisition effort as well as persistent disposition of suburban office assets. In fact, FFO growth is expected to be backed by a rise in occupancy and rents in the coming year.

Therefore, despite the recent negative impact on earnings from the company’s shift toward the industrial portfolio and consecutive curtailment of its office properties, we believe the repositioning efforts would help it ride on the growth trajectory.

Liberty Property currently has a Zacks Rank #3 (Hold). Investors interested in the REIT industry may consider better-ranked stocks like Cousins Properties Inc. (CUZ), Host Hotels & Resorts, Inc. (HST) and Public Storage (PSA). All these stocks carry a Zacks Rank #2 (Buy).

Note: FFO, a widely used metric to gauge the performance of REITs, are obtained after adding depreciation and amortization and other non-cash expenses to net income.


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Zacks Investment Research