10-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2007

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission file numbers: 1-13130 (Liberty Property Trust)

1-13132 (Liberty Property Limited Partnership)

LIBERTY PROPERTY TRUST
LIBERTY PROPERTY LIMITED PARTNERSHIP

(Exact Names of Registrants as Specified in Their Governing Documents)

MARYLAND (Liberty Property Trust)	23-7768996
PENNSYLVANIA (Liberty Property Limited Partnership)	23-2766549
(State or Other Jurisdiction	(I.R.S. Employer
of Incorporation or Organization)	Identification Number)
500 Chesterfield Parkway
Malvern, Pennsylvania	19355
(Address of Principal Executive Offices)	(Zip Code)
Registrants’ Telephone Number, including Area Code	(610) 648-1700
Securities registered pursuant to Section 12(b) of the Act:

	NAME OF EACH EXCHANGE
TITLE OF EACH CLASS	ON WHICH REGISTERED
Common Shares of Beneficial Interest, $0.001 par value (Liberty Property Trust)	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

YES þ NO o

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.

YES o NO þ

Indicate by check mark whether the Registrants (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrants were required to file such reports) and (2) have been subject to such filing requirements for the past ninety (90) days.

YES þ NO o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulations S-K is not contained herein, and will not be contained, to the best of the Registrants’ knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. þ

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. (See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act). (Check one):

Large accelerated filer þ	Accelerated filer o	Non-accelerated filer o	Smaller reporting company o
		(Do not check if a smaller reporting company)

Indicate by check mark if the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

YES o NO þ

The aggregate market value of the Common Shares of Beneficial Interest, $0.001 par value (the “Common Shares”), of Liberty Property Trust held by non-affiliates of Liberty Property Trust was $4.0 billion, based upon the closing price of $43.93 on the New York Stock Exchange composite tape on June 29, 2007. Non-affiliate ownership is calculated by excluding all Common Shares that may be deemed to be beneficially owned by executive officers and trustees, without conceding that any such person is an “affiliate” for purposes of the federal securities laws.

Number of Common Shares outstanding as of February 22, 2008: 92,061,346

Documents Incorporated by Reference

Portions of the proxy statement for the annual meeting of shareholders of Liberty Property Trust to be held in 2008 are incorporated by reference into Part III of this Form 10-K.

INDEX

	Page
Part I
Item 1. Business		4
Item 1A. Risk Factors		9
Item 1B. Unresolved Staff Comments		16
Item 2. Properties		16
Item 3. Legal Proceedings		19
Item 4. Submission of Matters to a Vote of Security Holders		20
Part II
Item 5. Market for Registrants’ Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities		21
Item 6. Selected Financial Data		22
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations		24
Item 7A. Quantitative and Qualitative Disclosures About Market Risk		36
Item 8. Financial Statements and Supplementary Data		36
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		116
Item 9A. Controls and Procedures		116
Item 9B. Other Information		116
Part III
Item 10. Trustees, Executive Officers and Corporate Governance		117
Item 11. Executive Compensation		117
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters		117
Item 13. Certain Relationships and Related Transactions, and Trustee Independence		117
Item 14. Principal Accountant Fees and Services		117
Part IV
Item 15. Exhibits and Financial Statement Schedules		118
Signatures for Liberty Property Trust		126
Signatures for Liberty Property Limited Partnership		127
Exhibit Index		128
Amended and Restated Schedule A
Agreement of Limited Partnership of Liberty Washington, LP
Contribution Agreement
Statement re: Computation of Ratios
Subsidiaries
Consent of Ernst & Young LLP relating to the Trust
Consent of Ernst & Young LLP relating to the Operating Partnership
Certificatons of the Chief Executive Officer
Certificatons of the Chief Financial Officer
Certificatons of the Chief Executive Officer
Certificatons of the Chief Financial Officer
Certificatons of the Chief Executive Officer
Certificatons of the Chief Financial Officer
Certificatons of the Chief Executive Officer
Certificatons of the Chief Financial Officer

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The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements. Certain information included in this Annual Report on Form 10-K and other materials filed or to be filed by the Company (as defined herein) with the Securities and Exchange Commission (“SEC”) (as well as information included in oral statements or other written statements made or to be made by the Company) contain statements that are or will be forward-looking, such as statements relating to rental operations, business and property development activities, joint venture relationships, acquisitions and dispositions (including related pro forma financial information), future capital expenditures, financing sources and availability, litigation and the effects of regulation (including environmental regulation) and competition. These forward-looking statements generally are accompanied by words such as “believes,” “anticipates,” “expects,” “estimates,” “should,” “seeks,” “intends,” “planned,” “outlook” and “goal” or similar expressions. Although the Company believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, the Company can give no assurance that its expectations will be achieved. As forward-looking statements, these statements involve important risks, uncertainties and other factors that could cause actual results to differ materially from the expected results and, accordingly, such results may differ from those expressed in any forward-looking statements made by, or on behalf of the Company. The Company assumes no obligation to update or supplement forward looking statements that become untrue because of subsequent events. These risks, uncertainties and other factors include, without limitation, uncertainties affecting real estate businesses generally (such as entry into new leases, renewals of leases and dependence on tenants’ business operations), risks relating to our ability to maintain and increase property occupancy and rental rates, risks relating to construction and development activities, risks relating to acquisition and disposition activities, risks relating to the integration of the operations of entities that we have acquired or may acquire, risks relating to joint venture relationships and any possible need to perform under certain guarantees that we have issued or may issue in connection with such relationships, possible environmental liabilities, risks relating to leverage and debt service (including availability of financing terms acceptable to the Company and sensitivity of the Company’s operations and financing arrangements to fluctuations in interest rates), dependence on the primary markets in which the Company’s properties are located, the existence of complex regulations relating to status as a REIT and the adverse consequences of the failure to qualify as a REIT, risks relating to litigation, including without limitation litigation involving entities that we have acquired or may acquire, and the potential adverse impact of market interest rates on the market price for the Company’s securities. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Forward-Looking Statements.”

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PART I

ITEM 1. BUSINESS

The Company

Liberty Property Trust (the “Trust”) is a self-administered and self-managed Maryland real estate investment trust (a “REIT”). Substantially all of the Trust’s assets are owned directly or indirectly, and substantially all of the Trust’s operations are conducted directly or indirectly, by its subsidiary, Liberty Property Limited Partnership, a Pennsylvania limited partnership (the “Operating Partnership” and, together with the Trust and their consolidated subsidiaries, the “Company”).

The Company completed its initial public offering in 1994 to continue and expand the commercial real estate business of Rouse & Associates, a Pennsylvania general partnership, and certain affiliated entities (collectively, the “Predecessor”) which was founded in 1972. As of December 31, 2007, the Company owned and operated 353 industrial and 296 office properties (the “Wholly Owned Properties in Operation”) totaling 62.1 million square feet. In addition, as of December 31, 2007, the Company owned 28 properties under development, which when completed are expected to comprise 4.8 million square feet (the “Wholly Owned Properties under Development”) and 1,384 acres of developable land, substantially all of which is zoned for commercial use. Additionally, as of December 31, 2007 the Company had an ownership interest, through unconsolidated joint ventures, in 44 industrial and 47 office properties totaling 11.5 million square feet (the “JV Properties in Operation” and, together with the Wholly Owned Properties in Operation, the “Properties in Operation”), four properties under development, which when completed are expected to comprise 527,000 square feet (the “JV Properties under Development” and, together with the Wholly Owned Properties under Development, the “Properties under Development” and, together with the Properties in Operation, the “Properties”) and 715 acres of developable land, substantially all of which is zoned for commercial use.

The Company provides leasing, property management, development and other tenant-related services for the Properties. The Company’s industrial Properties consist of a variety of warehouse, distribution, service, assembly, light manufacturing and research and development facilities. They include both single-tenant and multi-tenant facilities, with most designed flexibly to accommodate various types of tenants, space requirements and industrial uses. The Company’s office Properties are multi-story and single-story office buildings located principally in suburban mixed-use developments or office parks. Substantially all of the Company’s Properties are located in prime business locations within established business communities. However, the Company has in the past and will when appropriate acquire or develop urban properties. During 2007 an unconsolidated joint venture in which the Company has an interest acquired a portfolio of properties in Northern Virginia and Washington D.C. and as a consequence the Company currently owns, through its joint venture, two urban office properties in Washington, D.C. The Company, through its joint venture, anticipates additional acquisitions and/or developments in the Washington, D.C. market. In addition, the Company is completing the development of a 1.25 million square foot office tower, known as Comcast Center, in Philadelphia’s central business district.

The Trust is the sole general partner and also a limited partner of the Operating Partnership, owning 95.6% of the common equity of the Operating Partnership at December 31, 2007. The common units of limited partnership interest in the Operating Partnership (the “Common Units”), other than those owned by the Trust, are exchangeable on a one-for-one basis (subject to anti-dilution protections) for the Trust’s Common Shares of Beneficial Interest, $0.001 par value per share (the “Common Shares”). The Common Units held by the limited partners were exchangeable for 4.2 million Common Shares on December 31, 2007. The Company has issued several series of Cumulative Redeemable Preferred Units of the Operating Partnership (the “Preferred Units”). The outstanding Preferred Units of each series are exchangeable on a one-for-one basis after stated dates into a corresponding series Cumulative Redeemable Preferred Shares of the Trust. Collectively, the ownership of the holders of Common and Preferred Units is reflected on the Trust’s financial statements as minority interest.

In addition to this Annual Report on Form 10-K, the Company files periodic and current reports, proxy statements and other information with the SEC. The Company makes these documents available on its website, www.libertyproperty.com, free of charge, as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC. Any document the Company files with the SEC is available to read and copy at the SEC’s Public Reference Room at 100 F Street, NE, Room 1580, Washington, DC 20549. Further information about the public reference facilities is available by calling the SEC at (800) SEC-0330. These documents also may be accessed through the SEC’s electronic data gathering, analysis and retrieval system (“EDGAR”) via electronic means, including the SEC’s home page on the Internet, www.sec.gov.

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Also posted on the Company’s website is the Company’s Code of Conduct, which applies to all of its employees and also serves as a code of ethics for its chief executive officer, chief financial officer and persons performing similar functions. The Company will send the Code of Conduct, free of charge, to anyone who requests a copy in writing from its Investor Relations Department at the address set forth on the cover of this filing. The Company intends to satisfy the disclosure requirement under Item 5.05 of Form 8-K regarding any amendments to or waivers of the Code of Conduct by posting the required information in the Corporate Governance section of its website.

Management and Employees

The Company’s 488 employees (as of February 22, 2008) operate under the direction of 18 senior executives, who have been affiliated with the Company and the Predecessor for 17 years, on average. The Company and the Predecessor have developed and managed commercial real estate for the past 35 years. The Company’s in-house leasing and property management staff operates in markets where the Company has a significant presence. This structure enables the Company to better understand the characteristics of the local markets in which it operates, to respond quickly and directly to tenant needs and to better identify local real estate opportunities. At December 31, 2007, the Company’s reportable segments were based on the Company’s method of internal reporting and are as follows:

Reportable Segments	Markets
Delaware Valley	Southeastern Pennsylvania; New Jersey
Midwest	Lehigh Valley, Pennsylvania; Minnesota; Milwaukee; Chicago
Mid-Atlantic	Maryland; Piedmont Triad, NC; Greenville, SC; Richmond; Virginia Beach
Florida	Jacksonville; Orlando; Boca Raton; Tampa; Texas
Arizona	Phoenix
Philadelphia	Philadelphia; Northern Virginia/Washington, D.C.
United Kingdom	County of Kent; West Midlands

Business Objective and Strategies for Growth

The Company’s business objective is to maximize long-term profitability for its shareholders by being a recognized leader in commercial real estate through the ownership, management, development and acquisition of superior office and industrial properties. The Company intends to achieve this objective through offering office and industrial properties in multiple markets and operating as a leading landlord in the industry. The Company believes that this objective will provide the benefits of enhanced investment opportunities, economies of scale, risk diversification both in terms of geographic market and real estate product type, access to capital and the ability to attract and retain personnel. The Company also strives to be a leading provider of customer service, providing an exceptional and positive customer experience. In pursuing its business objective, the Company seeks to achieve a combination of internal and external growth, maintain a conservative balance sheet and pursue a strategy of financial flexibility.

Products

The Company strives to be a recognized quality provider of five products (industrial properties, including big box warehouse, multi-tenant industrial, and flex/R&D; and office properties, including single-story office and multi-story office). When the Company’s marketing efforts identify opportunities, the Company will pursue other office and industrial product types including high rise office towers.

Markets

The Company operates primarily in the Mid-Atlantic, Southeastern, Midwestern and Southwestern United States. During 2007 the Company exited the Michigan market and entered the Phoenix, Arizona and the Northern Virginia/Washington, D.C. markets. Additionally, the Company owns certain assets in the United Kingdom. The Company’s goal is to operate in each of its markets with an appropriate product mix of office and industrial properties. However, in some markets it may offer only some of its product types. Generally, the Company seeks to have a presence in each market sufficient for the Company to be viewed as a significant participant in each market. The Company’s efforts emphasize business park development and asset aggregation. The Company gathers information from internal sources and independent third parties and analyzes this information to support its evaluation of markets and market conditions.

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Organizational Plan

The Company seeks to maintain a management organization that facilitates efficient execution of the Company’s strategy. As part of this effort, the Company pursues a human resources plan designed to create and maintain a highly regarded real estate company through recruiting, training and retaining capable people. The structure is designed to support a local office entrepreneurial platform operating within a value-added corporate structure. The Company upgrades its information technology periodically to keep pace with advances in available technology.

Internal Growth Strategies

The Company seeks to maximize the profitability of its Properties by endeavoring to maintain high occupancy levels while obtaining competitive rental rates, controlling costs and focusing on customer service efforts.

Maintain High Occupancies

The Company believes that the quality and diversity of its tenant base and its strategy of operating in multiple markets is integral to achieving its goal of attaining high occupancy levels for its portfolio. The Company targets financially stable tenants in an effort to minimize uncertainty relating to the ability of the tenants to meet their lease obligations.

Cost Controls

The Company seeks to identify best practices to apply throughout the Company in order to enhance cost savings and other efficiencies. The Company also employs an annual capital improvement and preventative maintenance program designed to reduce the operating costs of the Properties in Operation and maintain the long-term value of the Properties in Operation.

Customer Service

The Company seeks to achieve high tenant retention through a comprehensive customer service program, which is designed to provide an exceptional and positive customer experience. The customer service program establishes best practices and provides an appropriate customer feedback process. The Company believes that the program has been helpful in increasing customer satisfaction.

Energy Efficiency Initiatives

The Company is committed to improving the energy efficiency of the existing buildings in its portfolio and has made a substantial effort to design environmentally friendly features in the buildings it develops.

The Company has been an active participant in the U.S. Green Building Council’s Leadership in Energy and Environmental Design (“LEED”) program. The LEED program, which was created to recognize environmental leadership in the building industry, establishes a voluntary, consensus-based national standard for developing high-performance, sustainable buildings. The Company currently has over five million square feet of LEED projects completed or under construction, including the 1.25 million square foot Comcast Center.

The Company believes that building in accordance with LEED standards is environmentally responsible and can lead to significant operating efficiencies. The Company believes that green building techniques such as construction waste management (recycling waste onsite); energy conservation (occupancy sensors associated with lighting and high performance HVAC systems); and improvement of environmental quality (maximization of daylight and use of low-emitting materials) can result in positive environmental results and significant economic returns to tenants in terms of savings in operating costs and improved employee performance.

The Company has also taken significant steps to improve the energy efficiency of the existing buildings in the portfolio. These efforts have included, in various cases: (1) performing lighting retrofits to upgrade older fluorescent bulbs with magnetic ballasts with newer bulbs utilizing electronic ballasts; (2) installing and upgrading building automation systems to provide a greater level of control in order to reduce energy consumed; (3) installing white roof systems designed to lower thermal heat gains associated with traditional black roof surfaces; (4) installing “economizer” fresh air units that allow cooling from outside fresh air on cooler days; (5) implementing common area and parking lot lighting controls designed to increase energy efficiency; and (6) establishing and implementing a green property management guide and green training program for its property management staff.

The Company intends to continue to explore methods of enhancing the performance of the buildings in its existing portfolio.

External Growth Strategies

The Company seeks to enhance its long-term profitability through the development, acquisition and disposition of properties either directly or through joint ventures. The Company also considers acquisitions at an entity level.

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Wholly Owned Properties

Development

The Company pursues attractive development opportunities, focusing primarily on high-quality suburban industrial and office properties within its existing markets. When the Company’s marketing efforts identify opportunities, the Company will consider pursuing opportunities outside of the Company’s established markets. The Company and its Predecessor have developed over 55 million square feet of commercial real estate during the past 35 years. The Company’s development activities generally fall into two categories: build-to-suit projects and projects built for inventory (projects that are less than 75% leased prior to commencement of construction). The Company develops build-to-suit projects for existing and new tenants. The Company also builds properties for inventory where the Company has identified sufficient demand at market rental rates to justify such construction.

During the year ended December 31, 2007, the Company completed seven build-to-suit projects and 18 inventory projects totaling 4.2 million square feet and representing an aggregate Total Investment, as defined below, of $398.5 million. As of December 31, 2007, these completed development properties were 90.4% leased. Additionally, 947,000 square feet of Comcast Center representing $370.9 million of Total Investment was brought into service. The “Total Investment” for a Property is defined as the Property’s purchase price plus closing costs and management’s estimate, as determined at the time of acquisition, of the cost of necessary building improvements in the case of acquisitions, or land costs and land and building improvement costs in the case of development projects, and, where appropriate, other development costs and carrying costs.

As of December 31, 2007 the Company had 27 Wholly Owned Properties under Development, excluding Comcast Center, which are expected to comprise, upon completion, 4.5 million square feet and are expected to represent a Total Investment of $383.1 million. These Wholly Owned Properties under Development were 11.4% pre-leased as of December 31, 2007. The scheduled deliveries of the 4.5 million square feet of Wholly Owned Properties under Development are as follows (in thousands, except percentages):

	Square Feet								Percent Leased			Total
Scheduled In-Service Date	Ind-Dist.		Ind-Flex		Office		Total		December 31, 2007			Investment
1st Quarter 2008		269		34		83		386		68.1	%	$	32,159
3rd Quarter 2008		341		116		—		457		27.2	%		25,578
4th Quarter 2008		963		—		104		1,067		—			65,583
1st Quarter 2009		—		64		126		190		16.7	%		26,534
2nd Quarter 2009		1,020		195		254		1,469		3.1	%		127,873
3rd Quarter 2009		613		—		342		955		5.2	%		105,370
Total		3,206		409		909		4,524		11.4	%	$	383,097

In addition to the above Wholly Owned Properties under Development, the Company is completing the construction of Comcast Center, a 1.25 million square foot office tower in Philadelphia’s central business district. Comcast’s lease is for 1.1 million square feet and is for 15 ¹/2 years. As of December 31, 2007, 300,000 square feet of Comcast Center equaling $124.1 million of Total Investment are included in development in progress. As of December 31, 2007, the building is 97.8% leased. The Comcast Center, which is owned by a joint venture between the Company and an affiliate of Commerzleasing und ImmobilienAG, a wholly owned subsidiary of Commerzbank AG, will upon completion and the satisfaction of certain criteria for sale recognition be reported as a JV Property in Operation. Currently, Comcast Center is included as a Wholly Owned Property under Development and a Wholly Owned Property in Operation, as it was partially brought into service during 2007.

The Company believes that, because it is a fully integrated real estate firm, its base of commercially zoned land in existing industrial and office business parks provides a competitive advantage for future development activities. As of December 31, 2007, the Company owned 1,384 acres of land held for development, substantially all of which is zoned for commercial use. Substantially all of the land is located adjacent to or within existing industrial or business parks with site improvements, such as public sewers, water and utilities, available for service. The Company anticipates that its land holdings would support, as and when developed, 14.1 million square feet of property. The Company’s investment in land held for development as of December 31, 2007 was $247.1 million.

Through a development agreement with Kent County Council, the Company develops commercial buildings in the County of Kent, England and the Company receives a portion of the proceeds from the sale of land parcels to homebuilders. The Company has planning consent for the development of 1.2 million square feet of commercial space and for 750 residential units.

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Acquisitions/Dispositions

The Company seeks to acquire properties consistent with its business objectives and strategies. The Company executes its acquisition strategy by purchasing properties that management believes will create shareholder value over the long-term.

During the year ended December 31, 2007, the Company acquired 23 properties comprising 3.0 million square feet for a Total Investment of $316.6 million.

The Company disposes of properties and land held for development that no longer fit within the Company’s strategic plan, or with respect to which the Company believes it can optimize cash proceeds. During the year ended December 31, 2007, the Company sold 70 operating properties, which contained 5.2 million square feet, and 166 acres of land, for aggregate proceeds of $386.4 million. A substantial portion of the properties sold during this period were in the Michigan market, which was formerly in the Midwest segment.

Joint Venture Properties

The Company, from time to time, considers joint venture opportunities with institutional investors or other real estate companies. Joint venture partnerships provide the Company with additional sources of capital to share investment risk and fund capital requirements. In some instances, joint venture partnerships provide the Company with additional local market or product type expertise. During 2007, the Company entered into two new joint ventures.

On September 10, 2007, the Company entered into a joint venture with Doughty Hanson & Company Real Estate to acquire Blythe Valley Park, West Midlands, UK for $325 million. The park consists of 491,000 square feet of office space and 98 acres of developable land. The Company has a 20% interest in the joint venture.

