Q4 2011 Earnings Call Transcript

Transcript Call Date 02/07/2012

Operator: Good afternoon. My name is Melissa, and I will be your conference operator today. At this time, I would like to welcome everyone to the Fourth Quarter Earnings Conference 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. Jeanne Leonard, you may begin your conference.

Jeanne A. Leonard - IR: Thank you, Melissa, and thank you everyone for tuning in today. You are going to 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.

Liberty issued a press release detailing our fourth quarter results this morning, as well as a supplemental information package. You can access these in the Investor section of Liberty's website at In both documents, you will 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. I'd like spend just a couple of minutes reviewing our fourth quarter results, looking at our overall performance in 2011 and giving you a sense of where we see the world six weeks into 2012.

The fourth quarter was another solid quarter of results for Liberty. We leased 4.6 million square feet bringing year-end leasing production to 15.8 million square feet. Our renewal rate remained above historic norms. Rent declines were less than expected, and we saw a marked increase in occupancy to 91.3%, our best level in three years.

The fourth quarter was also a solid quarter in which we completed our 2011 capital and investment activity. We acquired $250 million in assets in 2011 totaling 4.2 million square feet. We also sold $365 million worth of real estate and another 4.2 million square feet. Finally, we started 10 development projects, a total of 3.1 million square feet valued at $289 million. All of these were either at the high-end or exceeded our projections for the year.

But perhaps more importantly, 2011 was the year that allowed us to significantly move forward on our long-term strategy. We were able to decrease our portfolio of suburban and high-finish flex product while increasing our industrial and metro office product. We either have or are in the midst of exiting the suburban office markets in Greenville, South Carolina, Greensboro, North Carolina, Richmond, Milwaukee and the Lehigh Valley. By the end of this year 2012 and upon completion of our development pipeline, we'll have increased Liberty's industrial square feet since 2008 from 49% to 62% of our portfolio.

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