http://www.morningstar.com/earnings/44466088-lry-lry-q3-2012.aspx

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Q3 2012 Earnings Call Transcript

Transcript Call Date 10/23/2012

Operator: Good afternoon. My name is Amanda, and I will be your conference operator today. At this time, I would like to welcome everyone to the Liberty Property Trust Third quarter 2012 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.

Jeanne Leonard, you may begin your conference.

Jeanne A. Leonard - IR: Thank you, Amanda, 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 third quarter results this morning as well as a supplemental financial information package, and you can access these in the Investor’s section of Liberty's website at libertyproperty.com. 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. We had another solid performance in the third quarter. OFO was $0.64, we leased 3.8 million square feet bringing year-to-date leasing to 13.7 million square feet. This consistent leasing productivity brought occupancy to 91.8%, up 110 basis points from last quarter. Though we only acquired one asset in the quarter, our acquisition pipeline is strong for the remainder of the year. Our development pipeline grew to $350 million, 3.6 million square feet of space. Again this quarter what is impressive is the consistency of Liberty's performance in this uncertain economic environment. There are still 6 million less full-time workers than there were four years ago. This economy has a long way to go to move from tepid to robust. We have sensed in the last 30 to 45 days an uptick in uncertainty and hence a slowdown in leasing volumes. This uncertainty maybe election and fiscal cliff related. Consistent with what we have been seeing over the last year, this pullback is focused on smaller local businesses. Larger corporates remain more active and decisive. This uncertainty is also focused on the office sector with our industrial customers more decisive. Some of this behavior is evidenced by the larger industrial occupancy gain this quarter, up 160 basis points plus modest rent gains. This compares to the more tempered office occupancy gains of 50 basis points to 89.3% and rent roll-downs particularly focused on some of the softer office markets.

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