On October 4, 2007, the Company acquired Republic Property Trust, a Maryland real estate investment trust, and Republic Property Limited Partnership, a Delaware limited partnership and Republic’s operating partnership (together, “Republic”) for $913 million. The acquisition of Republic was completed through the merger of Republic with a wholly owned subsidiary of the Company and the merger of Republic’s operating partnership with the Company’s Operating Partnership. Republic operated a portfolio consisting of 2.4 million square feet of office space, six acres of developable land, and a redevelopment property that, when completed, is expected to contain an additional 176,000 square feet of office space in the Northern Virginia and Washington, D.C. markets.

Concurrently, the Company formed a joint venture with New York State Common Retirement Fund to own and manage the Republic portfolio. The joint venture, in which the Company holds a 25% interest, purchased the Republic real estate assets for $900 million as well as fees from the joint venture for services it provides. The services include property management, leasing, development and administration. The Company may also receive a promoted interest if certain return thresholds are met. The acquisition of Republic resulted in the Company recording $13 million in goodwill and other intangibles.

As of December 31, 2007, the Company had investments in and advances to unconsolidated joint ventures totaling $278.4 million.

Development

During the year ended December 31, 2007, unconsolidated joint ventures in which the Company held an interest completed two build-to-suit projects and one inventory project totaling 1.1 million square feet and representing a Total Investment of $53.4 million. As of December 31, 2007, these completed development properties were 100% leased. In addition, unconsolidated joint ventures in which the Company has an interest had four JV Properties under Development at December 31, 2007 which are expected to comprise, upon completion, 527,000 leaseable square feet and are expected to represent a Total Investment of $170.3 million. These JV Properties under Development were 17.4% leased as of December 31, 2007.

As of December 31, 2007, unconsolidated joint ventures in which the Company has an interest owned 715 acres of land held for development, substantially all of which is zoned for commercial use. Substantially all of the land is located adjacent to or within existing industrial or business parks with site improvements, such as public sewers, water and utilities, available for service. The Company anticipates that its joint venture land holdings would support, as and when developed, 7.1 million square feet of property.

Acquisitions/Dispositions

During the year ended December 31, 2007, an unconsolidated joint venture in which the Company has an interest acquired four properties comprising 1.2 million square feet for $70.6 million.

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During the year ended December 31, 2007, an unconsolidated joint venture in which the Company has an interest sold one property which contained 25,000 square feet of leaseable space for $1.3 million.

ITEM 1A. RISK FACTORS

The Company’s results of operations and the ability to make distributions to our shareholders and pay debt service on our indebtedness may be affected by the risk factors set forth below. (The Company refers to itself as “we”, “us” or “our” in the following risk factors.) This section contains some forward looking statements. You should refer to the explanation of the qualifications and limitations on forward-looking statements on page 4.

Risks Related to Our Business

Unfavorable events affecting our existing tenants, or negative market conditions that may affect our existing tenants, could have an adverse impact on our ability to attract new tenants, relet space, collect rent or renew leases, and thus could have a negative effect on our cash flow from operations and inhibit growth.

Our cash flow from operations depends on our ability to lease space to tenants on economically favorable terms. Therefore, we could be adversely affected by various facts and events over which we have limited control, such as:

• lack of demand for space in the areas where our Properties are located

• inability to retain existing tenants and attract new tenants

• oversupply of or reduced demand for space and changes in market rental rates

• defaults by our tenants or their failure to pay rent on a timely basis

• the need to periodically renovate and repair our space

• physical damage to our Properties

• economic or physical decline of the areas where our Properties are located

• potential risk of functional obsolescence of our Properties over time

At any time, any of our tenants may experience a downturn in its business that may weaken its financial condition. As a result, a tenant may delay lease commencement, fail to make rental payments when due, decline to extend a lease upon its expiration, become insolvent or declare bankruptcy. Any tenant bankruptcy or insolvency, leasing delay or failure to make rental payments when due could result in the termination of the tenant’s lease and material losses to our Company.

If our tenants do not renew their leases as they expire, we may not be able to rent the space. Furthermore, leases that are renewed, and some new leases for space that is relet, may have terms that are less economically favorable to us than current lease terms, or may require us to incur significant costs, such as for renovations, tenant improvements or lease transaction costs.

Any of these events could adversely affect our cash flow from operations and our ability to make expected distributions to our shareholders and service our indebtedness.

A significant portion of our costs, such as real estate taxes, insurance costs, and debt service payments, generally are not reduced when circumstances cause a decrease in cash flow from our Properties.

We may not be able to compete successfully with other entities that operate in our industry.

We experience a great deal of competition in attracting tenants for our Properties and in locating land to develop and properties to acquire.

In our effort to lease our Properties, we compete for tenants with a broad spectrum of other landlords in each of our markets. These competitors include, among others, publicly-held REITs, privately-held entities, individual property owners and tenants who wish to sublease their space. Some of these competitors may be able to offer prospective tenants more attractive financial or other terms than we are able to offer.

We may experience increased operating costs, which could adversely affect our operations.

Our Properties are subject to increases in operating expenses such as insurance, cleaning, electricity, heating, ventilation and air conditioning, general and administrative costs and other costs associated with security, landscaping, repairs and maintenance. While our current tenants generally are obligated to pay a significant portion of these costs, there is no assurance that these tenants will make such payments or agree to pay these costs upon renewal or that new tenants will agree to pay these costs. If operating expenses increase in our markets, we may not be able to increase rents or reimbursements in all of these markets so as to meet increased expenses without at the

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same time decreasing occupancy rates. If this occurs, our ability to make distributions to shareholders and service our indebtedness could be adversely affected.

Our ability to achieve growth in operating income depends in part on our ability to develop properties, which may suffer under certain circumstances.

We intend to continue to develop properties where warranted by market conditions. We have a number of ongoing development projects and a number of land projects being readied for development.

Additionally, our general construction and development activities include the risks that:

• construction and leasing of a property may not be completed on schedule, which could result in increased expenses and construction costs, and would result in reduced profitability

• construction costs may exceed our original estimates due to increases in interest rates and increased materials, labor or other costs, possibly making the property unprofitable because we may not be able to increase rents to compensate for the increase in construction costs

• some developments may fail to achieve expectations, possibly making them unprofitable

• we may be unable to obtain, or may face delays in obtaining, required zoning, land-use, building, occupancy, and other governmental permits and authorizations, which could result in increased costs and could require us to abandon our activities entirely with respect to a project

• we may abandon development opportunities after we begin to explore them and as a result, we may fail to recover costs already incurred. If we alter or discontinue our development efforts, past and future costs of the investment may need to be expensed rather than capitalized and we may determine the investment is impaired, resulting in a loss

• we may expend funds on and devote management’s time to projects that we do not complete

• occupancy rates and rents at newly completed properties may fluctuate depending on a number of factors, including market and economic conditions, and may result in lower than projected rental rates with the result that our investment is not profitable

We face risks associated with property acquisitions.

We acquire individual properties and portfolios of properties, in some cases through the acquisition of operating entities, and intend to continue to do so. Our acquisition activities and their success are subject to the following risks:

• when we are able to locate a desirable property, competition from other real estate investors may significantly increase the purchase price

• acquired properties may fail to perform as expected

• the actual costs of repositioning or redeveloping acquired properties may be higher than our estimates

• acquired properties may be located in new markets where we face risks associated with an incomplete knowledge or understanding of the local market, a limited number of established business relationships in the area and a relative unfamiliarity with local governmental and permitting procedures

• we may be unable to quickly and efficiently integrate new acquisitions, particularly acquisitions of portfolios of properties and operating entities, into our existing operations, and as a result, our results of operations and financial condition could be adversely affected

We may acquire properties subject to liabilities and without any recourse, or with only limited recourse, with respect to unknown liabilities. As a result, if a liability were asserted against us based upon ownership of those properties, we might have to pay substantial sums to settle it, which could adversely affect our cash flow.

Many of our Properties are concentrated in our primary markets, and we therefore may suffer economic harm as a result of adverse conditions in those markets.

Our Properties are located principally in specific geographic areas. Due to the concentration of our Properties in these areas, performance is dependent on economic conditions in these areas. These areas have experienced periods of economic decline.

Certain of the Company’s tenants are engaged in various aspects of the residential mortgage industry, which is currently experiencing a dramatic downturn, and therefore, we may suffer economic harm if this downturn weakens these tenants’ financial condition.

Approximately three percent of our tenants are engaged in various aspects of the residential mortgage industry. The residential mortgage industry is currently experiencing a dramatic downturn. This downturn may weaken a tenant’s financial condition. As a result, a tenant may delay lease commencement, fail to make rental payments when due, decline to extend a lease upon its expiration, become insolvent or declare bankruptcy. Any tenant bankruptcy or

10

insolvency, leasing delay or failure to make payments when due could result in the termination of a tenant’s lease and material losses to the Company.

We may not be able to access financial markets to obtain capital on a timely basis, or on acceptable terms.

In order to qualify as a REIT for federal income tax purposes, we are required to distribute at least 90% of our taxable income to shareholders each year, and thus cannot reinvest this portion of income in the business. As a result, we rely on proceeds from property dispositions and third party capital sources for a portion of our capital needs, including capital for acquisitions and development. The public debt and equity markets are among the sources we rely on. There is no guarantee that we will be able to access these markets, or any other source of capital, on attractive terms or at all. The ability to access the public debt and equity markets depends on a variety of factors, including:

• general economic conditions affecting these markets

• our own financial structure and performance

• the market’s opinion of REITs in general

• the market’s opinion of REITs that own properties similar to ours

We may suffer adverse effects as a result of the terms of and covenants relating to our indebtedness.

Required payments on our indebtedness generally are not reduced if the economic performance of the portfolio declines. If the economic performance declines, net income, cash flow from operations and cash available for distribution to shareholders will be reduced. If payments on debt cannot be made, we could sustain a loss, or in the case of mortgages, suffer foreclosures by mortgagees or suffer judgments. Further, some obligations, including our $600 million credit facility and $2.2 billion in unsecured notes issued in past public offerings, contain cross-default and/or cross-acceleration provisions, as does $42.0 million in outstanding mortgage indebtedness at December 31, 2007, which means that a default on one obligation may constitute a default on other obligations.

We anticipate that only a small portion of the principal of our debt will be repaid prior to maturity. Therefore, we generally need to refinance our outstanding debt as it matures. There is a risk that we may not be able to refinance existing debt or that the terms of any refinancing will not be as favorable as the terms of our existing debt. If principal payments due at maturity cannot be refinanced, extended or repaid with proceeds from other sources, such as the proceeds of sales of assets or new equity securities, our cash flow will not be sufficient to repay all maturing debt in years when significant “balloon” payments come due.

Our credit facility and unsecured debt securities contain customary restrictions, requirements and other limitations on our ability to incur indebtedness, including total debt to asset ratios, secured debt to total asset ratios, debt service coverage ratios and minimum ratios of unencumbered assets to unsecured debt which we must maintain. Our continued ability to borrow under our $600 million credit facility is subject to compliance with our financial and other covenants. In addition, our failure to comply with such covenants could cause a default under this credit facility, and we may then be required to repay such debt with capital from other sources. Under those circumstances, other sources of capital may not be available to us, or be available only on unattractive terms.

Our degree of leverage could limit our ability to obtain additional financing or affect the market price of our common stock.

Our degree of leverage could affect our ability to obtain additional financing for working capital, capital expenditures, acquisitions, development or other general corporate purposes. Our senior unsecured debt is currently rated investment grade by the three major rating agencies. However, there can be no assurance we will be able to maintain this rating, and in the event our senior debt is downgraded from its current rating, we would likely incur higher borrowing costs. Our degree of leverage could also make us more vulnerable to a downturn in business or the economy generally.

Further issuances of equity securities may be dilutive to current shareholders.

The interests of our existing shareholders could be diluted if we issue additional equity securities to finance future developments, acquisitions, or repay indebtedness. Our Board of Trustees can authorize the issuance of additional securities without shareholder approval. Our ability to execute our business strategy depends on our access to an appropriate blend of debt financing, including unsecured lines of credit and other forms of secured and unsecured debt, and equity financing, including issuances of common and preferred equity.

An increase in interest rates would increase our interest costs on variable rate debt and could adversely impact our ability to refinance existing debt.

We currently have, and may incur more, indebtedness that bears interest at variable rates. Accordingly, if interest rates increase, so will our interest costs, which would adversely affect our cash flow and our ability to pay principal

11

and interest on our debt and our ability to make distributions to our shareholders. Further, rising interest rates could limit our ability to refinance existing debt when it matures.

Property ownership through joint ventures will limit our ability to act exclusively in our interests.

From time to time we invest in joint ventures in which we do not hold a controlling interest. These investments involve risks that do not exist with properties in which we own a controlling interest, including the possibility that our partners may, at any time, have business, economic or other objectives that are inconsistent with our objectives. In instances where we lack a controlling interest, our partners may be in a position to require action that is contrary to our objectives. While we seek to negotiate the terms of these joint ventures in a way that secures our ability to act in our best interests, there can be no assurance that those terms will be sufficient to fully protect us against actions contrary to our interests. If the objectives of our co-ventures are inconsistent with ours, we may not in every case be able to act exclusively in our interests.

Risks Related to the Real Estate Industry

Real estate investments are illiquid, and we may not be able to sell our Properties if and when we determine it is appropriate to do so.

Real estate generally cannot be sold quickly. We may not be able to dispose of Properties promptly in response to economic or other conditions. In addition, provisions of the Internal Revenue Code of 1986, as amended (the “Code”) limit a REIT’s ability to sell properties in some situations when it may be economically advantageous to do so, thereby adversely affecting returns to shareholders and adversely impacting our ability to meet our obligations to the holders of other securities.

We may experience economic harm if any damage to our Properties is not covered by insurance.

We believe all of our Properties are adequately insured. However, we cannot guarantee that the limits of our current policies will be sufficient in the event of a catastrophe to our Properties. Our existing property and liability policies expire during 2008. We cannot guarantee that we will be able to renew or duplicate our current coverages in adequate amounts or at reasonable prices.

We may suffer losses that are not covered under our comprehensive liability, fire, extended coverage and rental loss insurance policies. For example, we may not be insured for losses resulting from acts of war, certain acts of terrorism, or from environmental liabilities. If an uninsured loss or a loss in excess of insured limits should occur, we would nevertheless remain liable for the loss which could adversely affect cash flow from operations.

Potential liability for environmental contamination could result in substantial costs.

Under federal, state and local environmental laws, ordinances and regulations, we may be required to investigate and clean up the effects of releases of hazardous or toxic substances or petroleum products at our Properties simply because of our current or past ownership or operation of the real estate. If unidentified environmental problems arise, we may have to make substantial payments which could adversely affect our cash flow and our ability to make distributions to our shareholders because:

• as owner or operator, we may have to pay for property damage and for investigation and clean-up costs incurred in connection with the contamination

• the law typically imposes clean-up responsibility and liability regardless of whether the owner or operator knew of or caused the contamination

• even if more than one person may be responsible for the contamination, each person who shares legal liability under the environmental laws may be held responsible for all of the clean-up costs

• governmental entities and third parties may sue the owner or operator of a contaminated site for damages and costs

These costs could be substantial. The presence of hazardous or toxic substances or petroleum products or the failure to properly remediate contamination may materially and adversely affect our ability to borrow against, sell or rent an affected property. In addition, applicable environmental laws create liens on contaminated sites in favor of the government for damages and costs it incurs in connection with a contamination. Changes in laws increasing the potential liability for environmental conditions existing at our Properties may result in significant unanticipated expenditures.

It is our policy to retain independent environmental consultants to conduct Phase I environmental site assessments and asbestos surveys with respect to our acquisition of properties. These assessments generally include a visual inspection of the properties and the surrounding areas, an examination of current and historical uses of the properties and the surrounding areas and a review of relevant state, federal and historical documents, but do not involve invasive

12

techniques such as soil and ground water sampling. Where appropriate, on a property-by-property basis, our practice is to have these consultants conduct additional testing, including sampling for asbestos, for lead in drinking water, for soil contamination where underground storage tanks are or were located or where other past site usages create a potential environmental problem, and for contamination in groundwater. Even though these environmental assessments are conducted, there is still the risk that:

• the environmental assessments and updates will not identify all potential environmental liabilities

• a prior owner created a material environmental condition that is not known to us or the independent consultants preparing the assessments

• new environmental liabilities have developed since the environmental assessments were conducted

• future uses or conditions such as changes in applicable environmental laws and regulations could result in environmental liability for us

While we test indoor air quality on a regular basis and have an ongoing maintenance program in place to address this aspect of property operations, inquiries about indoor air quality may necessitate special investigation and, depending on the results, remediation. Indoor air quality issues can stem from inadequate ventilation, chemical contaminants from indoor or outdoor sources, pollen, viruses and bacteria. Indoor exposure to chemical or biological contaminants above certain levels can be alleged to be connected to allergic reactions or other health effects and symptoms in susceptible individuals. If these conditions were to occur at one of our Properties, we may need to undertake a targeted remediation program, including without limitation, steps to increase indoor ventilation rates and eliminate sources of contaminants. Such remediation programs could be costly, necessitate the temporary relocation of some or all of the Property’s tenants or require rehabilitation of the affected Property.

Our Properties may contain or develop harmful mold, which could lead to liability for adverse health effects and costs of remediating the problem.

When excessive moisture accumulates in buildings or on building materials, mold growth may occur, particularly if the moisture problem remains undiscovered or is not addressed over a period of time. Some molds may produce airborne toxins or irritants. Concern about indoor exposure to mold has been increasing as exposure to mold may cause a variety of adverse health effects and symptoms, including allergic or other reactions. As a result, the presence of significant mold at any of our Properties could require us to undertake a costly remediation program to contain or remove the mold from the affected Property. In addition, the presence of significant mold could expose us to liability from our tenants, employees of our tenants and others if property damage or health concerns arise.

Compliance with the Americans with Disabilities Act and fire, safety and other regulations may require us to make expenditures that adversely impact our operating results.

All of our Properties are required to comply with the Americans with Disabilities Act (“ADA”). The ADA generally requires that buildings be made accessible to people with disabilities. Compliance with the ADA requirements could require removal of access barriers, and non-compliance could result in imposition of fines by the United States government or an award of damages to private litigants, or both. Expenditures related to complying with the provisions of the ADA could adversely affect our results of operations and financial condition and our ability to make distributions to shareholders. In addition, we are required to operate our Properties in compliance with fire and safety regulations, building codes and other land use regulations, as they may be adopted by governmental agencies and bodies and become applicable to our Properties. We may be required to make substantial capital expenditures to comply with those requirements and these expenditures could have a material adverse effect on our operating results and financial condition, as well as our ability to make distributions to shareholders.

Terrorist attacks and other acts of violence or war may adversely impact our operating results and may affect markets on which our securities are traded.

Terrorist attacks against our Properties, or against the United States or United States interests generally, may negatively affect our operations and investments in our securities. Attacks or armed conflicts could have a direct adverse impact on our Properties or operations through damage, destruction, loss or increased security costs. Any terrorism insurance that we obtain may be insufficient to cover the loss for damages to our Properties as a result of terrorist attacks.

Furthermore, any terrorist attacks or armed conflicts could result in increased volatility in or damage to the United States and worldwide financial markets and economy. Adverse economic conditions could affect the ability of our tenants to pay rent, which could have an adverse impact on our operating results.

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Risks Related to Our Organization and Structure

We have elected REIT status under the federal tax laws, and could suffer adverse consequences if we fail to qualify as a REIT.

We have elected REIT status under federal tax laws and have taken the steps known to us to perfect that status, but we cannot be certain that we qualify, or that we will remain qualified. Qualification as a REIT involves the application of highly technical and complex provisions of the Code, as to which there are only limited judicial or administrative interpretations. The complexity of these provisions and of the related income tax regulations is greater in the case of a REIT that holds its assets in partnership form, as we do. Moreover, no assurance can be given that new tax laws will not significantly affect our qualification as a REIT or the federal income tax consequences of such qualification. New laws could be applied retroactively, which means that past operations could be found to be in violation, which would have a negative effect on the business.

If we fail to qualify as a REIT in any taxable year, the distributions to shareholders would not be deductible when computing taxable income. If this happened, we would be subject to federal income tax on our taxable income at regular corporate rates. Also, we could be prevented from qualifying as a REIT for the four years following the year in which we were disqualified. Further, if we requalified as a REIT after failing to qualify, we might have to pay the full corporate-level tax on any unrealized gain in our assets during the period we were not qualified as a REIT. We would then have to distribute to our shareholders the earnings we accumulated while we were not qualified as a REIT. These additional taxes would reduce our funds available for distribution to our shareholders. In addition, while we were disqualified as a REIT, we would not be required by the Code to make distributions to our shareholders. A failure by the Company to qualify as a REIT and the resulting requirement to pay taxes and interest (and perhaps penalties) would cause us to default under various agreements to which we are a party, including under our credit facility, and would have a material adverse effect on our business, prospects, results of operations, earnings, financial condition and our ability to make distributions to shareholders.

Future economic, market, legal, tax or other considerations may lead our Board of Trustees to authorize the revocation of our election to qualify as a REIT. A revocation of our REIT status would require the consent of the holders of a majority of the voting interests of all of our outstanding Common Shares.

Risks associated with potential borrowings necessary to make distributions to qualify as a REIT.

We intend to make distributions to shareholders to comply with the distribution provisions of the Code necessary to maintain qualification as a REIT and to avoid income taxes and the non-deductible excise tax. Under certain circumstances, we may be required to borrow funds to meet the distribution requirements necessary to achieve the tax benefits associated with qualifying as a REIT. In such circumstances, we might need to borrow funds to avoid adverse tax consequences, even if our management believes that the prevailing market conditions are not generally favorable for such borrowings or that such borrowings would not be advisable in the absence of such tax considerations.

