Liberty Property Trust is a real estate investment trust (or REIT) that develops, acquires, and manages commercial and industrial properties in the Mid-Atlantic, Southeastern and Midwestern United States. The company focuses on five varieties of properties, including big box warehouses, multi-tenant industrial facilities, flex/R&D buildings, and office space. As of 2006, the company owned over 65 million rentable square feet across 720 properties. Of these around 41% were offices, while 59% were industrial-use.
The company has been pursuing a strategy of entering high growth markets like DC and Phoenix. It is doing so via both acquisition and development. Acquisition can quickly expose the company to attractive demographics but also greater competition in finding real estate deals at favorable prices. Development, on the other hand, carries the risk of extended periods of no cash flow, despite usually having a superior return for the company in the long run. Nonetheless, LRY has on balance earned some of the heftiest returns compared to peers over the previous five years, evidence of a strategy that seems to be paying off.
LRY is at the whim of the US economic cycle, both because of the impact of variables like interest rates on the value of properties owned and the occupancy and rental rates of tenants, who are almost exclusively other businesses. LRY also has significant development activity compared to peers, which can put greater financial pressure on the company during periods of economic downturns.
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The rate of job growth, commercial activity, property taxes, zoning requirements and regulations, and other factors within these states can have important effects on the company's bottom line. The lack of geographic diversity exposes the company more heavily to real estate cycles in its operating areas, as real estate values move in tandem within a given region.
Market share is listed by 2007 revenues. In 2007, LRY held 7% of total U.S. office REIT market share, by revenues. There are 14 U.S. exchange traded REITs focusing on office properties. Of those, the top three Boston Properties (BXP), Brookfield Properties (BPO) and SL Green Realty (SLG) accounted for just over half of Market Share by 2007 revenus.
LRY faces heavy competition within each of its markets. Commercial real estate operators compete for tenants, financing, and acquisitions of properties. They compete on several factors, including rents, services provided for tenants, and location. Competitors range anywhere from other REITs to pension funds to individual and foreign investors. Some competitors include:
Below are comparisons of relevant operating information for similar commercial real estate investment trusts.
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