Liberty Property Trust
) 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
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
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
Parkway Properties Inc.
Sotherly Hotels Inc.
), all of them carrying a Zacks Rank #1 (Strong Buy).
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