Certain officers of the Trust may not have the same interests as shareholders as to certain tax laws.

Certain officers of the Trust own Common Units. These units may be exchanged for our Common Shares. The officers who own those units and have not yet exchanged them for our Common Shares may suffer different and more adverse tax consequences than holders of our Common Shares suffer in certain situations:

• when certain of our Properties are sold

• when debt on those Properties is refinanced

• if we are involved in a tender offer or merger

Because these officers own units and face different consequences than shareholders do, the Trust and those officers may have different objectives as to these transactions than shareholders do.

Certain aspects of our organization could have the effect of restricting or preventing a change of control of our Company, which could have an adverse effect on the price of our shares.

Our charter contains an ownership limit on shares. To qualify as a REIT, five or fewer individuals cannot own, directly or indirectly, more than 50% in value of the outstanding shares of beneficial interest. To this end, our Declaration of Trust, among other things, generally prohibits any holder of the Trust’s shares from owning more than 5% of the Trust’s outstanding shares of beneficial interest, unless that holder gets the consent from the Board of Trustees. This limitation could prevent the acquisition of control of the Company by a third party without the consent from the Board of Trustees.

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We have a staggered board and certain restrictive nominating procedures. The Board of Trustees has three classes of trustees. The term of office of one class expires each year. Trustees for each class are elected for three-year terms as that class’ term expires. The terms of the Class II, Class III, and Class I trustees expire in 2008, 2009, and 2010, respectively. Any nominee for trustee must be selected under the nominating provisions contained in our Declaration of Trust and By-Laws. The staggered terms for trustees and the nominating procedures may affect shareholders’ ability to take control of the Company, even if a change in control were in the shareholders’ interest.

We can issue preferred shares. Our Declaration of Trust authorizes the Board of Trustees to establish the preferences and rights of any shares issued. The issuance of preferred shares could have the effect of delaying, making more difficult or preventing a change of control of the Company, even if a change in control were in the shareholder’s interest.

There are limitations on acquisition of and changes in control pursuant to, and fiduciary protections of The Board under Maryland law. The Maryland General Corporation Law (“MGCL”) contains provisions which are applicable to the Trust as if the Trust were a corporation. Among these provisions is a section, referred to as the “control share acquisition statute,” which eliminates the voting rights of shares acquired in quantities so as to constitute “control shares,” as defined under the MGCL. The MGCL also contains provisions applicable to us that are referred to as the “business combination statute,” which would generally limit business combinations between the Company and any 10% owners of the Trust’s shares or any affiliate thereof. Further, Maryland law provides broad discretion to the Board with respect to its fiduciary duties in considering a change in control of our Company, including that the Board is subject to no greater level of scrutiny in considering a change in control transaction than with respect to any other act by the Board. Finally, the “unsolicited takeovers” provisions of the MGCL permit the Board, without shareholder approval and regardless of what is currently provided in our Declaration of Trust or By-Laws, to implement takeover defenses that our Company does not yet have, including: permitting only the Board to fix the size of the Board and permitting only the Board to fill a vacancy on the Board. All of these provisions may have the effect of inhibiting a third party from making an acquisition proposal for our Company or of delaying, deferring or preventing a change in control of the Company under circumstances that otherwise could provide the holders of Common Shares with the opportunity to realize a premium over the then current market price.

Various factors out of our control could hurt the market value of our publicly traded securities.

General market conditions could worsen. The value of our publicly traded securities depends on various market conditions, which may change from time to time. In addition to general economic and market conditions and our particular financial condition and performance, the value of our publicly traded securities could be affected by, among other things, the extent of institutional investor interest in us and the market’s opinion of REITs in general and, in particular, REITs that own and operate properties similar to ours.

The market value of the equity securities of a REIT may be based primarily upon the market’s perception of the REITs growth potential and its current and future cash distributions, and may be secondarily based upon the real estate market value of the underlying assets. The failure to meet the market’s expectations with regard to future earnings and cash distributions likely would adversely affect the market price of publicly traded securities.

Rising market interest rates could make an investment in publicly traded securities less attractive. If market interest rates increase, purchasers of publicly traded securities may demand a higher annual yield on the price they pay for their securities. This could adversely affect the market price of publicly traded securities.

We no longer have a Shareholder Rights Plan but are not precluded from adopting one.

Our shareholder rights plan expired in accordance with its terms on December 31, 2007. While we did not extend or renew the plan, we are not prohibited from adopting, without shareholder approval, a shareholder rights plan that may discourage any potential acquirer from acquiring more than a specific percentage of our outstanding common shares since, upon this type of acquisition without approval of our board of trustees, all other common shareholders would have the right to purchase a specified amount of common shares at a substantial discount from market price.

Transactions by the Trust or the Operating Partnership could adversely affect debt holders.

Except with respect to several covenants limiting the incurrence of indebtedness and a covenant requiring the Operating Partnership to maintain a certain unencumbered total asset value, our indentures do not contain any additional provisions that would protect holders of the Operating Partnership’s debt securities in the event of (i) a highly leveraged transaction involving the Operating Partnership, (ii) a change of control or (iii) certain reorganizations, restructurings, mergers or similar transactions involving the Operating Partnership or the Trust.

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ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

The Wholly Owned Properties in Operation, as of December 31, 2007, consisted of 353 industrial and 296 office properties. Single tenants completely occupy 198 Wholly Owned Properties in Operation. These tenants generally require a reduced level of service in connection with the operation or maintenance of these properties. The remaining 451 of the Company’s Wholly Owned Properties in Operation are multi-tenant properties for which the Company renders a range of building, operating and maintenance services.

As of December 31, 2007, the industrial Wholly Owned Properties in Operation were 93.3% leased. The average building size for the industrial Wholly Owned Properties in Operation was approximately 112,000 square feet. As of December 31, 2007, the office Wholly Owned Properties in Operation were 91.8% leased. The average building size for the office Wholly Owned Properties in Operation was approximately 76,000 square feet.

The JV Properties in Operation, as of December 31, 2007, consisted of 44 industrial and 47 office properties. Single tenants completely occupy 46 JV Properties in Operation. These tenants generally require a reduced level of service in connection with the operation or maintenance of these properties. The remaining 45 of the Company's JV Properties in Operation are multi-tenant properties for which the Company renders a range of building, operating and maintenance services.

As of December 31, 2007, the industrial JV Properties in Operation were 93.7% leased. The average building size for the industrial JV Properties in Operation was approximately 186,000 square feet. As of December 31, 2007, the office JV Properties in Operation were 93.7% leased. The average building size for the office JV Properties in Operation was approximately 70,000 square feet.

A complete listing of the Wholly Owned Properties in Operation appears as Schedule III to the financial statements of the Company included in this report. The table below sets forth certain information on the Company’s Properties in Operation as of December 31, 2007 (in thousands, except percentages).

	Type		Net Rent (1)		Square Feet		% Leased
Delaware Valley	Industrial	-Distribution	$	6,455		781		97.1	%
		-Flex		26,642		2,671		92.2	%
	Office			119,350		9,082		90.2	%
	Total			152,447		12,534		91.0	%
Midwest	Industrial	-Distribution		55,422		13,945		98.5	%
		-Flex		29,901		3,909		93.2	%
	Office			38,309		3,254		94.9	%
	Total			123,632		21,108		97.0	%
Mid-Atlantic	Industrial	-Distribution		30,734		8,142		90.4	%
		-Flex		9,054		1,187		87.0	%
	Office			59,472		4,617		95.1	%
	Total			99,260		13,946		91.6	%
Florida	Industrial	-Distribution		20,282		5,048		91.6	%
		-Flex		28,392		3,738		87.5	%
	Office			45,032		3,526		93.9	%
	Total			93,706		12,312		91.0	%
Arizona	Industrial	-Distribution		604		227		35.4	%
		-Flex		—		—		—
	Office			9,493		871		65.5	%
	Total			10,097		1,098		59.3	%
Philadelphia	Industrial	-Distribution		—		—		—
		-Flex		—		—		—
	Office			8,894		947		100.0	%
	Total			8,894		947		100.0	%
United Kingdom	Industrial	-Distribution		—		—		—
		-Flex		1,564		44		100.0	%
	Office			1,366		90		60.6	%
	Total			2,930		134		73.5	%
TOTAL	Industrial	-Distribution		113,497		28,143		94.4	%
		-Flex		95,553		11,549		90.5	%
	Office			281,916		22,387		91.8	%
	Total		$	490,966		62,079		92.7	%
Joint Ventures (2)	Industrial	-Distribution		28,663		8,020		93.8	%
		-Flex		5,155		171		89.4	%
	Office			70,218		3,271		93.7	%
	Total			104,036		11,462		93.7	%

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(1)	Net rent represents the contractual rent per square foot times the tenant’s square feet leased at December 31, 2007 for tenants in occupancy. Net rent does not include the tenant’s obligation to pay property operating expenses and real estate taxes.
(2)	Joint Ventures represent the 91 properties owned by unconsolidated joint ventures in which the Company has an interest.

The expiring square feet and annual rent by year for the Properties in Operation as of December 31, 2007 are as follows (in thousands):

Total Properties in Operation

Wholly Owned Properties in Operation:

	Industrial-
	Distribution				Industrial-Flex				Office				Total
	Square		Annual		Square		Annual		Square		Annual		Square		Annual
Year	Feet		Rent		Feet		Rent		Feet		Rent		Feet		Rent
2008		3,230	$	13,295		1,590	$	14,642		1,816	$	26,094		6,636	$	54,031
2009		3,422		16,312		1,823		17,218		2,766		40,966		8,011		74,496
2010		3,061		14,809		1,644		15,472		2,854		40,864		7,559		71,145
2011		2,727		12,544		1,128		11,490		2,057		31,941		5,912		55,975
2012		4,612		22,824		1,467		14,347		2,739		43,724		8,818		80,895
2013		1,199		6,189		877		9,390		2,164		35,740		4,240		51,319
Thereafter		8,307		43,659		1,929		23,560		6,152		128,154		16,388		195,373
Total		26,558	$	129,632		10,458	$	106,119		20,548	$	347,483		57,564	$	583,234

Joint Venture Properties in Operation:

	Industrial-
	Distribution				Industrial-Flex				Office				Total
	Square		Annual		Square		Annual		Square		Annual		Square		Annual
Year	Feet		Rent		Feet		Rent		Feet		Rent		Feet		Rent
2008		1,288	$	5,072		9	$	301		331	$	7,682		1,628	$	13,055
2009		689		2,625		11		320		546		12,528		1,246		15,473
2010		965		3,976		19		695		348		8,288		1,332		12,959
2011		650		2,761		11		374		445		11,264		1,106		14,399
2012		551		2,287		63		2,123		180		5,254		794		9,664
2013		492		2,040		—		—		212		4,315		704		6,355
Thereafter		2,890		14,475		39		1,355		1,002		29,329		3,931		45,159
Total		7,525	$	33,236		152	$	5,168		3,064	$	78,660		10,741	$	117,064

Properties in Operation:

	Industrial-
	Distribution				Industrial-Flex				Office				Total
	Square		Annual		Square		Annual		Square		Annual		Square		Annual
Year	Feet		Rent		Feet		Rent		Feet		Rent		Feet		Rent
2008		4,518	$	18,367		1,599	$	14,943		2,147	$	33,776		8,264	$	67,086
2009		4,111		18,937		1,834		17,538		3,312		53,494		9,257		89,969
2010		4,026		18,785		1,663		16,167		3,202		49,152		8,891		84,104
2011		3,377		15,305		1,139		11,864		2,502		43,205		7,018		70,374
2012		5,163		25,111		1,530		16,470		2,919		48,978		9,612		90,559
2013		1,691		8,229		877		9,390		2,376		40,055		4,944		57,674
Thereafter		11,197		58,134		1,968		24,915		7,154		157,483		20,319		240,532
Total		34,083	$	162,868		10,610	$	111,287		23,612	$	426,143		68,305	$	700,298

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The table below highlights, for the Properties in Operation, the Company’s top ten office tenants and top ten industrial tenants as of December 31, 2007.

	Percentage				Percentage
Top 10 Office Tenants	of Net Rent			Top 10 Industrial Tenants	of Net Rent
The Vanguard Group, Inc		3.3	%	Kellogg USA, Inc.		0.9	%
United States of America		2.5	%	Wakefern Food Corporation		0.8	%
GlaxoSmithKline		1.8	%	United Parcel Services, Inc.		0.7	%
General Motors Acceptance Corporation		1.5	%	Amazon.com, Inc.		0.5	%
Comcast Corporation		1.5	%	Centocor, Inc.		0.5	%
PHH Corporation		1.0	%	Dial Corporation		0.5	%
Sanofi-Aventis U.S., Inc.		0.9	%	LTD Commodities, Inc.		0.4	%
PNC Bank, National Association		0.9	%	Uline, Inc.		0.4	%
Well Care Health Plans, Inc.		0.8	%	Moore Wallace North America, Inc.		0.4	%
Express Scripts		0.8	%	UTI Integrated Logistics		0.4	%
		15.0	%			5.5	%

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ITEM 3. LEGAL PROCEEDINGS

The Company has been substituted for Republic as a party to certain litigation as a result of the Company’s acquisition of Republic on October 4, 2007. The litigation is summarized below. The litigation arises out of a dispute between Republic and certain parties, two of whom were members of Republic’s Board of Trustees and “founders” of Republic. The dispute includes claims arising from the termination of a development arrangement in West Palm Beach, Florida and an attempt by Republic to acquire a certain office property from an entity controlled by the aforementioned related parties pursuant to an option agreement entered into at the time of Republic’s formation.

On November 17, 2006, Republic disclosed in a Form 8-K that Steven A. Grigg, its President and Chief Development Officer, had notified it that he was terminating his employment, purportedly for “good reason,” as such term is defined in his employment agreement, dated December 20, 2005. Mr. Grigg also asserted that, as a result of such termination, he was entitled to the severance payments provided for under the terms of the employment agreement. The cash portion of such severance payments could be valued at up to approximately $1.8 million. The Company disagrees with Mr. Grigg that there is a basis for termination by Mr. Grigg for good reason; therefore, we believe that Mr. Grigg terminated his employment without good reason as of November 13, 2006, the date of his termination letter. Accordingly, we believe that no severance payments are due and we have not remitted any such payments to Mr. Grigg under the terms of his employment agreement.

On December 22, 2006, Mr. Grigg filed a lawsuit against Republic in the Superior Court of the District of Columbia. Mr. Grigg alleges, among other things, that (i) Republic breached his employment agreement, (ii) Republic breached its duties of good faith and fair dealing and (iii) the Noncompetition Agreement dated December 20, 2005 between Mr. Grigg and Republic is unenforceable and void. Mr. Grigg seeks, among other remedies, (i) the severance payment allegedly due under the employment agreement, (ii) other damages in an amount to be finally determined at trial and (iii) the voiding of the Noncompetition Agreement. The Company believes that Mr. Grigg’s lawsuit is without merit, generally denies the allegations in the complaint and denies that Mr. Grigg is entitled to any of the relief sought in his complaint. Republic originally asserted various counterclaims against Mr. Grigg, including claims for common law fraud, state securities fraud, breach of his employment agreement, breach of fiduciary duties and unjust enrichment. Republic subsequently voluntarily dismissed without prejudice its common law fraud, state securities fraud and unjust enrichment claims in order to pursue those claims in the litigation described below pending in the United States District Court for the District of Columbia. The Company’s counterclaims against Mr. Grigg for breach of his employment agreement and breach of his fiduciary duties remain pending in the District of Columbia Superior Court litigation. On March 30, 2007, the Court denied, in its entirety, Mr. Grigg’s motion to dismiss these counterclaims. The Company seeks damages and other appropriate relief on these counterclaims.

On March 6, 2007, Mr. Richard Kramer, Republic’s former Non-executive Chairman of the Board, filed a lawsuit against Republic in the United States District Court for the District of Maryland Southern Division, in which he seeks advancement for legal fees incurred by him purportedly in connection with an independent counsel’s investigation with respect to certain matters involving Republic’s course of dealing in a West Palm Beach development project, as well as those fees incurred in filing and prosecuting this lawsuit. On May 3, 2007, Mr. Kramer voluntarily dismissed this case, and filed an almost identical lawsuit against Republic in the Circuit Court of Baltimore County, Maryland. We believe that Mr. Kramer’s lawsuit is without merit and filed a motion to dismiss or, in the alternative, motion for summary judgment, seeking the dismissal of Mr. Kramer’s lawsuit. Mr. Kramer filed a motion for summary judgment against the Company. On November 2, 2007 the Court denied Mr. Kramer’s motion for summary judgment and granted the Company’s motion to dismiss. Mr. Kramer has appealed the Court’s judgment.

On March 28, 2007, Republic filed a lawsuit against Messrs. Kramer and Grigg and Republic Properties Corporation in the United States District Court of the District of Columbia. This lawsuit asserts, among other things, claims against (i) all three defendants for (a) federal and state securities fraud and (b) common law fraud; (ii) Messrs. Kramer and Grigg for (a) federal and state control person liability and (b) unjust enrichment; and (iii) Republic Properties Corporation for (a) breach of contract and (b) indemnification. The Company seeks, among other remedies, (i) damages in an amount not less than $1.2 million, the approximate value (at the time of issuance) of the partnership units issued by Republic Property Limited Partnership to Republic Properties Corporation in connection with the West Palm Beach City Center Development Contribution Agreement, (ii) additional damages incurred by us as a result of the termination of the West Palm Beach Professional Services Agreement, (iii) recovery of the costs, including attorneys fees, associated with a previously-disclosed independent investigation, (iv) reimbursement for Republic’s expenses in this litigation, including attorneys’ fees, and (v) other damages, including punitive damages, in an amount to be finally determined at trial. On April 27, 2007, Republic filed an Amended Complaint in the District of Columbia District Court action, adding to the claims set forth immediately above a claim for declaratory judgment that Mr. Kramer was not entitled to advancement or reimbursement of any of the fees

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sought in his Maryland litigation. Republic Property Corporation, Messrs. Kramer and Grigg have filed motions to dismiss this lawsuit, which are currently pending.

On May 21, 2007, Republic proffered a lease (the “Lease”) to 25 Massachusetts Avenue Property LLC (the “Owner”) for certain space in Republic Square I, an office building in Washington, D.C. (the “Option Property”). Two of Republic’s founders and Trustees, Richard L. Kramer and Steven A. Grigg, currently control the Owner and Mark R. Keller, Republic’s former Chief Executive Officer, holds an ownership interest in the Owner. Based on information provided by the Owner, immediately prior to the proffer of the Lease, approximately 50% of the Option Property’s net rentable area was under lease and approximately 37% of the Option Property’s net rentable area was rent paying space. Had the Owner accepted the Lease, more than 85% of the space in the Option Property would have been rent paying space. The base rents and other material terms of the Lease proffer were based on the Owner’s lease up projections for the Property and the Lease was on the Owner’s form lease agreement.

On May 22, 2007, the Owner rejected the proffer of the Lease, asserting, among other things, that it was “not a bona fide business proposal for Republic’s own occupancy and leasing of space”. On May 29, 2007, Republic (i) re-tendered the Lease to the Owner for certain space at the Option Property and (ii) exercised its exclusive option to purchase the fee interest in the Option Property pursuant to the Option Agreement among the Owner, 660 North Capitol Street Property LLC and Republic dated as of November 28, 2005 (the “Option Agreement”). On May 30, 2007, the Owner rejected the Lease and claimed that “there has been no effective exercise of the Option.” The Company believes that the Lease was properly tendered for an appropriate purpose and, accordingly, the Company re-proffered the Lease to the Owner. The Owner rejected the Lease proffer and disputed whether the Lease entitled Republic to purchase the Property, pursuant to its exercise of the option, at the Purchase Price (as defined in the Option Agreement).

In response to the Owner’s rejection, on June 15, 2007, Republic filed a lawsuit against the Owner in the Court of Chancery in the State of Delaware. This lawsuit asserts, among other things, that (i) by refusing to accept Republic’s option exercise the Owner has breached the Option Agreement and (ii) by deciding not to refinance a construction loan on the Property and rejecting the Lease, the Owner has breached the covenant of good faith and fair dealing implied in every contract governed by the laws of the District of Columbia. Republic sought, among other remedies, to obtain (I) an injunction against the Owner’s sale of the Option Property to any party other than Republic, (II) a declaration that the Lease and option exercise are effective and (III) an order that the Owner specifically perform its obligation to sell the Option Property to Republic pursuant to the Option Agreement. Also on June 15, 2007, Republic filed a Notice of Pendency of Action (Lis Pendens) in the Office of the Recorder of Deeds in the District of Columbia, in order to record Republic’s interest in the Option Property as reflected in the Delaware Chancery Court action. On July 2, 2007, the Owner answered the complaint and counterclaimed, seeking monetary damages related to the Owner’s purported attempts to sell the Option Property to a third party. The matter has been tried, the parties have filed post trial briefs and post trial arguments have been held. At this point, the outcome of the lawsuit is uncertain. However, it seems unlikely that the Company will have the opportunity to purchase the Option Property.

While management currently believes that resolving these matters will not have a material adverse impact on our financial position or our results of operations, the litigation noted above is subject to inherent uncertainties and management’s view of these matters may change in the future. Were an unfavorable final outcome to occur, there exists the possibility of a material adverse impact on our financial position and the results of operations for the period in which the effect becomes capable of being reasonably estimated.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of security holders during the fourth quarter of the year ended December 31, 2007.

