Amid growing demand for premium quality industrial space, Liberty Property Trust ( LPT ) is boosting the quality of its portfolio through repositioning. Earlier this month, the company disclosed the commencement of the development of eight industrial projects in third-quarter 2014. Further, Liberty Property has been aiming at divesting its non-core properties and using the dry powder for gaining preferred properties across the U.S.

Moreover, the company's leasing business is improving gradually and it boasts of a diversified industrial tenant base that includes several top companies such as The Home Depot, Inc. ( HD ), Amazon.com Inc. ( AMZN ) and Kellogg Company ( K ). This promises steady rental revenue, going forward.

Although the continuous acquisition and development spreeis encouraging for long-term growth, it involves significant upfront operating expenses and drags on the margin, thereby leading to a dilution effect on the near-term earnings. In addition, sluggish office space demand due to adequate space availability exerts pressure on rent and occupancies.

In July, Liberty Property reported second-quarter 2014 funds from operations (FFO) of 59 cents per share, which missed the Zacks Consensus Estimate by 2 cents and came below the prior-year quarter figure by 7 cents.Results reflect the impact of the company's strategic shift towards the industrial portfolio and consecutive curtailment of its office properties. Also, the company cut down its full-year 2014 FFO per share guidance.

Over the last 60 days, the Zacks Consensus Estimate for 2014 FFO per share upped by a penny to $2.43. However, for 2015, it moved south by 3 cents to $2.62.

For further insight into Liberty Property, you can refer to our updated research report, which was issued on Sep 30, 2014.

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

HOME DEPOT (HD): Free Stock Analysis Report

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Liberty Property to Grow on Industrial Sector Fundamentals - Analyst Blog