Liberty Property Trust ( LRY ), a real estate investment trust (REIT), has recently altered its fiscal 2011 FFO (fund from operations) guidance to better reflect the $0.04 impairment charge that was recorded in the first half of the year. Fund from operations, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.
The company presently expects fiscal 2011 FFO in the range of $2.59 - $2.62 per share compared to earlier projections of $2.55 - $2.58. For fiscal 2012, Liberty Property expects FFO in the range of $2.45 - $2.60 per share.
The FFO guidance for fiscal 2012 include the impact of a previously undisclosed $190 million suburban office and flex portfolio currently under 'contract for sale' and scheduled to be completed in the first quarter of 2012.
The underlying assumptions for the fiscal guidance are based on a sedate recovery of the overall economy, with occupancy and rent growth anticipated to be more brisk in the industrial segment than that of the office. Furthermore, with a continued portfolio repositioning program that focuses on higher growth markets, Liberty Property expects to have a relatively strong performance in 2012.
Based in Pennsylvania, Liberty Property provides leasing, property management, development, construction management, design management, and related services for a portfolio of industrial and office properties. The company has a strong portfolio of multi-tenant industrial and office properties in prime business locations in the U.S. and U.K., and operates across multiple markets that enable mitigation of geographical risk.
Liberty Property specifically focuses on metro-office, multi-tenant industrial and flex properties and markets that possess strong demographic and economic fundamentals, which ensure a steady revenue stream for the company.
We maintain our long-term 'Neutral' recommendation for Liberty Property, which currently has a Zacks #3 Rank that translates into a short-term 'Hold' rating. We also have a long-term 'Neutral' recommendation and a Zacks #3 Rank for Duke Realty Corp. ( DRE ), one of the competitors of Liberty Property.
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