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PART II

ITEM 5. MARKET FOR THE REGISTRANTS’ COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND RELATED ISSUER PURCHASES OF EQUITY SECURITIES

The Common Shares are traded on the New York Stock Exchange under the symbol “LRY.” There is no established public trading market for the Common Units. The following table sets forth, for the calendar quarters indicated, the high and low closing prices of the Common Shares on the New York Stock Exchange, and the dividends declared per Common Share for such calendar quarter.

					Dividends
					Declared Per
	High		Low		Common Share
2007
Fourth Quarter	$	43.78	$	28.16	$	0.625
Third Quarter		45.48		34.27		0.625
Second Quarter		50.24		42.63		0.62
First Quarter		53.91		47.89		0.62
2006
Fourth Quarter	$	52.35	$	45.73	$	0.62
Third Quarter		48.23		43.80		0.62
Second Quarter		46.41		41.32		0.615
First Quarter		48.99		43.20		0.615

As of February 22, 2008, the Common Shares were held by 1,361 holders of record. Since its initial public offering in 1994, the Company has paid regular and uninterrupted quarterly dividends.

Although the Company currently anticipates that comparable cash dividends will continue to be paid in the future, the payment of future dividends by the Company will be at the discretion of the Board of Trustees and will depend on numerous factors including the Company’s cash flow, its financial condition, capital requirements, annual distribution requirements under the REIT provisions of the Internal Revenue Code of 1986, as amended, and such other factors as the Board of Trustees deems relevant.

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ITEM 6. SELECTED FINANCIAL DATA

The following tables set forth Selected Financial Data for Liberty Property Trust and Liberty Property Limited Partnership as of and for the years ended December 31, 2007, 2006, 2005, 2004 and 2003. The information set forth below should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the financial statements and notes thereto appearing elsewhere in this report. Certain amounts from prior years have been reclassified to conform to current-year presentation.

Liberty Property Trust

	Year Ended December 31,
Operating Data
(In thousands, except per share data)	2007		2006		2005		2004		2003
Total operating revenue	$	698,747	$	618,359	$	588,176	$	539,455	$	504,416
Income from continuing operations	$	125,855	$	142,195	$	195,629	$	126,035	$	119,451
Net income	$	164,831	$	266,574	$	249,351	$	161,443	$	163,610
Basic:
Income from continuing operations	$	1.38	$	1.59	$	2.25	$	1.49	$	1.52
Income from discontinued operations	$	0.43	$	1.39	$	0.62	$	0.42	$	0.56
Income per common share – basic	$	1.81	$	2.98	$	2.87	$	1.91	$	2.08
Diluted:
Income from continuing operations	$	1.38	$	1.58	$	2.21	$	1.47	$	1.50
Income from discontinued operations	$	0.42	$	1.37	$	0.61	$	0.41	$	0.55
Income per common share – diluted	$	1.80	$	2.95	$	2.82	$	1.88	$	2.05
Distributions paid per common share	$	2.485	$	2.465	$	2.445	$	2.425	$	2.405
Weighted average number of shares outstanding – basic (1)		91,185		89,313		86,986		84,534		78,575
Weighted average number of shares outstanding – diluted (2)		91,803		90,492		88,376		86,024		79,868

	December 31,
Balance Sheet Data
(In thousands)	2007		2006		2005		2004		2003
Net real estate	$	4,942,885	$	4,349,246	$	3,964,195	$	3,667,792	$	3,410,272
Total assets		5,638,749		4,910,911		4,500,322		4,163,997		3,833,528
Total indebtedness		3,021,129		2,387,938		2,249,178		2,133,171		1,885,866
Shareholders’ equity		1,837,021		1,871,604		1,709,182		1,596,259		1,544,897

	Year Ended December 31,
Other Data
(Dollars in thousands)	2007			2006			2005			2004			2003
Cash provided by operating activities	$	384,659		$	344,901		$	360,749		$	293,336		$	263,811
Cash used in investing activities		(796,831	)		(355,270	)		(286,633	)		(373,975	)		(195,133	)
Cash provided by (used in) financing activities		396,322			(327	)		(39,470	)		89,618			(58,111	)
Funds from operations available to common shareholders (3)		305,216			294,801			293,973			291,144			280,921
Total leaseable square footage of Wholly Owned Properties in Operation at end of period (in thousands)		62,079			59,160			60,613			58,052			53,670
Total leasable square footage of JV Properties in Operation at end of period (in thousands)		11,462			6,172			3,758			3,603			3,479
Wholly Owned Properties in Operation at end of period		649			672			675			693			673
JV Properties in Operation at end of period		91			48			43			30			29
Wholly Owned Properties in Operation percentage leased at end of period		93	%		94	%		92	%		92	%		92	%
JV properties in operation percentage leased at end of period		94	%		95	%		99	%		96	%		90	%

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Liberty Property Limited Partnership

	Year Ended December 31,
Operating Data
(In thousands, except per share data)	2007		2006		2005		2004		2003
Total operating revenue	$	698,747	$	618,359	$	588,176	$	539,455	$	504,416
Income from continuing operations	$	149,447	$	162,096	$	216,791	$	143,301	$	137,464
Income available to common unitholders	$	172,387	$	278,359	$	259,364	$	168,398	$	171,254
Basic:
Income from continuing operations	$	1.38	$	1.59	$	2.25	$	1.49	$	1.52
Income from discontinued operations	$	0.43	$	1.39	$	0.62	$	0.42	$	0.56
Income per common unit – basic	$	1.81	$	2.98	$	2.87	$	1.91	$	2.08
Diluted:
Income from continuing operations	$	1.38	$	1.58	$	2.21	$	1.47	$	1.50
Income from discontinued operations	$	0.42	$	1.37	$	0.61	$	0.41	$	0.55
Income per common unit – diluted	$	1.80	$	2.95	$	2.82	$	1.88	$	2.05
Distributions paid per common unit	$	2.485	$	2.465	$	2.445	$	2.425	$	2.405
Weighted average number of units outstanding – basic (1)		95,375		93,208		90,540		88,210		82,268
Weighted average number of units outstanding – diluted (2)		95,993		94,387		91,931		89,700		83,561

	December 31,
Balance Sheet Data
(In thousands)	2007		2006		2005		2004		2003
Net real estate	$	4,942,885	$	4,349,246	$	3,964,195	$	3,667,792	$	3,410,272
Total assets		5,638,749		4,910,911		4,500,322		4,163,997		3,833,528
Total indebtedness		3,021,129		2,387,938		2,249,178		2,133,171		1,885,866
Owners’ equity		2,209,125		2,168,912		1,961,908		1,800,145		1,749,109

	Year Ended December 31,
Other Data
(Dollars in thousands)	2007			2006			2005			2004			2003
Cash provided by operating activities	$	384,659		$	344,901		$	360,749		$	293,336		$	263,811
Cash used in investing activities		(796,831	)		(355,270	)		(286,633	)		(373,975	)		(195,133	)
Cash provided by (used in) financing activities		396,322			(327	)		(39,470	)		89,618			(58,111	)
Funds from operations available to common shareholders (3)		305,216			294,801			293,973			291,144			280,921
Total leaseable square footage of Wholly Owned Properties in Operation at end of period (in thousands)		62,079			59,160			60,613			58,052			53,670
Total leasable square footage of JV Properties in Operation at end of period (in thousands)		11,462			6,172			3,758			3,603			3,479
Wholly Owned Properties in Operation at end of period		649			672			675			693			673
JV Properties in Operation at end of period		91			48			43			30			29
Wholly Owned Properties in Operation percentage leased at end of period		93	%		94	%		92	%		92	%		92	%
JV properties in operation percentage leased at end of period		94	%		95	%		99	%		96	%		90	%

(1)	Basic weighted average number of shares includes vested Common Shares/Units outstanding during the year.
(2)	Diluted weighted average number of shares outstanding includes the vested and unvested Common Shares/Units outstanding during the year as well as the dilutive effect of outstanding options.
(3)	The National Association of Real Estate Investment Trusts (“NAREIT”) has issued a standard definition for Funds from operations (as defined below). The Securities and Exchange Commission has agreed to the disclosure of this non-GAAP financial measure on a per share basis in its Release No. 34-47226, Conditions for Use of Non-GAAP Financial Measures. The Company believes that the calculation of Funds from operations is helpful to investors and management as it is a measure of the Company’s operating performance that excludes depreciation and amortization and gains and losses from property dispositions. As a result, year over year comparison of Funds from operations reflects the impact on operations from trends in occupancy rates, rental rates, operating costs, development activities, general and administrative expenses, and interest costs, providing perspective not immediately apparent from net income. In addition, management believes that Funds from operations provides useful information to the investment community about the Company’s financial performance when compared to other REITs since Funds from operations is generally recognized as the standard for reporting the operating performance of a REIT. Funds from operations available to common shareholders is defined by NAREIT as net income (computed in accordance with generally accepted accounting principles (“GAAP”)), excluding gains (or losses) from sales of property, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Funds from operations available to common shareholders does not represent net income or cash flows from operations as defined by GAAP and does not necessarily indicate that cash flows will be sufficient to fund cash needs. It should not be considered as an alternative to net income as an indicator of the Company’s operating performance or to cash flows as a measure of liquidity. Funds from operations available to common shareholders also does not represent cash flows generated from operating, investing or financing activities as defined by GAAP. A reconciliation of Funds from operations to net income may be found on page 36.

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

Liberty Property Trust (the “Trust”) is a self-administered and self-managed Maryland real estate investment trust (“REIT”). Substantially all of the Trust’s assets are owned directly or indirectly, and substantially all of the Trust’s operations are conducted directly or indirectly, by its subsidiary, Liberty Property Limited Partnership, a Pennsylvania limited partnership (the “Operating Partnership” and, collectively with the Trust and their consolidated subsidiaries, the “Company”).

The Company operates primarily in the Mid-Atlantic, Southeastern, Midwestern and Southwestern United States. During 2007 the Company exited the Michigan market and entered the Phoenix, Arizona and the Northern Virginia / Washington, D.C. markets. Additionally, the Company owns certain assets in the United Kingdom.

As of December 31, 2007, the Company owned and operated 353 industrial and 296 office properties (the “Wholly Owned Properties in Operation”) totaling 62.1 million square feet. In addition, as of December 31, 2007, the Company owned 28 properties under development, which when completed are expected to comprise 4.8 million square feet (the “Wholly Owned Properties under Development”) and 1,384 acres of developable land, substantially all of which is zoned for commercial use. Additionally, as of December 31, 2007, the Company had an ownership interest, through unconsolidated joint ventures in 44 industrial and 47 office properties totaling 11.5 million square feet (the “JV Properties in Operation” and, together with the Wholly Owned Properties in Operation, the “Properties in Operation”), four properties under development, which when completed are expected to comprise 527,000 square feet (the “JV Properties under Development” and, together with the Wholly Owned Properties under Development, the “Properties under Development”) and 715 acres of developable land, substantially all of which is zoned for commercial use.

The Company focuses on creating value for shareholders and increasing profitability and cash flow. With respect to its Properties in Operation, the Company endeavors to maintain high occupancy levels while increasing rental rates and controlling costs. The Company pursues development opportunities that it believes will create value and yield acceptable returns. The Company also acquires properties that it believes will create long-term value, and disposes of properties that no longer fit within the Company’s strategic objectives or in situations where it can optimize cash proceeds. The Company’s operating results depend primarily upon income from rental operations and are substantially influenced by rental demand for the Properties in Operation.

Rental demand for the Properties in Operation generally improved during the year ended December 31, 2007. Although in some markets the Company continues to experience market conditions characterized by an oversupply of leaseable space and/or soft demand, the Company believes that the majority of its markets are recovering from several years of a generally slow real estate economy. However, this recovery gradually slowed during the second half of 2007. Rental rates in many of the Company’s markets have stabilized or improved. The Company successfully leased 15.7 million square feet during the year ended December 31, 2007 and attained occupancy of 92.7% for the Wholly Owned Properties in Operation and 93.7% for the Joint Venture Properties in Operation for a combined occupancy of 92.9% for the Properties in Operation as of that date. The Company believes that straight line rents on renewal and replacement leases for 2008 will on average be 0% to 2% greater than rents on expiring leases. Furthermore, the Company believes that average occupancy for its Properties in Operation will not increase or decrease by more than 1% for 2008 compared to 2007.

WHOLLY OWNED CAPITAL ACTIVITY

Acquisitions

During the first half of 2007, conditions for the acquisition of properties were very competitive. However, during the latter part of the year ended December 31, 2007, market conditions for acquisitions were unsettled because of adverse events in the credit markets. During the year ended December 31, 2007, the Company acquired 23 properties representing 3.0 million square feet for a Total Investment, as defined below, of $316.6 million. These acquisitions generally served to increase the Company’s presence or balance the product mix in markets the Company believes to have significant potential. The properties acquired during the year ended December 31, 2007 were primarily located in Phoenix (970,000 square feet) and Houston (900,000 square feet). “Total Investment” for a property is defined as the property’s purchase price plus closing costs and management’s estimate, as determined at the time of acquisition, of the cost of necessary building improvements in the case of acquisitions, or land costs and land and building improvement costs in the case of development projects, and, where appropriate, other development costs and carrying

24

costs. For 2008, the Company believes that wholly owned property acquisitions will be in the $100 million to $200 million range and that, similar to 2007, certain of the acquired properties will be either vacant or underleased.

Dispositions

During the first half of 2007 the real estate disposition market was very strong. However, during the latter part of the year ended December 31, 2007, market conditions for dispositions were unsettled because of adverse events in the credit markets. Disposition activity allows the Company to, among other things, (1) reduce its holdings in certain markets and product types within a market; (2) lower the average age of the portfolio; and (3) take advantage of favorable market conditions to optimize the cash proceeds from the sale of certain assets. During the year ended December 31, 2007, the Company realized proceeds of $386.4 million from the sale of 70 operating properties representing 5.2 million square feet and 166 acres of land. A substantial portion of the properties sold during this period were in the Michigan market. For 2008, the Company believes it will dispose of $250 million to $350 million of operating properties.

Development

The Company continues to pursue development opportunities. During the year ended December 31, 2007, the Company brought into service 25 Wholly Owned Properties under Development representing 4.2 million square feet and a Total Investment of $398.5 million, and initiated $321.2 million in real estate development. As of December 31, 2007, the projected Total Investment of the Wholly Owned Properties under Development (excluding Comcast Center) was $383.1 million. For 2008, the Company believes that it will bring into service from its development pipeline (excluding Comcast Center) approximately $200 million to $300 million of Total Investment in operating real estate.

Comcast Center Activity

During the year ended December 31, 2007, the Company brought into service 947,000 square feet of Comcast Center equaling $370.9 million of Total Investment. The balance of Comcast Center is scheduled to be brought into service during the first half of 2008. The projected Total Investment at December 31, 2007 for the remainder of Comcast Center to be brought into service is $124.1 million. In April 2006, the Company entered into a joint venture, whereby the Company sold an 80% interest in the equity of Comcast Center. The terms of the joint venture obligate the Company to complete the development of the building and consequently this development is treated as a Wholly Owned Property under Development. In 2008, the Company expects to effectuate sale treatment of Comcast Center to the unconsolidated joint venture – See Note 4 to the Company’s financial statements.

JOINT VENTURE CAPITAL ACTIVITY

The Company periodically enters into joint venture relationships in connection with the execution of its real estate operating strategy.

Acquisitions

During the year ended December 31, 2007, unconsolidated joint ventures in which the Company held an interest acquired four properties representing 1.2 million square feet for a Total Investment of $70.6 million. The Company also formed two joint ventures, the Blythe Valley JV Sarl and the Liberty Washington, LP joint ventures (see below). For 2008, the Company believes that property acquisitions by existing joint ventures will be in the $200 million to $250 million range.

Dispositions

During the year ended December 31, 2007, an unconsolidated joint venture in which the Company held an interest realized proceeds of $1.3 million from the sale of one operating property representing 25,000 square feet.

Development

During the year ended December 31, 2007, unconsolidated joint ventures in which the Company held an interest brought into service three development properties representing 1.1 million square feet and a Total Investment of $53.5 million and initiated $15.0 million in real estate development. As of December 31, 2007, the projected Total Investment of Joint Venture Properties under Development was $170.3 million. For 2008, the Company expects unconsolidated joint ventures in which it holds an interest to bring into service $50 million to $70 million of Total Investment in operating properties.

Blythe Valley JV Sarl

On September 10, 2007, a newly formed joint venture in which the Company holds a 20% interest acquired the Blythe Valley Park for $325 million. The park consists of 491,000 square feet of office space and 98 acres of developable land and is located in close proximity to the city of Birmingham, UK.

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Liberty Washington, LP

On October 4, 2007, the Company acquired Republic Property Trust, a Maryland real estate investment trust and Republic Property Limited Partnership, a Delaware limited partnership and Republic’s operating partnership (together, “Republic”) for $913 million. The acquisition of Republic was completed through the merger of Republic with a wholly owned subsidiary of the Company and the merger of Republic’s operating partnership with the Company’s Operating Partnership. Republic operated a portfolio consisting of 2.4 million square feet of office space, six acres of developable land, and a redevelopment property that, when completed, is expected to contain an additional 176,000 square feet of office space in the Northern Virginia and Washington, D.C. markets.

Concurrently, the Company formed a joint venture with New York State Common Retirement Fund to own and manage the Republic portfolio. The joint venture, in which the Company holds a 25% interest, purchased the Republic real estate assets for $900 million. The acquisition of Republic resulted in the Company recording $13 million in goodwill and other intangibles.

Forward-Looking Statements

When used throughout this report, the words “believes,” “anticipates” and “expects” and similar expressions are intended to identify forward-looking statements. Such statements indicate that assumptions have been used that are subject to a number of risks and uncertainties that could cause actual financial results or management plans and objectives to differ materially from those projected or expressed herein, including: the effect of national and regional economic conditions; rental demand; the Company’s ability to identify, and enter into agreements with suitable joint venture partners in situations where it believes such arrangements are advantageous; the Company’s ability to identify and secure additional properties and sites, both for itself and the joint ventures to which it is a party, that meet its criteria for acquisition or development; the availability and cost of capital; the effect of prevailing market interest rates; risks related to the integration of the operations of entities that we have acquired or may acquire; risks related to litigation; and other risks described from time to time in the Company’s filings with the SEC. Given these uncertainties, readers are cautioned not to place undue reliance on such statements.

Critical Accounting Policies and Estimates

The Company’s discussion and analysis of its financial condition and results of operations are based upon the Company’s consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires the Company to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. The Company bases these estimates, judgments and assumptions on historical experience and on other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions.

The Company believes the following critical policies affect its more significant estimates and assumptions used in the preparation of its consolidated financial statements.

Capitalized Costs

Expenditures directly related to the acquisition, or improvement of real estate, including interest and other costs capitalized on development projects and land being readied for development, are included in net real estate and are stated at cost. The Company considers a development property substantially complete upon the completion of tenant build-out, but no later than one year after the completion of major construction activity. The capitalized costs include pre-construction costs essential to the development of the property, construction costs, interest costs, real estate taxes, development related salaries and other costs incurred during the period of development. Capitalized development related salaries and benefits historically represent approximately 1% to 2% of the cost of developed properties. The determination to capitalize rather than expense costs requires the Company to evaluate the status of the development activity. Capitalized interest for the years ended December 31, 2007, 2006, and 2005 was $45.7 million, $30.8 million and $17.7 million, respectively.

Revenue Recognition

Rental revenue is recognized on a straight line basis over the terms of the respective leases. Deferred rent receivable represents the amount by which straight line rental revenue exceeds rents currently billed in accordance with the lease agreements. Above-market and below-market lease values for acquired properties are recorded based on the present value (using a discount rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to each in-place lease and (ii) management’s estimate of fair market lease rates for each corresponding in-place lease. The capitalized above or below-market lease values are amortized as a component of rental revenue over the remaining term of the respective leases.

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Allowance for Doubtful Accounts

The Company monitors the liquidity and creditworthiness of its tenants on an on-going basis. Based on these reviews, provisions are established, and an allowance for doubtful accounts for estimated losses resulting from the inability of its tenants to make required rental payments is maintained. As of December 31, 2007 and 2006, the Company’s allowance for doubtful accounts totaled $6.0 million and $5.1 million, respectively. The Company’s bad debt expense for the years ended December 31, 2007, 2006 and 2005 was $3.4 million, $1.0 million and $2.6 million, respectively. During the year ended December 31, 2006, the Company realized $2.0 million from the settlement of a tenant bankruptcy.

Impairment of Real Estate

The Company evaluates its real estate investments and investments in unconsolidated joint ventures upon occurrence of significant adverse changes in operations to assess whether any impairment indicators are present that affect the recovery of the recorded value. If any real estate investment is considered impaired, the carrying value of the property is written down to its estimated fair value. During the years ended December 31, 2007, 2006, and 2005 the Company recognized impairment losses of $0.2 million, $4.2 million and $5.3 million respectively. The 2007 impairment loss of $0.2 million was related to various land parcels. The 2006 impairment loss of $4.2 million was primarily related to a 352,000 square foot portfolio of operating properties in Michigan. The 2005 impairment loss was primarily related to a portfolio of operating properties equaling 615,000 square feet in the Midwest segment. The determination of whether impairment exists requires the Company to make estimates, judgments and assumptions about the future utility of the assets. The Company has evaluated each of its Properties and land held for development and investments in unconsolidated joint ventures and has determined that there are no additional valuation adjustments that need to be made at December 31, 2007.

