On Jan 27, we upgraded our long-term recommendation on
Liberty Property Trust
) to Neutral from Underperform, following its completion of the
Cabot buyout in the fourth quarter and announcement of the latest
deal with Comcast to build property worth $1.2 billion in the
Why the Upgrade?
Liberty Property is expected to benefit from the progressing
U.S. industrial market fundamentals that are being driven by
healthy demand for industrial properties with improving net
absorption rate and declining vacancy rates. Capitalizing on the
opportunity, the company sealed the $1.475 billion buyout of the
operating partnership of Cabot Industrial Value Fund III in
Also, the Comcast deal penned on Jan 15 to build a mixed use
tower in Philadelphia - which is projected to be U.S.'s tallest
building outside New York and Chicago - raised investors' hope.
These initiatives are poised to strengthen the company's presence
in upscale locations, going forward.
In addition, to lower its exposure to suburban office
properties, the company inked a deal to divest 97 properties and
159 acres of land in the fourth quarter. Of this, Liberty
Property concluded the sale of 49 properties and 140 acres of
land in late Dec 2013, and garnered $367.7 million. The sale of
the remaining assets is slated to be accomplished by late Jan
2014. These activities are anticipated to enhance the company's
portfolio mix and boost the top line going forward.
Over the last 30 days, the Zacks Consensus Estimate for both
2013 and 2014 FFO per share rose by a penny to $2.50 per share.
The stock currently has a Zacks Rank #3 (Hold).
Liberty Property is slated to report its fourth-quarter 2013
results on Feb 4. The company's
, which represents the difference between the Most Accurate
estimate and the Zacks Consensus Estimate, stands at +1.59%. This
along with the Zacks Rank #3 makes us confident about a positive
Other Stocks to Consider
Some better-ranked REIT-Equity Trust - Otherstocks include
National Health Investors Inc.
Sabra Health Care REIT, Inc.
). All these stocks carry a Zacks Rank #2 (Buy).
FFO, a widely accepted and reported measure of the
performance of REITs is derived by adding depreciation,
amortization and other non-cash expenses to net income.
LIBERTY PPTY TR (LRY): Free Stock Analysis
NATL HEALTH INV (NHI): Free Stock Analysis
PUBLIC STORAGE (PSA): Free Stock Analysis
SABRA HEALTHCR (SBRA): Free Stock Analysis
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