Q3 2011 Earnings Call Transcript

Transcript Call Date 10/25/2011

Operator: Good afternoon. My name is Michelle, and I will be your conference operator today. At this time, I would like to welcome everyone to the Liberty Property Trust Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. Thank you.

Ms. Leonard, you may begin your conference.

Jeanne A. Leonard - IR: Thank you, Michelle, and thanks everyone for tuning in today. You will hear prepared remarks from Chief Executive Officer, Bill Hankowsky; Chief Financial Officer, George Alburger; Chief Investment Officer, Mike Hagan; and Chief Operating Officer, Rob Fenza.

During the call, management will be referring to our quarterly supplemental information package. You can access this package as well as the corresponding press release on the Investor section of Liberty's website at In this package and in the press release, you will also find a reconciliation of non-GAAP financial measures we reference today to GAAP measures.

I will also remind you that some of the statements made during this call will include forward-looking statements within the meaning of the Federal Securities law. Although Liberty believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, we can give no assurance that these expectations will be achieved. As forward-looking statements, these statements involve risks, uncertainties, and other factors that could cause actual results to differ materially from the expected results, risks that were detailed in the issued press release, and from time-to-time in the Company's filings with the Securities and Exchange Commission. The Company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.

Bill, would you like to begin?

William P. Hankowsky - Chairman, President and CEO: Thank you, Jeanne, and good afternoon, everyone. Liberty had a very solid third quarter. We leased 4.5 million square feet, which was our best quarter of the year, bringing year-to-date leasing to 11.3 million square feet. This leasing was driven in part by a 66% renewal rate yielding 89.9% occupancy, up 40 basis points. We continue to execute on our strategic investment activity. Year-to-date, we've sold $370 million, acquired $207 million, and commenced development on $171 million, with another $117 million in development to start in the fourth quarter. Mike and Rob will provide further color on this activity in a moment.

We are now near the high end of our guidance ranges for each of these activities – sales, acquisitions, and development; and as we have said in the past, if we see opportunities to advance our strategy we'll take advantage of them. The economy continues to be challenged. The unemployment rate has been stuck above 9% now for several quarters, while GDP growth is below 2%. Adding to this weakness in the last 60 days, there seems to be an increased level of uncertainty and anxiety, we all know why.

It started with the debt ceiling debate in August, has been fed by the daily Euro Greek concerns, and now is fed by the belief that nothing will take change until the 2012 elections at the earliest. So we sense the landscape with a split personality. On the one hand, we continue to see leasing activity in our markets, clearly stronger on the industrial side than the office side, but on the other hand, today's anxiety may translate into curtailed 2012 business plans for customers, and that's what keeps us up at night. How this all plays out will take the next several months to see.

Read our Earnings Call Transcript disclaimer.
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