Intangibles

In accordance with the Financial Accounting Standards Board (“FASB”) Statement of Financial Standards (“SFAS”) No. 141, “Business Combinations,” the Company allocates the purchase price of real estate acquired to land, building and improvements and intangibles based on the relative fair value of each component. The value ascribed to in-place leases is based on the rental rates for the existing leases compared to the Company’s estimate of the fair market lease rates for leases of similar terms and present valuing the difference based on an interest rate which reflects the risks associated with the leases acquired. Origination values are also assigned to in-place leases, and, where appropriate, value is assigned to customer relationships. Origination cost estimates include the costs to execute leases with terms similar to the remaining lease terms of the in-place leases, including leasing commissions, legal and other related expenses. Additionally, the Company estimates carrying costs during the expected lease-up periods including real estate taxes, other operating expenses and lost rentals at contractual rates. The Company depreciates the amounts allocated to building and improvements over 40 years. The amounts allocated to the intangible relating to in-place leases, which are included in deferred financing and leasing costs or in other liabilities in the accompanying balance sheets, are amortized over the remaining term of the related leases. In the event that a tenant terminates its lease, the unamortized portion of the intangible is written off.

Results of Operations

The following discussion is based on the consolidated financial statements of the Company. It compares the results of operations of the Company for the year ended December 31, 2007 with the results of operations of the Company for the year ended December 31, 2006, and the results of operations of the Company for the year ended December 31, 2006 with the results of operations of the Company for the year ended December 31, 2005. As a result of the varying level of development, acquisition and disposition activities by the Company in 2007, 2006 and 2005, the overall operating results of the Company during such periods are not directly comparable. However, certain data, including the Same Store results, do lend themselves to direct comparison.

This information should be read in conjunction with the accompanying consolidated financial statements and notes included elsewhere in this report.

Comparison of Year Ended December 31, 2007 to Year Ended December 31, 2006

Overview

The Company’s average gross investment in operating real estate owned for the year ended December 31, 2007 increased to $4,617.3 million from $3,935.9 million for the year ended December 31, 2006. This increase in operating real estate resulted in increases in rental revenue, operating expense reimbursement, rental property operating expenses, real estate taxes, and depreciation and amortization expense.

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Total operating revenue increased to $698.7 million for the year ended December 31, 2007 from $618.4 million for the year ended December 31, 2006. This $80.3 million increase was primarily due to the increase in investment in operating real estate and the increase in operating revenue from the Same Store group of properties, discussed below. This increase was partially offset by a decrease in “Termination Fees,” which totaled $4.2 million for the year ended December 31, 2007 as compared to $6.1 million for the year ended December 31, 2006. Termination Fees are fees that the Company agrees to accept in consideration for permitting certain tenants to terminate their leases prior to the contractual expiration date. Termination Fees are included in rental revenue.

Segments

The Company evaluates the performance of the Properties in Operation by reportable segment (see Note 14 to the Company’s financial statements for reconciliation to net income). The following table identifies changes in reportable segments (dollars in thousands):

Property Level Operating Income:

	Year Ended December 31,					Percentage
	2007		2006			Increase (Decrease)
Delaware Valley
– SE Pennsylvania	$	116,285	$	115,019			1.1	%
– Other		37,306		36,762			1.5	%
Midwest
– Lehigh Valley		68,015		63,415			7.3	%(1)
– Other		53,803		50,085			7.4	%(2)
Mid-Atlantic		93,571		83,729			11.8	%(2)
Florida		94,022		74,598			26.0	%(2)
Arizona		6,562		2,206			197.5	%(1)
Philadelphia		5,391		(13	)		N/A	(1)
United Kingdom		2,682		906			196.0	%(2)
Total property level operating income (3)	$	477,637	$	426,707			11.9	%

(1)	The increase for the year ended December 31, 2007 versus the year ended December 31, 2006 is primarily due to an increase in average gross investment in operating real estate during 2007.
(2)	The increase for the year ended December 31, 2007 versus the year ended December 31, 2006 is primarily due to an increase in average gross investment in operating real estate and increased occupancy during 2007.
(3)	See a reconciliation of property level operating income to net income in the Same Store comparison below.

Same Store

Property level operating income, exclusive of Termination Fees, for the Same Store properties increased to $408.3 million for the year ended December 31, 2007 from $399.3 million for the year ended December 31, 2006, on a straight line basis (which recognizes rental revenue evenly over the life of the lease), and increased to $406.2 million for the year ended December 31, 2007 from $394.2 million for the year ended December 31, 2006 on a cash basis. These increases of 2.3% and 3.1%, respectively, are primarily due to an increase in occupancy and an increase in rental rates.

Management generally considers the performance of the Same Store properties to be a useful financial performance measure because the results are directly comparable from period to period. Management further believes that the performance comparison should exclude Termination Fees since they are more event specific and are not representative of ordinary performance results. In addition, Same Store property level operating income exclusive of Termination Fees is considered by management to be a more reliable indicator of the portfolio’s baseline performance. The Same Store properties consist of the 561 properties totaling approximately 50.2 million square feet owned on January 1, 2006.

Set forth below is a schedule comparing the property level operating income, on a straight line basis and on a cash basis, for the Same Store properties for the years ended December 31, 2007 and 2006. Same Store property level income is a non-GAAP measure and does not represent income before property dispositions, income taxes, minority interest and equity in (loss) earnings of unconsolidated joint ventures because it does not reflect the consolidated operations of the Company. Investors should review Same Store results, along with Funds from operations (see “Liquidity and Capital Resources” section), GAAP net income and cash flow from operating activities, investing activities and financing activities when considering the Company’s operating performance. Also, set forth below is a reconciliation of Same Store property level operating income to net income (in thousands).

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	Year Ended December 31,
	2007			2006
Same Store:
Rental revenue	$	414,197		$	406,063
Operating expenses:
Rental property expense		131,698			123,156
Real estate taxes		62,157			61,294
Operating expense recovery		(188,006	)		(177,680	)
Unrecovered operating expenses		5,849			6,770
Property level operating income		408,348			399,293
Less straight line rent		2,111			5,091
Cash basis property level operating income	$	406,237		$	394,202
Reconciliation of non-GAAP financial measure:
Property level operating income – Same Store	$	408,348		$	399,293
Property level operating income – properties purchased or developed subsequent to January 1, 2006		65,110			21,352
Termination fees		4,179			6,062
General and administrative expense		(54,116	)		(46,157	)
Depreciation and amortization expense		(158,355	)		(134,433	)
Other income (expense)		(117,553	)		(102,800	)
Gain on property dispositions		1,452			17,628
Income taxes		709			(288	)
Minority interest		(23,693	)		(19,894	)
Equity in (loss) earnings of unconsolidated joint ventures		(226	)		1,432
Discontinued operations, net of minority interest		38,976			124,379
Net income	$	164,831		$	266,574

General and Administrative

General and administrative expenses increased to $54.1 million for the year ended December 31, 2007 from $46.2 million for the year ended December 31, 2006. This increase was primarily due to increases in compensation expense for real estate personnel necessitated by the competitive real estate market and increases in personnel consistent with the size and complexity of the Company. The increase in general and administrative expenses was also due to the expensing of costs relating to the acquisition of Republic and an increase in cancelled project costs.

Depreciation and Amortization

Depreciation and amortization increased to $158.4 million for the year ended December 31, 2007 from $134.4 million for the year ended December 31, 2006. The increase was primarily due to the increase in gross investment in operating real estate during the respective periods and particularly the increased investment in tenant improvement costs, which are depreciated over a shorter period than buildings.

Interest Expense

Interest expense increased to $129.3 million for the year ended December 31, 2007 from $111.5 million for the year ended December 31, 2006. This increase was related to an increase in the average debt outstanding, which was $2,677.9 million for the year ended December 31, 2007, compared to $2,263.9 million for the year ended December 31, 2006. The effect of the increase in the average debt outstanding was partially offset by an increase in capitalized interest costs and a decrease in the weighted average interest rate to 6.4% for the year ended December 31, 2007 from 6.6% for the year ended December 31, 2006.

Interest expense allocated to discontinued operations for the years ended December 31, 2007 and 2006 was $4.7 million and $12.7 million, respectively. This decrease was due to the decrease in the level of dispositions in 2007 compared to 2006.

Other

Costs directly related to the development of Properties Under Development and land being readied for development are capitalized. Capitalized development costs include interest, development-related salaries and benefits, property taxes, insurance and other directly identifiable costs incurred during the period of development. Capitalized development-related salaries and benefits historically represent approximately 1% to 2% of the cost of developed properties.

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Gain on property dispositions decreased to $1.5 million for the year ended December 31, 2007 from $17.6 million for the year ended December 31, 2006. The decrease was due to a gain on sale of properties to an unconsolidated joint venture during the year ended December 31, 2006. There was no similar transaction in 2007.

Income from discontinued operations decreased to $39.0 million from $124.4 million for the year ended December 31, 2007 compared to the year ended December 31, 2006. The decrease is due to lower operating income and the decrease in gains recognized on sales which were $33.6 million for the year ended December 31, 2007 compared to $112.6 million for the year ended December 31, 2006.

As a result of the foregoing, the Company’s net income decreased to $164.8 million for the year ended December 31, 2007 from $266.6 million for the year ended December 31, 2006.

Comparison of Year Ended December 31, 2006 to Year Ended December 31, 2005

Overview

The Company’s average gross investment in operating real estate owned for the year ended December 31, 2006 increased to $3,935.9 million from $3,609.7 million for the year ended December 31, 2005. This increase in operating real estate resulted in increases in rental revenue, operating expense reimbursement, rental property operating expenses, real estate taxes, and depreciation and amortization expense.

Total operating revenue increased to $618.4 million for the year ended December 31, 2006 from $588.2 million for the year ended December 31, 2005. This $30.2 million increase was primarily due to the increase in investment in operating real estate and the increase in operating revenue from the Prior Year Same Store group of properties, discussed below. These increases were partially offset by a decrease in Termination Fees, which totaled $6.1 million for the year ended December 31, 2006 as compared to $13.2 million for the year ended December 31, 2005. Termination Fees are included in rental revenue.

Segments

The Company evaluates the performance of the Properties in Operation by reportable segment (see Note 14 to the Company’s financial statements for a reconciliation to net income). The following table identifies changes in reportable segments (dollars in thousands):

Property level operating income:

	Year Ended December 31,					Percentage
	2006			2005		Increase (Decrease)
Delaware Valley
- SE Pennsylvania	$	115,019		$	119,487		(3.7	)%
- Other		36,762			35,120		4.7	%
Midwest
- Lehigh Valley		63,415			57,341		10.6	%(1)
- Other		50,085			46,207		8.4	%
Mid-Atlantic		83,729			72,437		15.6	%(2)
Florida		74,598			63,773		17.0	%(2)
Arizona		2,206			—		N/A	(1)
Philadelphia		(13	)		155		(108.4	)%
United Kingdom		906			16,651		(94.6	)%(3)
Total property level operating income (4)	$	426,707		$	411,171		3.8	%

(1)	The increase for the year ended December 31, 2006 versus the year ended December 31, 2005 is primarily due to an increase in average gross investment in operating real estate during 2006.
(2)	The increase for the year ended December 31, 2006 versus the year ended December 31, 2005 is primarily due to increased occupancy and an increase in average gross investment in operating real estate during 2006.
(3)	The decrease for the year ended December 31, 2006 versus the year ended December 31, 2005 is primarily due to the sale of 15 operating properties to a joint venture in December 2005.
(4)	See a reconciliation of property level operating income to net income in the Same Store comparison below.

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Same Store

Property level operating income, exclusive of Termination Fees, for the “Prior Year Same Store” (as defined below) properties increased to $401.8 million for the year ended December 31, 2006 from $391.1 million for the year ended December 31, 2005, on a straight line basis and increased to $397.6 million for the year ended December 31, 2006 from $384.4 million for the year ended December 31, 2005 on a cash basis. These increases of 2.8% and 3.4%, respectively, were primarily due to an increase in occupancy.

Management generally considers the performance of the Prior Year Same Store properties to be a useful financial performance measure because the results are directly comparable from period to period. Management further believes that the performance comparison should exclude Termination Fees since they are more event specific and are not representative of ordinary performance results. In addition, Prior Year Same Store property level operating income exclusive of Termination Fees is considered by management to be a more reliable indicator of the portfolio’s baseline performance. The Prior Year Same Store properties consist of the 597 properties totaling approximately 50.2 million square feet owned on January 1, 2005.

Set forth below is a schedule comparing the property level operating income, on a straight line basis and on a cash basis, for the Prior Year Same Store properties for the years ended December 31, 2006 and 2005. Prior Year Same Store property level income is a non-GAAP measure and does not represent income before property dispositions, income taxes, minority interest, and equity in earnings of unconsolidated joint ventures because it does not reflect the consolidated operations of the Company. Investors should review Prior Year Same Store results, along with Funds from operations (see “Liquidity and Capital Resources” section), GAAP net income and cash flow from operating activities, investing activities and financing activities when considering the Company’s operating performance. Also, set forth below is a reconciliation of Prior Year Same Store property level operating income to net income (in thousands).

	Year Ended December 31,
	2006			2005
Prior Year Same Store:
Rental revenue	$	409,066		$	402,794
Operating expenses:
Rental property expense		126,076			124,831
Real estate taxes		63,940			61,720
Operating expense recovery		(182,795	)		(174,831	)
Unrecovered operating expenses		7,221			11,720
Property level operating income		401,845			391,074
Less straight line rent		4,282			6,700
Cash basis property level operating income	$	397,563		$	384,374
Reconciliation of non-GAAP financial measure:
Property level operating income — prior year Same Store	$	401,845		$	391,074
Property level operating income — properties purchased or developed subsequent to January 1, 2005		51,643			37,599
Less: Property level operating income — 2007 discontinued operations		(29,527	)		(27,309	)
Less: Property level operating income — Assets held for sale at December 31, 2006		(3,316	)		(3,433	)
Termination fees		6,062			13,240
General and administrative expense		(46,157	)		(38,113	)
Depreciation and amortization expense		(134,433	)		(125,703	)
Other income (expense)		(102,800	)		(104,034	)
Gain on property dispositions		17,628			86,114
Income taxes		(288	)		(14,827	)
Minority interest		(19,894	)		(21,519	)
Equity in earnings of unconsolidated joint ventures		1,432			2,540
Discontinued operations at December 31, 2006		112,877			44,510
2007 discontinued operations		11,502			9,212
Net income	$	266,574		$	249,351

General and Administrative

General and administrative expenses increased to $46.2 million for the year ended December 31, 2006 from $38.1 million for the year ended December 31, 2005. This increase was primarily due to increases in salaries and increases in personnel consistent with the increase in the size of the Company. The increase in general and administrative expenses was also due to the expensing of long term incentive compensation.

Depreciation and Amortization

Depreciation and amortization increased to $134.4 million for the year ended December 31, 2006 from $125.7 million for the year ended December 31, 2005. The increase is primarily due to the increase in gross investment in

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operating real estate during the respective periods and particularly the increased investment in tenant improvement costs, which are depreciated over a relatively shorter period than buildings.

Interest Expense

Interest expense increased to $111.5 million for the year ended December 31, 2006 from $111.0 million for the year ended December 31, 2005. Interest expense allocated to discontinued operations for the years ended December 31, 2006 and 2005 was $12.7 million and $24.4 million, respectively. This decrease was due to the level of dispositions in 2006 versus 2005. The increase in average debt outstanding for 2006 compared to 2005 and the decrease in interest expense allocated to discontinued operations for 2006 compared to 2005 were partially offset by the increase in capitalized interest costs which is consistent with the increased investment in Properties under Development. The average debt outstanding for the year ended December 31, 2006 was $2,263.9 million compared to $2,241.1 million for the year ended December 31, 2005. The weighted average interest rate for the years ended December 31, 2006 and 2005 was unchanged at 6.6% for both years.

Other

Costs directly related to the development of Properties Under Development and land being readied for development are capitalized. Capitalized development costs include interest, development-related salaries, property taxes, insurance and other directly identifiable costs incurred during the period of development. Capitalized development-related salaries and benefits historically represent approximately 1% to 2% of the cost of developed properties.

Gain on property dispositions and income taxes decreased to $17.6 million and $0.3 million, respectively, for the year ended December 31, 2006 from $86.1 million and $14.8 million, respectively, for the year ended December 31, 2005. In 2005, an $89.6 million gain and a resultant $14.5 million of tax liability was recognized on the sale of 15 United Kingdom Properties in Operation to the Kings Hill Unit Trust joint venture. In 2006, a $17.6 million gain was recognized on the sale of certain Properties in Operation and land located in Chicago to the Liberty Illinois, LP joint venture.

Income from discontinued operations increased to $124.4 million from $53.7 million for the year ended December 31, 2006 compared to the year ended December 31, 2005. The increase is due to the increase in gains realized on sales which were $112.6 million for the year ended December 31, 2006 compared to $36.1 million for the year ended December 31, 2005.

As a result of the foregoing, the Company’s net income increased to $266.6 million for the year ended December 31, 2006 from $249.4 million for the year ended December 31, 2005.

Liquidity and Capital Resources

As of December 31, 2007, the Company had cash and cash equivalents of $72.6 million, including $34.6 million in restricted cash.

Net cash flow provided by operating activities increased to $384.7 million for the year ended December 31, 2007 from $344.9 million for the year ended December 31, 2006. This $39.8 million increase was primarily due to a decrease in restricted cash. In 2006, funds received from the sale of land in the United Kingdom were restricted for infrastructure investment. In 2007, a portion of these funds were used for infrastructure investment. Net cash flow provided by operations is the primary source of liquidity to fund distributions to shareholders and for the recurring capital expenditures and leasing transaction costs for the Company’s Properties in Operation. In the past several years, a portion of distributions to shareholders has been funded by the disposition of properties or borrowings.

Net cash used in investing activities increased to $796.8 million for the year ended December 31, 2007 from $355.3 million for the year ended December 31, 2006. This $441.5 million increase was primarily due to cash paid for the acquisition of Republic, increased investment in joint ventures to include Blythe Valley JV Sarl and an increased investment in development in progress partially offset by an increase in net proceeds from the disposition of properties and land and decreased investment in properties.

Net cash provided by financing activities increased to $396.3 million for the year ended December 31, 2007 compared to net cash used of $0.3 million for the year ended December 31, 2006. This change was due to the increase in debt and an increase in proceeds from the issuance of preferred units. These increases were partially offset by the purchase of treasury shares. Net cash provided by or used in financing activities includes proceeds from the issuance of equity and debt, net of debt repayments and shareholder distributions. Net cash provided by financing activities is a source of capital utilized by the Company to fund investment activities.

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The Company funds its development and acquisitions with long-term capital sources including proceeds from the disposition of properties. For the year ended December 31, 2007, a significant portion of these activities were funded through a $600 million Credit Facility (the “$600 million Credit Facility”). The interest rate on borrowings under the $600 million Credit Facility fluctuates based upon ratings from Moody’s Investors Service, Inc. (“Moody’s”), Standard and Poor’s Ratings Group (“S&P”) and Fitch, Inc. (“Fitch”). The current ratings for the Company’s senior unsecured debt are Baa2, BBB and BBB+ from Moody’s, S&P and Fitch, respectively. At these ratings, the interest rate for borrowings under the $600 million Credit Facility is 65 basis points over LIBOR. The $600 million Credit Facility contains an accordion feature whereby the Company may borrow an additional $200 million. The $600 million Credit Facility expires in January 2010, and has a one-year extension option.

The Company uses debt financing to lower its overall cost of capital in an attempt to increase the return to shareholders. The Company staggers its debt maturities and maintains debt levels it considers to be prudent. In determining its debt levels, the Company considers various financial measures including the debt to gross assets ratio and the fixed charge coverage ratio. As of December 31, 2007 the Company’s debt to gross assets ratio was 46.5%, and for the year ended December 31, 2007 the fixed charge coverage ratio was 2.3x. Debt to gross assets equals total long-term debt, borrowings under the $600 million Credit Facility, and borrowings under the Liberty/Commerz 1701 JFK Boulevard, LP financing arrangement divided by total assets plus accumulated depreciation. The fixed charge coverage ratio equals income from continuing operations before property dispositions and minority interest, including operating activity from discontinued operations, plus interest expense and depreciation and amortization, divided by interest expense, including capitalized interest, plus distributions on preferred units.

As of December 31, 2007, $243.2 million in mortgage loans and $2,155.0 million in unsecured notes were outstanding with a weighted average interest rate of 6.59%. The interest rates on these mortgage loans and unsecured notes are fixed and range from 4.6% to 8.8%. The weighted average remaining term for these mortgage loans and unsecured notes is 5.8 years.

In 2008, $34.1 million in mortgage loans with various interest rates will mature. The Company anticipates that it will refinance or retire these borrowings through its available sources of capital.

During the first half of 2008, it is anticipated that Liberty/Commerz 1701 JFK Boulevard, LP will close on a loan commitment for a $324 million permanent financing for Comcast Center. Liberty/Commerz 1701 Boulevard LP, will use the proceeds from this financing to repay the Company the $324 million it has advanced for the development of Comcast Center.

