Liberty Closes Cabot Fund Buyout - Analyst Blog


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Liberty Property Trust ( LRY ) sealed the buyout of the operating partnership of Cabot Industrial Value Fund III for around $1.475 billion. The acquisition enhanced the company's industrial portfolio with 23 million square feet and 177 properties in 24 new and existing Liberty Property markets.

Of the total Cabot Portfolio, roughly 58% of it is situated in 14 of Liberty Property's existing industrial markets and the rest of the portfolio is positioned in 10 new markets, in which the company does not have a presence. As of May 31, the Cabot Portfolio was 93.3% leased to 436 tenants.

Liberty Property financed the deal with proceeds of $834.1 million reaped through common equity offering of 24.15 million shares, $450 million senior notes offering and $230 million in mortgage debt assumption.   

This high-end acquisition is expected to significantly boost Liberty Property's top-line growth going forward. The buyout will not only strengthen Liberty Property's industrial portfolio, it will also expand the company's footprint in three of the top five industrial markets of the U.S.

In particular, the acquisition will deepen its reach in existing Liberty industrial markets, including Chicago, South Florida, Houston, New Jersey, Maryland and Central Pennsylvania. Moreover, it will offer the company the opportunity to expand its platform in new markets including Atlanta, Dallas/Fort Worth and Southern California.

Moreover, recently Liberty Property disclosed the leasing of 7.5 million square feet in its industrial portfolio in third-quarter 2013. With this, the company recorded the highest quarterly leasing volume, since its inception in 1972.

We are encouraged with Liberty Property's noteworthy achievement in industrial portfolio acquisition and leasing. As a matter of fact, the U.S. industrial market is benefiting from the healthy demand for such properties with the net absorption rate improving and vacancy rates declining. Hence, with the high-end tenant base, Liberty Property is well poised to ride on the growth trajectory and enjoy a steady rise in rental revenue, going forward.

This Pa.-based real estate investment trust (REIT) - Liberty Property - currently has a Zacks Rank #3 (Hold). Better performing REITs that are worth a look include CubeSmart ( CUBE ), Parkway Properties Inc. ( PKY ) and Sotherly Hotels Inc. ( SOHO ), all of them carrying a Zacks Rank #1 (Strong Buy).

CUBESMART (CUBE): Free Stock Analysis Report

LIBERTY PPTY TR (LRY): Free Stock Analysis Report

PARKWAY PPTY (PKY): Free Stock Analysis Report


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
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