LIBERTY PROPERTY TRUST Industrial portfolio continues to benefit from a vibrant market; industrial and refocused office platforms expected to provide internal and external growth opportunities
Management Comment
“Liberty has completed our strategic repositioning, and our enhanced platform is rooted in deep strengths in both industrial and office. As we enter 2017, we believe our platform is positioned for growth in an environment providing tremendous opportunity for strong developers and operators to significantly enhance value,” said Bill Hankowsky, chairman and chief executive officer.
Anticipated 2017 Highlights
- Net income available to common shareholders projected to be $1.40 - $1.75 per share
- Funds from operations range of $2.40-$2.52 per share
- Industrial portfolio at near full occupancy with strong rents
- Industrial rents projected to grow 9-11%
- $400-$500 million in development starts at consistently high yields
- Selective value-add acquisition opportunities driven by national industrial platform
- Dispositions significantly reduced, will provide funding for external growth activities
Expected 2016 Results
- Net income available to common shareholders projected to be $2.46 - $2.54 per share
- Funds from Operations range of $2.36-$2.38 per share (as previously announced)
MALVERN, Pa., Dec. 13, 2016 (GLOBE NEWSWIRE) -- Liberty Property Trust (NYSE:LPT) has announced projections for 2017 financial results and has announced expectations for full-year 2016 performance. For 2017, Liberty expects to report net income available to common shareholders in the range of $1.40 - $1.75 per share, and funds from operations (“FFO”) in the range of $2.40 - $2.52 per share. For 2016, Liberty expects to report net income available to common shareholders in the range of $2.46 - $2.54 per share and, as previously disclosed, FFO in the range of $2.36-$2.38 per share. The company’s results for 2016 will include a charge relating to the early extinguishment of indebtedness of approximately $0.18 per share. Additional information and assumptions contributing to this guidance are available in the Investors section of Liberty’s website at www.libertyproperty.com.
Expected 2017 results reflect rent growth in both the company’s industrial and office portfolios, contributing to continuing positive performance of the company’s same store group of properties.
In 2017, Liberty expects to start development of $400-$500 million in wholly-owned properties, primarily industrial. The company expects to deliver $250-$350 million of development properties, at yields in the 7.5%-8.5% range. The company believes that its multi-market platform will provide the opportunity to source acquisitions, potentially in the $50-$200 million range.
After several years of portfolio-repositioning asset sales, Liberty expects to return to a normalized level of dispositions in 2017, approximately $200-$350 million. Proceeds from property sales will fund development and acquisition activity.
Dividends are declared at the discretion of the board of trustees and will depend on a number of factors that the board deems relevant. The board reviews the dividend quarterly, and there can be no assurance about the amount of future quarterly dividends that the board may ultimately declare. However, as suggested in past disclosures, Liberty believes that in light of the company’s repositioning and the cumulative impact of asset sales to date, it is likely that the board will reset the quarterly dividend. Specifically, Liberty expects the quarterly dividend to common shareholders to be reduced from $0.475 to $0.40 per share, or $1.60 per share on an annual basis, starting with the first quarter’s dividend payment in April 2017.
Liberty also updated information on activity to date during the fourth quarter of 2016:
- Seven development starts representing $200 million
- Two million square feet in industrial development starts in six markets
- 236,000 square foot build-to-suit office development underway at Liberty Center Rio Salado in Tempe, AZ
- Fee development of American Water’s headquarters underway in Camden, NJ
- 170,000 square foot lease completed in suburban PA mitigates largest 2017 office lease expiration
Commenting on economic assumptions, Mr. Hankowsky said, “We are anticipating a continuance of economic momentum and positive market forces in 2017. GDP growth, solid employment numbers, and the growth of the e-commerce sector should continue to drive absorption and provide opportunities for development.”
A reconciliation of projected FFO to projected GAAP net income available to common shareholders per share for both 2017 and 2016 is below (all amounts projected):
| 2017 Outlook | 2016 Outlook(1) | |||
| Net income available to common shareholders per diluted share | $1.40 - $1.75 | $2.46 - $2.54(2) | ||
| Depreciation and amortization of unconsolidated joint ventures | 0.06 – 0.08 | 0.07 – 0.08 | ||
| Depreciation and amortization | 1.24 – 1.28 | 1.35 – 1.35 | ||
| Gain on property dispositions(3) | (0.30) – (0.60) | (1.54) – (1.58)(2) | ||
| Noncontrolling interest share of addbacks | 0.00 – 0.01 | 0.02 – (0.01) | ||
| FFO, per diluted share | $2.40 - $2.52 | $2.36 - $2.38 |
(1) The company’s outlook includes a charge relating to the early extinguishment of indebtedness of approximately $0.18 per diluted share incurred in the third and fourth quarters of 2016.
(2) Revised from previous 2016 outlook of $2.52 - $2.54 net income per diluted share due to revised outlook for gain on property dispositions which was previously ($1.60) – ($1.58) per share.
(3) Includes equity share of gain on disposition of unconsolidated joint ventures.
About Liberty Property Trust
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 96 million square foot portfolio includes more than 566 properties providing office, distribution and light manufacturing facilities to 1,200 tenants.
Liberty will host a conference call during which management will discuss these projections and underlying assumptions, on Tuesday, December 13, 2016, at 10:00 a.m. Eastern Time. To access the conference call, please dial 855-277-7530. The passcode needed for access is 22533902. A replay of the call will be available until January 13, 2017, by dialing 1-855-859-2056 using the same passcode as above. The call can also be accessed in the Investors section of Liberty’s web site at www.libertyproperty.com.
The statements in this release contain statements that are or will be forward-looking, such as statements relating to, among others, business and financial results, our future development, acquisition and disposition activities. These forward-looking statements generally are accompanied by words such as “believes,” “anticipates,” “expects,” “estimates,” “should,” “seeks,” “intends,” “proposed,” “planned,” “ are confident,” “outlook” and “goal” or similar expressions. Although the company believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, the company can give no assurance that its expectations will be achieved. As forward-looking statements, these statements involve important risks, uncertainties and other factors that could cause actual results to differ materially from the expected results and, accordingly, such results may differ from those expressed in any forward-looking statements made by, or on behalf of the company. The company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events. These risks, uncertainties and other factors include, without limitation, uncertainties affecting real estate business generally (such as entry into new leases, renewals of leases and dependence on tenants' business operations), risks relating to the integration of the operations of entities that we have acquired or may acquire, risks relating to financing arrangements and sales of securities, possible environmental liabilities, risks relating to leverage and debt service (including availability of financing terms acceptable to the company and sensitivity of the company's operations and financing arrangements to fluctuations in interest rates), dependence on the primary markets in which the company's properties are located, the existence of complex regulations relating to status as a REIT and the adverse consequences of the failure to qualify as a REIT, risks relating to litigation, and the potential adverse impact of market interest rates on the market price for the company's securities.
Inquiries: Jeanne Leonard, Liberty Property Trust, 610.648.1704