The Company’s contractual obligations, as of December 31, 2007, are as follows (in thousands):

	Payments Due By Period
			Less than 1						More than
Contractual Obligations	Total		year		1-3 years		3-5 years		5 years
Long-term debt (1)	$	3,948,105	$	387,049	$	1,292,931	$	722,449	$	1,545,676
Capital lease obligations		7,412		1,863		666		376		4,507
Operating lease obligations		17,867		861		1,168		874		14,964
Share of debt of unconsolidated joint ventures (1)		341,914		40,706		88,770		96,265		116,173
Property development commitments (2)		179,026		138,206		40,820		—		—
Share of property development commitments of unconsolidated joint ventures		53,522		35,058		18,464		—		—
Joint venture capital commitments		4,162		4,162		—		—		—
Letter of credit		2,344		629		1,715		—		—
Purchase obligations (3)		40,255		29,280		10,975		—		—
Master lease obligation (4)		6,459		6,459		—		—		—
Total	$	4,601,066	$	644,273	$	1,455,509	$	819,964	$	1,681,320

(1)	Includes principal and interest payments. Interest payments assume current credit facility borrowings and interest rates remain at the December 31, 2007 level until maturity.
(2)	The Comcast Center commitment is included at the current projected Total Investment of $495 million.
(3)	Purchase obligations include obligations to acquire property and land.
(4)	Includes Comcast Center net operating income support agreement and a master lease arrangement in the United Kingdom.

33

General

The Company believes that its existing sources of capital will provide sufficient funds to finance its continued development and acquisition activities. The Company’s existing sources of capital include the public debt and equity markets, proceeds from property dispositions, equity capital from joint venture partners and net cash provided by operating activities. Additionally, the Company expects to incur variable rate debt, including borrowings under the $600 million Credit Facility, from time to time.

In December 2006, the Company satisfied a $100 million 6.95% medium term note and issued a $300 million 5.50% senior unsecured note due 2016. The net proceeds of the $300 million offering were $295.4 million and were used to pay down outstanding borrowings under the Company’s unsecured credit facility and for general corporate purposes.

In December 2006, the Company raised $27 million through the placement of 6.70% Series G Cumulative Redeemable Preferred Units. The net proceeds from this offering were used to pay down outstanding borrowings under the Company’s unsecured credit facility and for general corporate purposes.

In June 2007, the Company redeemed for $23.7 million its outstanding 7.63% Series D Cumulative Redeemable Preferred Units. The redemption resulted in a $0.7 million write-off of Series D issuance costs.

In August 2007, the Company raised $100 million through the placement of 7.40% Series H Cumulative Redeemable Preferred Units. The net proceeds from this offering were used to pay down outstanding borrowings under the Company’s unsecured credit facility and for general corporate purposes. Amounts repaid under the credit facility were subsequently drawn to pay a portion of the cash merger consideration for the purchase of Republic Property Trust.

In August and September 2007, the Company satisfied a $100 million 7.25% senior unsecured note and issued a $300 million 6.625% senior unsecured note due 2017. The net proceeds of the $300 million offering were $296.2 million and were used to pay down outstanding borrowings under the Company’s unsecured credit facility and for general corporate purposes. Amounts repaid under the credit facility were subsequently drawn to pay a portion of the cash merger consideration for the purchase of Republic Property Trust.

In September 2007, the quarterly Common Share dividend was increased to $0.625 per share from $0.62 per share. The Company’s annual Common Share dividend paid was $2.485 per share, $2.465 per share, and $2.445 per share in 2007, 2006, and 2005, respectively. In 2007, the Company’s dividend payout ratio was approximately 78.1% of Funds from operations (as defined below).

The Company has an effective S-3 shelf registration statement on file with the SEC (the “Shelf Registration Statement”). As of February 22, 2008, pursuant to the Shelf Registration Statement, the Trust had the capacity to issue up to $586.1 million in equity securities and the Operating Partnership had the capacity to issue up to $210.2 million in debt securities.

Off-Balance Sheet Arrangements

As of December 31, 2007, the Company had investments in and advances to unconsolidated joint ventures totaling $278.4 million.

Calculation of Funds from Operations

The National Association of Real Estate Investment Trusts (“NAREIT”) has issued a standard definition for Funds from operations (as defined below). The SEC has agreed to the disclosure of this non-GAAP financial measure on a per share basis in its Release No. 34-47226, Conditions for Use of Non-GAAP Financial Measures. The Company believes that the calculation of Funds from operations is helpful to investors and management as it is a measure of the Company’s operating performance that excludes depreciation and amortization and gains and losses from property dispositions. As a result, year over year comparison of Funds from operations reflects the impact on operations from trends in occupancy rates, rental rates, operating costs, development activities, general and administrative expenses, and interest costs, providing perspective not immediately apparent from net income. In addition, management believes that Funds from operations provides useful information to the investment community about the Company’s financial performance when compared to other REITs since Funds from operations is generally recognized as the standard for reporting the operating performance of a REIT. Funds from operations available to common shareholders is defined by NAREIT as net income (computed in accordance with generally accepted accounting principles (“GAAP”)), excluding gains (or losses) from sales of property, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Funds from operations available to common shareholders does not represent net income or cash flows from operations as defined by GAAP and does not

34

necessarily indicate that cash flows will be sufficient to fund cash needs. It should not be considered as an alternative to net income as an indicator of the Company’s operating performance or to cash flows as a measure of liquidity. Funds from operations available to common shareholders also does not represent cash flows generated from operating, investing or financing activities as defined by GAAP.

Funds from operations (“FFO”) available to common shareholders for the years ended December 31, 2007, 2006, and 2005 are as follows (in thousands, except per share amounts):

	Year Ended December 31,
	2007			2006			2005
Reconciliation of net income to FFO — basic
Net income	$	164,831		$	266,574		$	249,351
Basic — income available to common shareholders		164,831			266,574			249,351
Basic — income available to common shareholders per weighted average share	$	1.81		$	2.98		$	2.87
Adjustments:
Depreciation and amortization of unconsolidated joint ventures		6,494			2,871			1,316
Depreciation and amortization		162,833			149,606			147,669
Gain on property dispositions		(36,498	)		(136,036	)		(114,381	)
Minority interest share in addback for depreciation and amortization and gain on property dispositions		(5,820	)		(877	)		(1,363	)
Funds from operations available to common shareholders — basic	$	291,840		$	282,138		$	282,592
Basic Funds from operations available to common shareholders per weighted average share	$	3.20		$	3.16		$	3.25
Reconciliation of net income to FFO — diluted
Net income	$	164,831		$	266,574		$	249,351
Diluted — income available to common shareholders		164,831			266,574			249,351
Diluted — income available to common shareholders per weighted average share	$	1.80		$	2.95		$	2.82
Adjustments:
Depreciation and amortization of unconsolidated joint ventures		6,494			2,871			1,316
Depreciation and amortization		162,833			149,606			147,669
Gain on property dispositions		(36,498	)		(136,036	)		(114,381	)
Minority interest less preferred share distributions and excess of preferred unit redemption over carrying amount		7,556			11,786			10,018
Funds from operations available to common shareholders — diluted	$	305,216		$	294,801		$	293,973
Diluted Funds from operations available to common shareholders per weighted average share	$	3.18		$	3.12		$	3.20
Reconciliation of weighted average shares:
Weighted average common shares — all basic calculations		91,185			89,313			86,986
Dilutive shares for long term compensation plans		618			1,179			1,390
Diluted shares for net income calculations		91,803			90,492			88,376
Weighted average common units		4,190			3,895			3,555
Diluted shares for Funds from operations calculations		95,993			94,387			91,931

Inflation

Inflation has remained relatively low during the last three years, and as a result, it has not had a significant impact on the Company during this period. The $600 million Credit Facility bears interest at variable rates; therefore, the amount of interest payable under the $600 million Credit Facility is influenced by changes in short-term interest rates, which tend to be sensitive to inflation. To the extent an increase in inflation would result in increased operating costs, such as in insurance, real estate taxes and utilities, substantially all of the tenants’ leases require the tenants to absorb these costs as part of their rental obligations. In addition, inflation also may have the effect of increasing market rental rates.

35

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The following discussion about the Company’s risk management includes forward-looking statements that involve risks and uncertainties. Actual results could differ materially from the results discussed in the forward-looking statements.

The carrying value of cash and cash equivalents, restricted cash, accounts receivable, accounts payable, accrued interest, dividends and distributions payable and other liabilities are reasonable estimates of fair value because of the short-term nature of these instruments. The fair value of the Company’s long-term debt, which is based on estimates by management and on rates quoted on December 31, 2007 for comparable loans, is less than the aggregate carrying value by approximately $13.3 million at December 31, 2007.

The Company’s primary market risk exposure is to changes in interest rates. The Company is exposed to market risk related to its $600 million Credit Facility and certain other indebtedness as discussed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations - - Liquidity and Capital Resources.” The interest on the $600 million Credit Facility and certain other indebtedness is subject to fluctuations in the market.

The Company also uses long-term and medium-term debt as a source of capital. These debt instruments are typically issued at fixed interest rates. When these debt instruments mature, the Company typically refinances such debt at then-existing market interest rates which may be more or less than the interest rates on the maturing debt. In addition, the Company may attempt to reduce interest rate risk associated with a forecasted issuance of new debt. In order to reduce interest rate risk associated with these transactions, the Company occasionally enters into interest rate protection agreements.

If the interest rates for variable rate debt were 100 basis points higher or lower during 2007, the Company’s interest expense would have increased or decreased by $3.5 million. If the interest rate for the fixed rate debt maturing in 2008 was 100 basis points higher or lower than its current rate of 6.8%, the Company’s interest expense would have increased or decreased by $131,000.

The sensitivity analysis above assumes no changes in the Company’s financial structure. It also does not consider future fluctuations in interest rates or the specific actions that might be taken by management to mitigate the impact of such fluctuations.

The Company is also exposed to currency risk on its net investment in the United Kingdom. The Company does not believe that this currency risk exposure is material to its financial statements.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The dual presentation of financial statements for the Company is required by the SEC. The Company is comprised of two SEC registrants: Liberty Property Trust and Liberty Property Limited Partnership. Accordingly, financial statements are required for each registrant. The financial information contained within the two sets of financial statements is essentially the same.

36

Management’s Annual Report on Internal Control Over Financial Reporting

To the Shareholders of Liberty Property Trust:

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a — 15 (f) and 15d - 15(f). The Company’s internal control system was designed to provide reasonable assurance to the Company’s management and Board of Trustees regarding the preparation and fair presentation of published financial statements.

Under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, we assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2007. In making this assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commissions (COSO) in Internal Control — Integrated Framework. Based on our assessment we believe that, as of December 31, 2007, the Company’s internal control over financial reporting is effective based on those criteria.

The Company’s independent registered public accounting firm, Ernst & Young LLP, has issued an attestation report on the Company’s internal controls over financial reporting, which is included in this Annual Report on Form 10-K.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

February 26, 2008

37

Report of Independent Registered Public Accounting Firm

The Board of Trustees and Shareholders of Liberty Property Trust

We have audited Liberty Property Trust’s (the “Trust”) internal control over financial reporting as of December 31, 2007, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). The Trust’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Trust’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, Liberty Property Trust maintained, in all material respects, effective internal control over financial reporting as of December 31, 2007, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets as of December 31, 2007 and 2006, and the related consolidated statements of operations, shareholders’ equity, and cash flows for each of the three years in the period ended December 31, 2007 of Liberty Property Trust and our report dated February 26, 2008 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

Philadelphia, Pennsylvania
February 26, 2008

38

Report of Independent Registered Public Accounting Firm

The Board of Trustees and Shareholders of Liberty Property Trust

We have audited the accompanying consolidated balance sheets of Liberty Property Trust (the “Trust”) as of December 31, 2007 and 2006, and the related consolidated statements of operations, shareholders’ equity, and cash flows for each of the three years in the period ended December 31, 2007. Our audits also included the financial statement schedule listed in the Index at Item 15. These financial statements and schedule are the responsibility of the Trust’s management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Liberty Property Trust at December 31, 2007 and 2006, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2007, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Liberty Property Trust’s internal control over financial reporting as of December 31, 2007, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 26, 2008 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

Philadelphia, Pennsylvania
February 26, 2008

39

CONSOLIDATED BALANCE SHEETS OF LIBERTY PROPERTY TRUST
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)

	December 31,
	2007			2006
ASSETS
Real estate:
Land and land improvements	$	796,501		$	666,588
Buildings and improvements		4,434,731			3,735,583
Less accumulated depreciation		(863,609	)		(786,778	)
Operating real estate		4,367,623			3,615,393
Development in progress		328,138			538,521
Land held for development		247,124			195,332
Net real estate		4,942,885			4,349,246
Cash and cash equivalents		37,989			53,737
Restricted cash		34,567			55,671
Accounts receivable		18,416			20,753
Deferred rent receivable		80,087			71,894
Deferred financing and leasing costs, net		144,689			127,902
Investments in and advances to unconsolidated joint ventures		278,383			54,723
Assets held for sale		—			113,150
Prepaid expenses and other assets		101,733			63,835
Total assets	$	5,638,749		$	4,910,911
LIABILITIES
Mortgage loans	$	243,169		$	185,978
Unsecured notes		2,155,000			1,955,000
Credit facility		622,960			246,960
Accounts payable		44,666			40,633
Accrued interest		39,725			36,297
Dividends and distributions payable		59,849			58,961
Other liabilities		263,738			217,751
Total liabilities		3,429,107			2,741,580
Minority interest		372,621			297,727
SHAREHOLDERS’ EQUITY
Common shares of beneficial interest, $.001 par value, 183,987,000 shares authorized, 92,817,879 (includes 1,249,909 in treasury) and 90,972,979 (includes 59,100 in treasury) shares issued and outstanding as of December 31, 2007 and 2006, respectively		93			91
Additional paid-in capital		1,984,141			1,906,403
Accumulated other comprehensive income		21,378			20,323
Distributions in excess of net income		(116,640	)		(53,886	)
Common shares held in treasury, at cost, 1,249,909 and 59,100 shares as of December 31, 2007 and 2006, respectively		(51,951	)		(1,327	)
Total shareholders’ equity		1,837,021			1,871,604
Total liabilities and shareholders’ equity	$	5,638,749		$	4,910,911

See accompanying notes.

40

CONSOLIDATED STATEMENTS OF OPERATIONS OF LIBERTY PROPERTY TRUST
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

	Year Ended December 31,
	2007			2006			2005
OPERATING REVENUE
Rental	$	487,884		$	433,952		$	421,224
Operating expense reimbursement		210,863			184,407			166,952
Total operating revenue		698,747			618,359			588,176
OPERATING EXPENSE
Rental property		147,326			125,895			117,593
Real estate taxes		73,784			65,757			59,412
General and administrative		54,116			46,157			38,113
Depreciation and amortization		158,355			134,433			125,703
Total operating expenses		433,581			372,242			340,821
Operating income		265,166			246,117			247,355
OTHER INCOME (EXPENSE)
Interest and other income		11,748			8,714			6,961
Interest expense		(129,301	)		(111,514	)		(110,995	)
Total other income (expense)		(117,553	)		(102,800	)		(104,034	)
Income before property dispositions, income taxes, minority interest and equity in (loss) earnings of unconsolidated joint ventures		147,613			143,317			143,321
Gain on property dispositions		1,452			17,628			86,114
Income taxes		709			(288	)		(14,827	)
Minority interest		(23,693	)		(19,894	)		(21,519	)
Equity in (loss) earnings of unconsolidated joint ventures		(226	)		1,432			2,540
Income from continuing operations		125,855			142,195			195,629
Discontinued operations, net of minority interest (including net gain on property dispositions of $33,622, $112,620, and $36,096 for the years ended December 31, 2007, 2006 and 2005, respectively)		38,976			124,379			53,722
Net income	$	164,831		$	266,574		$	249,351
Earnings per share
Basic:
Income from continuing operations	$	1.38		$	1.59		$	2.25
Income from discontinued operations		0.43			1.39			0.62
Income per common share — basic	$	1.81		$	2.98		$	2.87
Diluted:
Income from continuing operations	$	1.38		$	1.58		$	2.21
Income from discontinued operations		0.42			1.37			0.61
Income per common share — diluted	$	1.80		$	2.95		$	2.82
Weighted average number of common shares outstanding
Basic		91,185			89,313			86,986
Diluted		91,803			90,492			88,376

See accompanying notes.

41

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY OF LIBERTY PROPERTY TRUST
(IN THOUSANDS)

	Common					Accumulated						Common
	Shares of		Additional			Other			Distributions			Shares			Total
	Beneficial		Paid-In			Comprehensive			in Excess of			Held			Shareholders’
	Interest		Capital			Income			Net Income			in Treasury			Equity
Balance at January 1, 2005	$	86	$	1,705,913		$	25,105		$	(133,518	)	$	(1,327	)	$	1,596,259
Net proceeds from the issuance of common shares		2		86,460			—			—			—			86,462
Net income		—		—			—			249,351			—			249,351
Distributions on common shares		—		—			—			(214,386	)		—			(214,386	)
Noncash compensation		—		5,032			—			—			—			5,032
Minority interest reclassification		—		1,663			—			—			—			1,663
Foreign currency translation adjustment		—		—			(15,199	)		—			—			(15,199	)
Balance at December 31, 2005		88		1,799,068			9,906			(98,553	)		(1,327	)		1,709,182
Net proceeds from the issuance of common shares		3		87,040			—			—			—			87,043
Net income		—		—			—			266,574			—			266,574
Distributions on common shares		—		—			—			(221,907	)		—			(221,907	)
Noncash compensation		—		6,212			—			—			—			6,212
Minority interest reclassification		—		14,083			—			—			—			14,083
Foreign currency translation adjustment		—		—			10,417			—			—			10,417
Balance at December 31, 2006		91		1,906,403			20,323			(53,886	)		(1,327	)		1,871,604
Net proceeds from the issuance of common shares		2		70,353			—			—			—			70,355
Net income		—		—			—			164,831			—			164,831
Distributions on common shares		—		—			—			(227,585	)		—			(227,585	)
Purchase of treasury shares		—		—			—			—			(50,624	)		(50,624	)
Noncash compensation		—		8,128			—			—			—			8,128
Minority interest reclassification		—		(743	)		—			—			—			(743	)
Foreign currency translation adjustment		—		—			1,055			—			—			1,055
Balance at December 31, 2007	$	93	$	1,984,141		$	21,378		$	(116,640	)	$	(51,951	)	$	1,837,021

See accompanying notes.

42

CONSOLIDATED STATEMENTS OF CASH FLOWS OF LIBERTY PROPERTY TRUST
(IN THOUSANDS)

	Year Ended December 31,
	2007			2006			2005
OPERATING ACTIVITIES
Net income	$	164,831		$	266,574		$	249,351
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		163,665			151,966			150,722
Amortization of deferred financing costs		4,137			4,244			4,758
Equity in loss (earnings) of unconsolidated joint ventures		226			(1,432	)		(2,540	)
Distributions from unconsolidated joint ventures		3,550			5,692			4,651
Minority interest in net income		25,479			25,469			22,965
Gain on property dispositions		(35,074	)		(130,248	)		(122,210	)
Noncash compensation		8,128			6,212			5,032
Changes in operating assets and liabilities:
Restricted cash		26,211			(21,692	)		3,849
Accounts receivable		4,634			(6,879	)		1,804
Deferred rent receivable		(13,455	)		924			(6,290	)
Prepaid expenses and other assets		(14,145	)		(14,394	)		(12,488	)
Accounts payable		3,974			7,648			8,894
Accrued interest		3,428			1,405			(102	)
Other liabilities		39,070			49,412			52,353
Net cash provided by operating activities		384,659			344,901			360,749
INVESTING ACTIVITIES
Investment in properties		(307,846	)		(372,610	)		(324,340	)
Cash paid for business, net of cash acquired		(626,007	)		—			—
Investments in and advances to unconsolidated joint ventures		(227,385	)		(6,239	)		(13,790	)
Net proceeds from disposition of properties/land		996,474			492,548			415,144
Investment in development in progress		(455,784	)		(359,959	)		(235,078	)
Investment in land held for development		(137,051	)		(79,976	)		(91,436	)
Increase in deferred leasing costs		(39,232	)		(29,034	)		(37,133	)
Net cash used in investing activities		(796,831	)		(355,270	)		(286,633	)
FINANCING ACTIVITIES
Net proceeds from issuance of common shares		70,355			87,043			86,462
Purchase of treasury shares		(50,624	)		—			—
Net proceeds from issuance of preferred units		99,958			26,305			48,686
Redemption of preferred units		(23,653	)		—			—
Net proceeds from issuance of notes payable		415,063			—			—
Repayments of notes payable		(415,063	)		—			—
Net proceeds from issuance of unsecured notes		446,205			295,393			296,424
Repayments of unsecured notes		(250,000	)		(100,000	)		—
Repayments of mortgage loans		(16,365	)		(56,406	)		(173,926	)
Proceeds from credit facility		1,363,050			725,025			784,800
Repayments on credit facility		(987,050	)		(733,515	)		(841,350	)
Increase in deferred financing costs		(1,224	)		(1,635	)		(3,465	)
Distributions paid on common shares		(226,718	)		(219,873	)		(212,305	)
Distributions to minority interests		—			—			(3,937	)
Distributions paid on units		(27,612	)		(22,664	)		(20,859	)
Net cash provided by (used in) financing activities		396,322			(327	)		(39,470	)
(Decrease) increase in cash and cash equivalents		(15,850	)		(10,696	)		34,646
Increase (decrease) in cash and cash equivalents related to foreign currency translation		102			2,804			(6,684	)
Cash and cash equivalents at beginning of year		53,737			61,629			33,667
Cash and cash equivalents at end of year	$	37,989		$	53,737		$	61,629
SUPPLEMENTAL DISCLOSURE OF NONCASH TRANSACTIONS
Write-off of fully depreciated property and deferred costs	$	102,902		$	87,424		$	83,794
Issuance of operating partnership common units		—			30,000			—
Acquisition of properties		(73,556	)		(3,066	)		(51,716	)
Assumption of mortgage loans		73,556			3,066			51,716

See accompanying notes.

