Liberty Property Trust (LRY) a hybrid real estate investment trust (:REIT) reported fourth quarter 2012 FFO (funds from operations) of 63 cents per share, in line with the Zacks Consensus Estimate as well as the prior-year quarter. The result was attributable to the strong acquisitions and development activities, slightly impacted by uncertain economic conditions.

For full year 2012, Liberty Property reported FFO of $2.58 per share, well ahead of the Zacks Consensus Estimate of $2.52. Yet, it was slightly below the prior-year FFO of $2.61 per share.

Total revenue during the reported quarter came in at $176.2 million, up 4.4% from the prior-year period. Also, it came well ahead of the Zacks Consensus Estimate of $174 million. For the full year, total revenue increased 3.4% year over year to $685.6 million, but marginally missed the Zacks Consensus Estimate of $686 million.

Inside the Headlines Numbers

At the end of the quarter, the occupancy at in-service portfolio of Liberty Property spanning 81.3 million square feet increased 30 bps (basis point) to 92.1% from 91.8% in the previous quarter. The company witnessed strong leasing activities in the quarter with about 4.9 million square feet of leased space. In the full year, the company leased total 18.5 million square feet of space.

Operating income from same-store properties slipped 0.2% on a cash basis and 0.3% on a straight-line basis from the year-ago quarter. For 2012, it dipped by 0.3% on a cash basis and by 0.8% on a straight-line basis compared with 2011.

Portfolio Restructuring Activity

Liberty Property witnessed continuous demand for premium quality industrial space from large corporate users and build-to-suit opportunities for both industrial and office users. During the reported quarter, the company acquired 22 industrial buildings for $176.3 million. The properties, spanning total 3.5 million square feet of leasable space, were 92.5% occupied. Also, the company divested two properties, spanning 257,000 square feet of leasable space (61.9% leased at the time of the sale), for $17.7 million.

During the same period, Liberty Property brought 5 development properties worth $44.1 million into operation. The properties, spanning 290,000 square feet of leasable space, were 77.0% occupied and 97.7% leased as of Dec 31, 2012. The properties, generating current yield of 8.5%, is projected to generate stabilized yield of 10.5%.

In addition, the company started developing 1 property for GAC Industries in Houston, Texas. The estimated construction cost of the property, spanning 181,000 square foot, is $11.6 million.

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