MALVERN, Penn., July 25, 2017 (GLOBE NEWSWIRE) -- Liberty Property Trust announced financial and operating results for the quarter ended June 30, 2017.

Management Comments
”Liberty’s results at mid-year reflect the continued strength of the industrial real estate market,” said Bill Hankowsky, chairman and chief executive officer. “We anticipate consistently strong leasing volumes, rent growth and occupancy gains for the remainder of the year.”

Highlights for Second Quarter 2017

• Net income available to common shareholders $0.35 per diluted share
• NAREIT Funds from Operations $0.65 per diluted share
• Same store operating income increased by 1.4%, over prior year quarter
• Same store operating income for the industrial portfolio increased by 2.7%
• Portfolio occupancy on a commenced basis at quarter-end 95.6%, and on a signed basis 97.2%
• 6.5 million square feet of lease transactions completed
• Rents on industrial leases up 11.9%
• Rents on office leases up 5.7%
• $73.6 million in development starts

Earnings Guidance

• Liberty increased Funds from Operations guidance range for 2017 to be $2.49 - $2.55 per diluted share

Financial Results
Net income: Net income available to common shareholders for the second quarter of 2017 was $51.4 million, or $0.35 per diluted share, compared to $49.6 million, or $0.34 per diluted share, for the second quarter of 2016.

For the six months ended June 30, 2017, net income available to common shareholders was $94.4 million, or $0.64 per diluted share, compared to $107.2 million, or $0.73 per diluted share, for the first six months of 2016.

Funds from Operations: The company uses the National Association of Real Estate Investment Trusts (“NAREIT”) definition of Funds from Operations (“FFO”) as an operating measure of the company’s

financial performance. A reconciliation of U.S. GAAP net income to NAREIT FFO is included in the financial data tables accompanying this press release.

NAREIT FFO available to common shareholders for the second quarter of 2017 was $98.2 million, or $0.65 per diluted share, compared to $102.2 million, or $0.68 per diluted share, for the second quarter of 2016.

Net income and NAREIT FFO for the second quarter of 2017 were impacted by gain on the sale of non-depreciable assets of $3.8 million ($0.025 per diluted share).

FFO available to common shareholders for the six months ended June 30, 2017 was $188.8 million, or $1.25 per diluted share, compared to $195.3 million, or $1.30 per diluted share, for the first six months of 2016.

Operating Performance
Same Store Performance: Property level operating income for same store properties increased by 0.7% on a cash basis and by 1.4% on a straight line basis for the second quarter of 2017, compared to the same quarter in 2016. For the six months ended June 30, 2017, property level operating income for same store properties increased by 1.1% on a cash basis and on a straight line basis, compared to the same period in 2016.

• Same store operating income for the industrial portfolio increased by 2.1% on a cash basis and 2.7% on a straight line basis. For the six months ended June 30, 2017, industrial same store operating income increased by 2.3% on a cash basis and 2.4% on a straight line basis, compared to the same period in 2016.
• Same store operating income for the office portfolio decreased by 6.6% on a cash basis and by 5.5% on a straight line basis. For the six months ended June 30, 2017, office same store operating income decreased by 5.2% on a cash basis and on a straight line basis, compared to the same period in 2016.

Occupancy: At June 30, 2017, Liberty’s operating portfolio of 98.9 million square feet was 95.6% occupied, compared to 96.1% at the end of the first quarter 2017. During the quarter, Liberty completed lease transactions totaling 6.5 million square feet of space, and occupancy on a signed but not yet commenced basis is 97.2%.

Industrial Portfolio: The primary driver of Liberty’s results is the performance of its industrial portfolio. The 92.3 million square foot industrial portfolio was 95.9% leased at quarter-end, compared to 96.6% for the previous quarter. Industrial distribution rents increased 11.9% on renewal and replacement leases signed during the quarter. 96% of these leases have built-in rent escalators.

Office Portfolio: Occupancy of Liberty’s 6.6 million square foot office portfolio was 91.5%, up from 88.4% from the previous quarter. During the quarter, a previously announced lease for 170,000 square feet of office space commenced. This lease resulted in a significant increase in office occupancy, as well as a higher than usual tenant improvement costs. Office rents increased 5.7% on renewal and replacement leases signed in the office portfolio, and 97% of these leases contain built-in rent escalators.

Real Estate Investments

Development Deliveries: In the second quarter, Liberty brought into service four wholly-owned development properties for a total investment of $65.2 million. The properties contain 724,000 square feet of leasable space and were 100% occupied as of the end of the quarter. The yield on these properties at June 30, 2017 was 7.9%.

Development Starts: In the second quarter, Liberty began development of two wholly-owned properties totaling 1,026,000 square feet of leasable space at a projected investment of $73.6 million. The properties consist of:

• 7157 Ridge Road, Hanover, MD, 220,000 square feet, 100% leased
• 100 Carolina Way, Carlisle, PA 805,600 square feet for inventory

Real Estate Acquisitions
During the second quarter, Liberty purchased one 101,000 square foot industrial building currently under development in Gardena, CA for $20.1 million.

Real Estate Dispositions
During the second quarter, Liberty sold two suburban office buildings totaling 94,000 square feet for $8.1 million.

2017 Outlook
A reconciliation of projected NAREIT FFO per share to projected U.S. GAAP net income available to common shareholders per share for 2017 is below (all amounts projected). Additional information on assumptions underlying this guidance is included in Liberty’s second quarter supplemental financial report on the company’s website.

About the Company Liberty Property Trust (NYSE:LPT) is a leader in commercial real estate, serving customers in the United States and United Kingdom, through the development, acquisition, ownership and management of superior office and industrial properties. Liberty's 99 million square foot operating portfolio includes 560 properties which provide office, distribution and light manufacturing facilities to 1,200 tenants.

Additional information about the company, including Liberty’s Quarterly Supplemental Package with detailed financial information, is available in the Investors section of the Company’s web site at www.libertyproperty.com.