43

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF LIBERTY PROPERTY TRUST

1. ORGANIZATION

Liberty Property Trust (the “Trust”) is a self-administered and self-managed Maryland real estate investment trust (a “REIT”). Substantially all of the Trust’s assets are owned directly or indirectly, and substantially all of the Trust’s operations are conducted directly or indirectly, by Liberty Property Limited Partnership (the “Operating Partnership” and, together with the Trust and their consolidated subsidiaries, the “Company”). The Trust is the sole general partner and also a limited partner of the Operating Partnership, owning 95.6% of the common equity of the Operating Partnership at December 31, 2007. The Company provides leasing, property management, development, acquisition, and other tenant-related services for a portfolio of industrial and office properties which are located principally within the Mid-Atlantic, Southeastern, Midwestern and Southwestern United States and the United Kingdom.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“US GAAP”) requires management to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Principles of Consolidation

The consolidated financial statements of the Company include the Trust, the Operating Partnership and wholly owned subsidiaries and those subsidiaries in which the Company owns a majority voting interest with the ability to control operations of the subsidiaries and where no approval, veto or other important rights have been granted to the minority shareholders. All significant intercompany transactions and accounts have been eliminated.

Reclassifications

Certain amounts from prior years have been reclassified to conform to current-year presentation.

Real Estate and Depreciation

The properties are recorded at cost and are depreciated using the straight line method over their estimated useful lives. The estimated useful lives are as follows:

Building and improvements	40 years (blended)
Capital improvements	15 — 20 years
Equipment	5 — 10 years
Tenant improvements	Term of the related lease

Expenditures directly related to acquisition or improvement of real estate, including interest and other costs capitalized during development, are included in net real estate and are stated at cost. The capitalized costs include pre-construction costs essential to the development of the property, development and construction costs, interest costs, real estate taxes, development-related salaries and other costs incurred during the period of development. Expenditures for maintenance and repairs are charged to operations as incurred.

In accordance with the Financial Accounting Standards Board (“FASB”) Statement of Financial Standards (“SFAS”) No. 141, “Business Combinations,” the Company allocates the purchase price of real estate to land, building and improvements and intangibles based on the relative fair value of each component. The value ascribed to in-place leases is based on the rental rates for the existing leases compared to market rent for leases of similar terms and present valuing the difference based on market interest rates. Origination values are also assigned to in-place leases, and, where appropriate, value is assigned to customer relationships. The Company depreciates the amounts allocated to building and improvements over 40 years and the amounts allocated to intangible assets relating to in-place leases, which are included in deferred financing and leasing costs and other liabilities in the accompanying consolidated balance sheets, over the remaining term of the related leases.

Once a property is designated as held for sale, no further depreciation expense is recorded. Operations for properties identified as held for sale and/or sold where no continuing involvement exists are presented in discontinued operations for all periods presented.

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The Company evaluates its real estate investments, its investments in unconsolidated joint ventures and its goodwill upon occurrence of a significant adverse change in its operations to assess whether any impairment indicators are present that affect the recovery of the recorded value. If any real estate investment or investment in unconsolidated joint ventures is considered impaired, a loss is recognized to reduce the carrying value of the property to its estimated fair value.

Investments in Unconsolidated Joint Ventures

The Company accounts for its investments in unconsolidated joint ventures using the equity method of accounting as the Company exercises significant influence, but does not control these entities. Under the equity method of accounting, the net equity investment of the Company is reflected in the accompanying consolidated balance sheets and the Company’s share of net income from the joint ventures is included in the accompanying consolidated statements of operations.

Cash and Cash Equivalents

Highly liquid investments with a maturity of three months or less when purchased are classified as cash equivalents.

Restricted Cash

Restricted cash includes tenant security deposits and escrow funds that the Company maintains pursuant to certain mortgage loans. Restricted cash also includes the undistributed proceeds from the sale of residential land in Kent County, United Kingdom.

Accounts Receivable

The Company’s accounts receivable are comprised of rents and charges for property operating costs due from tenants. The Company periodically performs a detailed review of amounts due from tenants to determine if accounts receivable balances are collectible. Based on this review, accounts receivable are reduced by an allowance for doubtful accounts. The Company considers tenant credit quality and payment history and general economic conditions in determining the allowance for doubtful accounts. If the accounts receivable balance is subsequently deemed uncollectible, the receivable and allowance for doubtful account balance is written off.

The allowance for doubtful accounts at December 31, 2007 and 2006 was $6.0 million and $5.1 million, respectively.

Deferred Rent Receivable

The Company’s deferred rent receivable represents the cumulative difference between rent revenue recognized on a straight line basis and contractual payments due under the terms of tenant leases.

Goodwill

Goodwill on the Company’s consolidated balance sheet represents the amounts paid in excess of the fair value of the net assets acquired from business acquisitions accounted for under SFAS No. 141, “Business Combinations”. Pursuant to SFAS No. 142, “Accounting for Goodwill and Intangible Assets,” goodwill is not amortized to expense but rather is analyzed for impairment. In conjunction with the purchase of Republic, goodwill and other intangibles of $13 million were recorded. The goodwill is assigned to the Northern Virginia/Washington, D.C. operation which is part of the Philadelphia reportable segment and is included in prepaid expenses and other assets on the Company’s consolidated balance sheet.

Revenues

The Company earns rental income under operating leases with tenants. Rental income is recognized on a straight line basis over the applicable lease term. Operating expense reimbursements consisting of amounts due from tenants for real estate taxes, utilities and other recoverable costs are recognized as revenue in the period in which the corresponding expenses are incurred.

Termination fees (included in rental revenue) are fees that the Company has agreed to accept in consideration for permitting certain tenants to terminate their lease prior to the contractual expiration date. The Company recognizes termination fees in accordance with Staff Accounting Bulletin 104 when the following conditions are met:

a)	the termination agreement is executed,
b)	the termination fee is determinable,
c)	all landlord services, pursuant to the terminated lease, have been rendered, and
d)	collectibility of the termination fee is assured.

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Deferred Financing and Leasing Costs

Costs incurred in connection with financing or leasing are capitalized and amortized over the term of the related loan or lease. Deferred financing cost amortization is reported as interest expense. Intangible assets related to acquired in-place leases are amortized over the terms of the related leases.

Costs Incurred for Preferred Unit Issuance

Costs incurred in connection with the Company’s preferred unit issuances are reflected as a reduction of minority interest.

Income per Common Share

The following table sets forth the computation of basic and diluted income per common share (in thousands, except per share amounts):

	2007						2006
			Weighted						Weighted
			Average						Average
	Income		Shares		Per		Income		Shares		Per
	(Numerator)		(Denominator)		Share		(Numerator)		(Denominator)		Share
Basic income from continuing operations
Income from continuing operations	$	125,855		91,185	$	1.38	$	142,195		89,313	$	1.59
Dilutive shares for long-term compensation plans		—		618				—		1,179
Diluted income from continuing operations
Income from continuing operations and assumed conversions		125,855		91,803	$	1.38		142,195		90,492	$	1.58
Basic income from discontinued operations
Discontinued operations net of minority interest		38,976		91,185	$	0.43		124,379		89,313	$	1.39
Dilutive shares for long-term compensation plans		—		618				—		1,179
Diluted income from discontinued operations
Discontinued operations net of minority interest		38,976		91,803	$	0.42		124,379		90,492	$	1.37
Basic income per common share
Net income		164,831		91,185	$	1.81		266,574		89,313	$	2.98
Dilutive shares for long-term compensation plans		—		618				—		1,179
Diluted income per common share
Net income and assumed conversions	$	164,831		91,803	$	1.80	$	266,574		90,492	$	2.95

	2005
			Weighted
			Average
	Income		Shares		Per
	(Numerator)		(Denominator)		Share
Basic income from continuing operations
Income from continuing operations	$	195,629		86,986	$	2.25
Dilutive shares for long-term compensation plans		—		1,390
Diluted income from continuing operations
Income from continuing operations and assumed conversions		195,629		88,376	$	2.21
Basic income from discontinued operations
Discontinued operations net of minority interest		53,722		86,986	$	0.62
Dilutive shares for long-term compensation plans		—		1,390
Diluted income from discontinued operations
Discontinued operations net of minority interest		53,722		88,376	$	0.61
Basic income per common share
Net income		249,351		86,986	$	2.87
Dilutive shares for long-term compensation plans		—		1,390
Diluted income per common share
Net income and assumed conversions	$	249,351		88,376	$	2.82

Dilutive shares for long-term compensation plans represent the vested and unvested Common Shares outstanding during the year as well as the dilutive effect of outstanding options. The anti-dilutive options that were excluded from the computation of diluted income per common share in 2007, 2006 and 2005 were 629,000, 103,000, and 290,000, respectively.

Fair Value of Financial Instruments

The carrying value of cash and cash equivalents, restricted cash, accounts receivable, accounts payable, accrued interest, dividends and distributions payable and other liabilities are reasonable estimates of fair values because of the

46

short-term nature of these instruments. The fair value of the Company’s long-term debt, which is based on estimates by management and on rates quoted on December 31, 2007 for comparable loans, is less than the aggregate carrying value by approximately $13.3 million at December 31, 2007.

Income Taxes

The Company has elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the “Code”). As a result, the Company generally is not subject to federal income taxation at the corporate level to the extent it distributes annually at least 100% of its REIT taxable income, as defined in the Code, to its shareholders and satisfies certain other organizational and operational requirements. The Company has met these requirements and, accordingly, no provision has been made for federal income taxes in the accompanying consolidated financial statements. If the Company fails to qualify as a REIT in any taxable year, the Company will be subject to federal income tax on its taxable income at regular corporate rates (including any alternative minimum tax) and may not be able to qualify as a REIT for the four subsequent taxable years. Even as a REIT, the Company may be subject to certain state and local income and property taxes, and to federal income and excise taxes on undistributed taxable income.

Several of the Company’s subsidiaries are taxable REIT subsidiaries (each a “TRS”) and are subject to federal income taxes. In general, a TRS may perform additional services for tenants and generally may engage in real estate or non-real estate business that are not permitted REIT activities. The Company is also taxed in certain states, the United Kingdom, and Luxembourg. Accordingly, the Company has recognized federal, state and foreign income taxes in accordance with US GAAP, as applicable.

Certain of the Company’s taxable REIT subsidiaries have net operating loss carryforwards available of approximately $7.1 million. These carryforwards begin to expire in 2018. The Company has considered estimated future taxable income and have determined that a valuation allowance for the full carrying value of net operating loss carryforwards is appropriate.

The Federal tax cost basis of the real estate at December 31, 2007 was $5.7 billion and at December 31, 2006 was $5.0 billion.

Share Based Compensation

At December 31, 2007, the Company had a share-based employee compensation plan as fully described in Note 10. Effective January 1, 2006 the Company adopted for its share-based employee compensation plan (the “Plan”) the provisions of SFAS No. 123(R), “Share-Based Payment” (“SFAS No. 123(R)”), using the modified prospective application method. In accordance with SFAS No. 123(R), share-based compensation cost is measured at the grant date, based on the fair value of the award, and is recognized as expense over the employees’ requisite service period. In January 2003, the Company adopted the fair value recognition provisions of SFAS No. 123, “Accounting for Stock-Based Compensation”, prospectively for all employee option awards granted, modified, or settled after January 1, 2003. Prior to 2003, the Company accounted for the Plan under the recognition and measurement provisions of Accounting Principles Board (“APB”) Opinion No. 25, “Accounting for Stock Issued to Employees”, and related Interpretations.

Under the modified prospective application method, results for prior periods have not been restated to reflect the effects of implementing SFAS No. 123(R).

Certain restricted share awards and option awards are subject to accelerated vesting upon retirement. The Company historically accounted for these awards over the explicit service period. Upon adoption of SFAS No. 123(R), the Company began expensing new awards to individuals qualifying for share acceleration over the substantive service period. Compensation costs relating to awards granted prior to the adoption of SFAS No. 123(R) continue to be expensed over the explicit service period. Had the Company accounted for those awards over the substantive service period, compensation costs for the year ended December 31, 2005 would have increased by $0.2 million.

Included in compensation costs for the years ended December 31, 2007 and 2006 were charges of $0.6 million and $0.2 million, respectively, which resulted from the accelerated vesting of unvested options and shares during the respective years.

Foreign Currency Translation

The functional currency of the Company’s United Kingdom operations is pounds sterling. The Company translates the financial statements for the United Kingdom operations into US dollars. Gains and losses resulting from this translation do not impact the results of operations and are included in accumulated other comprehensive income as a separate component of shareholders’ equity. Accumulated other comprehensive income consists solely of foreign

47

currency translation adjustments as described. Other comprehensive income (loss) was $1.1 million, $10.4 million and ($15.2 million) for the years ended December 31, 2007, 2006 and 2005, respectively. Upon sale or upon complete or substantially complete liquidation of a foreign investment, the gain or loss on the sale will include the cumulative translation adjustments that have been previously recorded in other comprehensive income.

Recently Issued Accounting Standards

FIN 48

In July 2006, the FASB issued FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes” (“FIN 48”). FIN 48 is an interpretation of SFAS No. 109, “Accounting for Income Taxes,” and it seeks to reduce the diversity in practice associated with certain aspects of measurement and recognition in accounting for income taxes. In addition, FIN 48 provides guidance on derecognition, classification, interest and penalties, and accounting in interim periods and requires expanded disclosure with respect to the uncertainty in income taxes.

The Company adopted the provisions of FIN 48 on January 1, 2007. As a result of the implementation of FIN 48, no uncertain tax positions were identified which would result in the recording of a liability for unrecognized tax benefits, and correspondingly no benefit recognition was identified that would affect the effective tax rate. Additionally, there are no possibly significant unrecognized tax benefits which are reasonably expected to occur within the next 12 months. The Company’s policy is to recognize interest accrued related to unrecognized benefits in interest expense and penalties in other expense. There are no interest and penalties deducted in the current period and no interest and penalties accrued at December 31, 2007 and December 31, 2006, respectively.

The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction, certain state and local jurisdictions, the United Kingdom and Luxembourg. With few exceptions, the Company is no longer subject to U.S. federal, state, and local, or United Kingdom and Luxembourg examinations by tax authorities for years before 2002.

SFAS No. 157

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” (“SFAS No. 157”), which defines fair value, establishes a framework for consistently measuring fair value under US GAAP and expands disclosures about fair value measurements. SFAS No. 157 is effective for the Company beginning January 1, 2008, and the provisions of SFAS No. 157 will be applied prospectively as of that date. The Company does not anticipate that the adoption of this statement will have a material effect on its financial position or results of operations.

SFAS No. 159

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities” (“SFAS No. 159”). SFAS No. 159 provides companies with an option to report selected financial assets and liabilities at fair value and establishes presentation and disclosure requirements designed to facilitate comparisons between companies that choose different measurement attributes for similar types of assets and liabilities. SFAS No. 159 is effective for the Company beginning January 1, 2008. The Company does not anticipate that the adoption of this statement will have a material effect on its financial position or results of operations.

SFAS No. 141(R)

In December 2007, the FASB issued SFAS No. 141(R), “Applying the Acquisition Method” (“SFAS No. 141(R)”). This statement changes the accounting for acquisitions specifically eliminating the step acquisition model, changing the recognition of contingent consideration from being recognized when it is probable to being recognized at the time of acquisition, disallowing the capitalization of transaction costs and delays when restructurings related to acquisitions can be recognized. SFAS No. 141(R) is effective for fiscal years beginning after December 15, 2008 and will impact the accounting for acquisitions made beginning January 1, 2009. The Company does not anticipate that the adoption of SFAS No. 141(R) will have a material effect on the Company’s financial position or results of operations.

SFAS No. 160

In December 2007, the FASB issued SFAS No. 160, “Accounting for Noncontrolling Interests” (“SFAS No. 160”). Under this statement, noncontrolling interests are considered equity and thus the Company’s practice of reporting minority interests in the mezzanine section of the balance sheet will be eliminated. Also, under SFAS No. 160, net income will encompass the total income of all consolidated subsidiaries and there will be separate disclosure on the face of the income statement of the attribution of that income between controlling and noncontrolling interests. Last, increases and decreases in noncontrolling interests will be treated as equity transactions. The standard is effective for the year ending December 31, 2009. The Company does not anticipate that the adoption of this statement will have a material effect on its financial position or results of operations.

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3. REAL ESTATE

The Company owns and operates industrial and office properties located principally in suburban mixed-use developments or business parks. The carrying value of these properties by type as of December 31, 2007 and 2006 is as follows (in thousands):

	Land		Buildings
	And Land		And				Accumulated
	Improvements		Improvements		Total		Depreciation
2007
Industrial properties	$	338,237	$	1,719,541	$	2,057,778	$	382,657
Office properties		458,264		2,715,190		3,173,454		480,952
2007 Total	$	796,501	$	4,434,731	$	5,231,232	$	863,609
2006
Industrial properties	$	300,716	$	1,606,151	$	1,906,867	$	360,903
Office properties		365,872		2,129,432		2,495,304		425,875
2006 Total	$	666,588	$	3,735,583	$	4,402,171	$	786,778

Depreciation expense was $135.4 million in 2007, $124.9 million in 2006 and $123.3 million in 2005.

As of December 31, 2007, the Company had commenced development on 28 properties, which upon completion are expected to comprise 4.8 million square feet of leaseable space. As of December 31, 2007, $328.1 million had been expended for the development of these projects and an additional $179.0 million is estimated to be required for completion.

Additionally, unconsolidated joint ventures in which the Company had an interest had commenced development on four properties, which upon completion are expected to comprise 527,000 square feet of leaseable space. As of December 31, 2007, $116.8 million had been expended for the development of these projects and an additional $53.5 million is estimated to be required for completion.

Information on the operating properties the Company sold during the years ended December 31, 2007 and 2006 is as follows:

2007 Sales
	Number of		Leaseable
Segment	Buildings		Square Feet		Proceeds
					(in thousands)
Delaware Valley Southeastern Pennsylvania		1		141,714	$	8,650
Midwest Lehigh Valley		1		289,800		13,775
Other		60		4,257,477		317,600
Mid-Atlantic		6		399,258		21,363
Florida		2		152,219		8,152
Total		70		5,240,468	$	369,540

2006 Sales
	Number of		Leaseable
Segment	Buildings		Square Feet		Proceeds
					(in thousands)
Delaware Valley
Southeastern Pennsylvania		3		1,146,940	$	101,700
Other		3		155,056		10,760
Midwest
Lehigh Valley		5		716,758		109,255
Other		16		2,519,409		134,375
Mid-Atlantic		16		1,449,464		139,300
Florida		3		147,262		7,474
Total		46		6,134,889	$	502,864

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4. INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES

Listed below are the unconsolidated joint ventures in which the Company has a noncontrolling interest. The Company receives fees from these joint ventures for services it provides. These services include property management, leasing, development and administration. The Company may also receive a promoted interest if certain return thresholds are met. These fees are included in interest and other income in the accompanying consolidated statements of operations.

Liberty Venture I, LP

The Company has a 25% interest in Liberty Venture I, LP, an entity engaged in ownership of industrial properties in New Jersey.

As of December 31, 2007, the joint venture owned 24 industrial properties totaling 3.1 million square feet and 43 acres of developable land.

The Company recognized $802,000, $634,000, and $934,000 in fees for services during the years ended December 31, 2007, 2006 and 2005, respectively.

Kings Hill Unit Trust

On December 14, 2005, the Company entered into a joint venture agreement (“Kings Hill Unit Trust”) with Doughty Hanson & Co. Real Estate. The Company sold 15 properties with a net book value of $125.8 million to the joint venture for proceeds of $219.9 million. In addition, the Company holds a $6.0 million note receivable from the Kings Hill Unit Trust and retained a 20% ownership interest in the joint venture. The note receivable bears interest at a 9% rate. The Company recognized a $75.1 million gain net of $14.5 million of tax on the sale of the properties to the Kings Hill Unit Trust. Due to the Company’s continuing involvement in this joint venture, the operations to the date of sale, as well as the gain on sale and related taxes are included in income from continuing operations in the accompanying consolidated statements of operations. The properties which were sold are industrial and office properties and were included in the Company’s United Kingdom segment.

As of December 31, 2007, the joint venture owned 10 office properties and five industrial properties totaling 535,000 square feet.

Income from fees and interest was $1.6 million and $1.3 million during the years ended December 31, 2007 and 2006, respectively.

Liberty/Commerz 1701 JFK Boulevard, LP

On April 13, 2006, the Company entered into a joint venture (“Liberty/Commerz 1701 JFK Boulevard, LP”) with an affiliate of Commerzleasing und Immobilien AG, a wholly owned subsidiary of Commerzbank AG, pursuant to which it sold an 80% interest in the equity of Comcast Center, a 1.25 million square foot office tower the Company is developing in Philadelphia, Pennsylvania. The transaction valued the property at $512 million. In connection with the transaction, the joint venture obtained a $324 million forward loan commitment at a rate of 6.15% assuming the loan closes in March 2008.

Under the terms of the joint venture arrangement, the Company is obligated to complete development of the building, the estimated cost of which is approximately $495 million, and is also obligated to complete the initial lease up of the property. Based on the updated leasing schedule the Company may have to fund $5.2 million in rent support. Payments under the rent support agreement will be reduced by interest due the Company until the $324 million loan is funded. The criteria for sale recognition in accordance with SFAS No. 66, “Accounting for the Sale of Real Estate,” have not been met and this transaction is accounted for as a financing arrangement.

Liberty Illinois, LP

On April 25, 2006, the Company entered into a joint venture (“Liberty Illinois, LP”) with the New York State Common Retirement Fund, selling a 75% equity interest in six industrial properties totaling 2.1 million square feet and 104 acres of developable land. The joint venture valued the buildings and land at $125.0 million.

As of December 31, 2007, the joint venture owned 14 industrial properties totaling 4.6 million square feet and 393 acres of developable land.

The Company recognized $791,000 and $777,000 in fees for services during the years ended December 31, 2007 and 2006, respectively.

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Blythe Valley JV Sarl

On September 10, 2007, the Company entered into a joint venture to acquire Blythe Valley Park, West Midlands, UK for $325 million. The park consists of 491,000 square feet of office properties and 98 acres of developable land. The Company holds a $3.9 million note receivable from Blythe Valley JV Sarl and has a 20% interest in the joint venture.

The Company recognized $446,000 in fees for services during the year ended December 31, 2007.

Liberty Washington, LP

On October 4, 2007, the Company acquired Republic Property Trust (“Republic Acquisition”), a Maryland real estate investment trust and Republic Property Limited Partnership, a Delaware limited partnership and Republic’s operating partnership (together, “Republic”) for $913 million. The acquisition of Republic was completed through the merger of Republic with a wholly owned subsidiary of the Company and the merger of Republic’s operating partnership with the Company’s Operating Partnership. Republic operated a portfolio consisting of 2.4 million square feet of office space, six acres of developable land, and a redevelopment property that, when completed, is expected to contain an additional 176,000 square feet of office space in the Northern Virginia and Washington, D.C. markets.

Concurrently, the Company formed a joint venture with New York State Common Retirement Fund to own and manage the Republic portfolio (“Republic Disposition”). The joint venture, in which the Company holds a 25% interest, purchased the Republic real estate assets for $900 million. The acquisition of Republic resulted in the Company recording $13 million in goodwill and other intangibles. In addition, the Company holds a $59.5 million note receivable from Liberty Washington, LP. The note bears interest at 5.25% and is due in September, 2008.

The Company recognized $1.3 million in fees for services during the year ended December 31, 2007.

Other Joint Ventures

As of December 31, 2007, the Company had a 50% ownership interest in three additional unconsolidated joint ventures. One of these joint ventures has one operating property and investments in properties under development and land. The other two joint ventures have investments in properties under development, land or in leaseholds and do not operate or own operating properties.

The Company’s share of each of the joint venture’s earnings is included in equity in (loss) earnings of unconsolidated joint ventures in the accompanying consolidated statements of operations.

The condensed balance sheets as of December 31, 2007 and 2006 and statements of operations for Liberty Venture I, LP, Liberty Illinois, LP, Kings Hill Unit Trust, Blythe Valley JV Sarl, Liberty Washington, LP and other unconsolidated joint ventures for the years ended December 31, 2007, 2006 and 2005 are as follows (in thousands):

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Balance Sheets:

	December 31, 2007
	Liberty									Blythe
	Venture I,			Kings Hill			Liberty			Valley JV			Liberty
	LP			Unit Trust			Illinois, LP			Sarl			Washington, LP			Other			Total
Real estate assets	$	118,030		$	231,399		$	225,405		$	267,488		$	802,146		$	14,586		$	1,659,054
Accumulated depreciation		(13,115	)		(8,385	)		(6,533	)		(2,004	)		(5,746	)		(60	)		(35,843	)
Real estate assets, net		104,915			223,014			218,872			265,484			796,400			14,526			1,623,211
Development in progress		—			—			—			—			76,483			40,694			117,177
Land held for development		2,733			—			41,008			48,712			7,859			28,201			128,513
Other assets		24,185			17,551			11,871			18,716			19,630			15,513			107,466
Total assets	$	131,833		$	240,565		$	271,751		$	332,912		$	900,372		$	98,934		$	1,976,367
Debt	$	81,216		$	188,765		$	145,400		$	251,654		$	339,120		$	43,249		$	1,049,404
Other liabilities		2,830			50,656			3,677			40,399			8,508			3,834			109,904
Equity		47,787			1,144			122,674			40,859			552,744			51,851			817,059
Total liabilities and equity	$	131,833		$	240,565		$	271,751		$	332,912		$	900,372		$	98,934		$	1,976,367
Company’s net investment in unconsolidated joint ventures (1)	$	11,352		$	6,002		$	24,729		$	11,773		$	197,622		$	26,905		$	278,383

	December 31, 2006
	Liberty									Blythe
	Venture I,			Kings Hill			Liberty			Valley JV		Liberty
	LP			Unit Trust			Illinois, LP			Sarl		Washington, LP		Other		Total
Real estate assets	$	116,324		$	228,120		$	119,787		$	—	$	—	$	—	$	464,231
Accumulated depreciation		(10,183	)		(4,213	)		(1,842	)		—		—		—		(16,238	)
Real estate assets, net		106,141			223,907			117,945			—		—		—		447,993
Development in progress		—			—			28,420			—		—		24,088		52,508
Land held for development		2,733			—			8,246			—		—		31,078		42,057
Other assets		13,723			20,838			6,214			—		—		13,024		53,799
Total assets	$	122,597		$	244,745		$	160,825		$	—	$	—	$	68,190	$	596,357
Debt	$	74,063		$	186,010		$	86,681		$	—	$	—	$	10,600	$	357,354
Other liabilities		1,182			49,584			5,005			—		—		4,420		60,191
Equity		47,352			9,151			69,139			—		—		53,170		178,812
Total liabilities and equity	$	122,597		$	244,745		$	160,825		$	—	$	—	$	68,190	$	596,357
Company’s net investment in unconsolidated joint ventures (1)	$	11,293		$	7,527		$	11,259		$	—	$	—	$	24,644	$	54,723

(1) Differences between the Company’s net investment in unconsolidated joint ventures and its underlying equity in the net assets of the venture is primarily a result of the deferral of gains associated with the sales of properties to joint ventures in which the Company retains an ownership interest and loans made to the joint ventures by the Company. Deferred gains are amortized to equity in (loss) earnings of joint ventures over the average estimated useful lives of the assets sold.

52

Statements of Operations:

	Year Ended December 31, 2007
	Liberty									Blythe
	Venture I,			Kings Hill			Liberty			Valley JV			Liberty
	LP			Unit Trust			Illinois, LP			Sarl			Washington, LP			Other			Total
Total revenue	$	18,457		$	19,696		$	17,360		$	5,920		$	18,203		$	397		$	80,033
Operating expense		5,807			2,374			4,433			5,265			4,273			131			22,283
		12,650			17,322			12,927			655			13,930			266			57,750
Interest		(4,240	)		(14,583	)		(6,297	)		(6,009	)		(4,299	)		(253	)		(35,681	)
Depreciation and amortization		(4,228	)		(7,058	)		(6,316	)		(2,201	)		(8,969	)		(70	)		(28,842	)
Other income/(expense)		(76	)		(645	)		(266	)		(220	)		(1,337	)		359			(2,185	)
Gain on sale		524			—			—			—			—			867			1,391
Net income (loss)	$	4,630		$	(4,964	)	$	48		$	(7,775	)	$	(675	)	$	1,169		$	(7,567	)
Company’s equity in earnings (loss) of unconsolidated joint ventures	$	1,320		$	(732	)	$	399		$	(1,514	)	$	(232	)	$	533		$	(226	)

	Year Ended December 31, 2006
	Liberty									Blythe
	Venture I,			Kings Hill			Liberty			Valley JV		Liberty
	LP			Unit Trust			Illinois, LP			Sarl		Washington, LP		Other			Total
Total revenue	$	18,395		$	18,183		$	7,471		$	—	$	—	$	—		$	44,049
Operating expense		5,364			2,181			1,833			—		—		171			9,549
		13,031			16,002			5,638			—		—		(171	)		34,500
Interest		(4,501	)		(13,455	)		(2,527	)		—		—		—			(20,483	)
Depreciation and amortization		(4,544	)		(6,267	)		(2,502	)		—		—		—			(13,313	)
Other income/(expense)		(127	)		(604	)		5			—		—		392			(334	)
Gain on sale		2,644			—			—			—		—		138			2,782
Net income (loss)	$	6,503		$	(4,324	)	$	614		$	—	$	—	$	359		$	3,152
Company’s equity in earnings (loss) of unconsolidated joint ventures	$	1,651		$	(657	)	$	259		$	—	$	—	$	179		$	1,432

	Year Ended December 31, 2005
	Liberty								Blythe
	Venture I,			Kings Hill			Liberty		Valley JV		Liberty
	LP			Unit Trust			Illinois, LP		Sarl		Washington, LP		Other			Total
Total revenue	$	18,592		$	745		$	—	$	—	$	—	$	—		$	19,337
Operating expense		5,859			201			—		—		—		32			6,092
		12,733			544			—		—		—		(32	)		13,245
Interest		(4,569	)		(634	)		—		—		—		—			(5,203	)
Depreciation and amortization		(4,933	)		(386	)		—		—		—		—			(5,319	)
Other income/(expense)		(184	)		(33	)		—		—		—		3,066			2,849
Gain on sale		7,555			—			—		—		—		—			7,555
Net income (loss)	$	10,602		$	(509	)	$	—	$	—	$	—	$	3,034		$	13,127
Company’s equity in earnings (loss) of unconsolidated joint ventures	$	2,650		$	(110	)	$	—	$	—	$	—	$	—		$	2,540

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5. DEFERRED FINANCING AND LEASING COSTS

Deferred financing and leasing costs at December 31, 2007 and 2006 are as follows (in thousands):

	December 31,
	2007			2006
Deferred leasing costs	$	174,573		$	145,292
Deferred financing costs		12,077			8,476
In-place lease value and related intangible asset		77,760			71,496
		264,410			225,264
Accumulated amortization		(119,721	)		(97,362	)
Total	$	144,689		$	127,902

6. INDEBTEDNESS

Indebtedness consists of mortgage loans, unsecured notes, borrowings under the credit facility and the Liberty/Commerz 1701 JFK Boulevard, LP, financing arrangement. The weighted average interest rates for the years ended December 31, 2007, 2006 and 2005, were 6.4%, 6.6% and 6.6%, respectively. Interest costs during the years ended December 31, 2007, 2006 and 2005 in the amount of $45.7 million, $30.8 million and $17.7 million, respectively, were capitalized. Cash paid for interest for the years ended December 31, 2007, 2006 and 2005, was $172.9 million, $150.2 million and $148.8 million, respectively.

During the year ended December 31, 2007, the Company satisfied a $100 million 7.25% senior unsecured note and issued a $300 million 6.625% senior unsecured note due October 1, 2017. The Company used the net proceeds to pay down outstanding borrowings under the Company’s unsecured credit facility and for general corporate purposes. Amounts repaid under the credit facility were subsequently drawn to pay a portion of the cash merger consideration for the purchase of Republic Property Trust.

During the year ended December 31, 2006, the Company satisfied a $100 million 6.95% medium term note and issued a $300 million 5.50% senior unsecured note due December 15, 2016. The Company used the net proceeds to pay down outstanding borrowings under the Company’s unsecured credit facility and for general corporate purposes.

The Company is subject to financial covenants contained in some of the debt agreements, the most restrictive of which are detailed below under the heading “Credit Facility.” As of December 31, 2007 the Company was in compliance with all financial covenants.

Mortgage Loans, Unsecured Notes

Mortgage loans with maturities ranging from 2008 to 2028 are collateralized by and in some instances cross-collateralized by properties with a net book value of $358.2 million.

The interest rates on $2,398.2 million of mortgage loans and unsecured notes are fixed and range from 4.6% to 8.8%. The weighted average remaining term for the mortgage loans and unsecured notes is 5.8 years.

Credit Facility

$600 Million Unsecured Revolving Credit Facility

During the fourth quarter of 2005, the Company obtained a four-year, $600 million unsecured revolving credit facility (the “$600 million Credit Facility”) replacing a $450 million unsecured revolving credit facility due January 16, 2006. Based on the Company’s present ratings, borrowings under the $600 million Credit Facility are priced at LIBOR plus 65 basis points. The $600 million Credit Facility contains a competitive bid option, whereby participating lenders bid on the interest rate to be charged. This feature is available for up to 50% of the amount of the facility. The interest rate on the $470.0 million of borrowings outstanding as of December 31, 2007 was 5.66%. The current ratings for the Company’s senior unsecured debt are Baa2, BBB, and BBB+ from Moody’s, S&P and Fitch, respectively. The $600 million Credit Facility has an accordion feature for an additional $200 million. There is also a 15 basis point annual facility fee on the current borrowing capacity. The $600 million Credit Facility expires on January 16, 2010 and may be extended for a one-year period. The $600 million Credit Facility contains financial covenants, certain of which are set forth below:

• total debt to total assets may not exceed 0.60:1;

• earnings before interest, taxes, depreciation and amortization to fixed charges may not be less than 1.50:1;

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• unsecured debt to unencumbered asset value must equal or be less than 60%; and

• unencumbered net operating income to unsecured interest expense must equal or exceed 200%.

Liberty/Commerz 1701 JFK Boulevard, LP Financing Arrangement

The equity contribution from the Company’s joint venture partner in Liberty/Commerz 1701 JFK Boulevard, LP is treated as a financing arrangement- see Note 4. This equity contribution is entitled to a return equal to the greater of 5% or the current rate on the $600 million Credit Facility.

The scheduled principal amortization and maturities of the Company’s mortgage loans, unsecured notes outstanding, the $600 million Credit Facility and the Liberty/Commerz 1701 JFK Boulevard, LP financing arrangement and the related weighted average interest rates are as follows (in thousands, except percentages):

												Weighted
	Mortgages											Average
	Principal		Principal		Unsecured		Credit					Interest
	Amortization		Maturities		Notes		Facility			Total		Rate
2008	$	8,693	$	34,099	$	—	$	152,960	(1)	$	195,752		5.93	%
2009		6,589		46,313		270,000		—			322,902		7.76	%
2010		5,823		4,736		200,000		470,000			680,559		6.50	%
2011		5,160		10,741		250,000		—			265,901		7.25	%
2012		4,336		32,875		235,000		—			272,211		6.47	%
2013		3,858		4,510		—		—			8,368		5.79	%
2014		3,889		2,684		200,000		—			206,573		5.66	%
2015		3,336		44,469		300,000		—			347,805		5.25	%
2016		2,409		16,880		300,000		—			319,289		5.55	%
2017		1,769		—		300,000		—			301,769		6.62	%
2018 & thereafter		—		—		100,000		—			100,000		7.50	%
	$	45,862	$	197,307	$	2,155,000	$	622,960		$	3,021,129		6.40	%

(1) Liberty/Commerz 1701 JFK Boulevard, LP financing arrangement — see above.

7. LEASING ACTIVITY

Future minimum rental payments due from tenants under noncancelable operating leases as of December 31, 2007 are as follows (in thousands):

2008	$	496,928
2009		452,480
2010		392,691
2011		327,557
2012		265,737
Thereafter		960,489
TOTAL	$	2,895,882

In addition to minimum rental payments, most leases require the tenants to pay for their pro rata share of specified operating expenses. These payments are included as operating expense reimbursement in the accompanying consolidated statements of operations.

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8. SHAREHOLDERS’ EQUITY

Common Shares

The Company paid to holders of its common shares and holders of its common units distributions of $237.1 million, $229.0 million and $221.0 million during the years ended December 31, 2007, 2006, and 2005, respectively. On a per share basis, the Company paid Common Share and Unit distributions of $2.485, $2.465 and $2.445 during the years ended December 31, 2007, 2006, and 2005, respectively.

The following table summarizes the taxability of common share distributions (taxability for 2007 is estimated):

	2007		2006		2005
Ordinary dividend	$	1.6771	$	1.6421	$	1.5352
Qualified dividend		0.0904		—		—
Capital Gain		0.7175		0.8229		0.9098
Return of Capital		—		—		—
Total	$	2.4850	$	2.4650	$	2.4450

The Company’s tax return for the year ended December 31, 2007 has not been filed. The taxability information presented for the 2007 distributions is based upon the best available data. The Company’s prior federal income tax returns are subject to examination by taxing authorities. Because the application of tax laws and regulations is susceptible to varying interpretations, the taxability of distributions could be changed at a later date upon final determination by taxing authorities.

Treasury Shares

The Company’s Board of Trustees authorized a share repurchase plan under which the Company may purchase up to $100 million of the Company’s Common Shares and preferred shares (as defined below).

During the year ended December 31, 2007, the Company purchased 1,190,809 Common Shares for $50.6 million as part of the share repurchase plan.

Minority Interest

Minority interest in the accompanying consolidated financial statements represents the interests of the common and preferred units in Liberty Property Limited Partnership not held by the Trust. Minority interest is adjusted at each period end to reflect the ownership percentage of the common and preferred unitholders at that time. A minority interest reclassification occurs between minority interest and shareholders’ equity each period there is a transaction involving ownership interests in Liberty Property Limited Partnership. In addition, minority interest includes third-party ownership interests in consolidated joint venture investments. During 2006, 684,432 common units were issued in connection with an acquisition. No common units were issued in connection with acquisitions during 2007 or 2005. The common units outstanding as of December 31, 2007 have the same economic characteristics as common shares of the Trust. The 4,189,967 common units share proportionately in the net income or loss and in any distributions of the Operating Partnership and are exchangeable into the same number of common shares of the Trust. The market value of the 4,189,967 common units based on the closing price of the shares of the Company at December 31, 2007 was $120.7 million.

As of December 31, 2007, the Company has 6,273,000 authorized but unissued preferred shares.

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The Company has outstanding the following Cumulative Redeemable Preferred Units of the Operating Partnership, (the “Preferred Units”):

Date of						Liquidation		Dividend			Redeemable
Issue	Issue	Amount		Units		Preference		Rate			As of	Exchangeable after
		(in 000’s)
7/28/99	Series B	$	95,000		3,800	$	25		7.45	%	8/31/09	1/1/14 into Series B Cumulative Redeemable Preferred Shares of the Trust
6/16/05	Series E	$	20,000		400	$	50		7.00	%	6/16/10	6/16/15 into Series E Cumulative Redeemable Preferred Shares of the Trust
6/30/05	Series F	$	44,000		880	$	50		6.65	%	6/30/10	6/30/15 into Series F Cumulative Redeemable Preferred Shares of the Trust
8/23/05	Series F	$	6,000		120	$	50		6.65	%	6/30/10	6/30/15 into Series F Cumulative Redeemable Preferred Shares of the Trust
12/15/06	Series G	$	27,000		540	$	50		6.70	%	12/12/11	12/12/16 into Series G Cumulative Redeemable Preferred Shares of the Trust
8/21/07	Series H	$	100,000		4,000	$	25		7.40	%	8/21/12	8/21/17 into Series H Cumulative Redeemable Preferred Shares of the Trust

During the year ended December 31, 2005, the Company redeemed for $20 million its outstanding 9.125% Series C Cumulative Redeemable Preferred Units. The redemption resulted in a $0.5 million write-off of Series C issuance costs, which was recorded in minority interest expense in the accompanying consolidated financial statements.

During the year ended December 31, 2007, the Company raised $100 million through the placement of 7.40% Series H Cumulative Redeemable Preferred Units.

During the year ended December 31, 2007, the Company redeemed for $23.7 million its outstanding 7.625% Series D Cumulative Redeemable Preferred Units. The redemption resulted in a $0.7 million write off of Series D issuance costs, which was recorded in minority interest expense in the accompanying consolidated financial statements.

The Company paid the following Preferred Unit distributions for the year ended December 31:

	2007		2006		2005
Distributions (in millions)	$	17.1	$	13.7	$	12.1
Distribution per unit:
Series B	$	1.86	$	1.86	$	1.86
Series C		—		—	$	1.05
Series D	$	1.74	$	3.81	$	3.81
Series E	$	3.50	$	3.50	$	1.90
Series F	$	3.33	$	3.33	$	1.61
Series G	$	3.35	$	0.16		—
Series H	$	0.67		—		—

Shareholder Rights Plan

In December 1997, the Board of Trustees of the Company adopted a shareholder rights plan (the “Shareholder Rights Plan”). Under the Shareholder Rights Plan, one Right (as defined in the Shareholder Rights Plan) was attached to each outstanding common share at the close of business on December 31, 1997. In addition, a Right was attached to each share of common stock issued after that date. Each Right entitled the registered holder to purchase from the Company, under certain conditions, a unit (a “Rights Plan Unit”) consisting of one one-thousandth of a share of a Series A Junior Participating Preferred Share, $0.0001 par value, (the “Junior Preferred Stock”), of the Company, for $100 per Rights Plan Unit, subject to adjustment. The Rights became exercisable only if a person or group of affiliated or associated persons (an “Acquiring Person”) acquired, or obtained the right to acquire, beneficial ownership of common shares or other voting securities (“Voting Stock”) that had 10% or more of the voting power of the outstanding shares of Voting Stock, or if an Acquiring Person commenced to make a tender offer or exchange offer to acquire beneficial ownership of Voting Stock that had 10% or more of the voting power of the outstanding shares of Voting Stock. The Rights were redeemable by the Company at a price of $0.0001 per Right. All Rights expired on December 31, 2007.

While the Company did not extend or renew the plan, it is not prohibited from adopting, without shareholder approval, a shareholder rights plan that may discourage any potential acquirer from acquiring more than a specified percentage of our outstanding common shares since, upon this type of acquisition without approval of our board of trustees, all other common shareholders would have the right to purchase a specified amount of common shares at a substantial discount from market price.

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Dividend Reinvestment and Share Purchase Plan

The Company has a Dividend Reinvestment and Share Purchase Plan under which holders of common shares may elect to automatically reinvest their distributions in additional common shares and may make optional cash payments for additional common shares. The Company may issue additional common shares or repurchase common shares in the open market for purposes of financing its obligations under the Dividend Reinvestment and Share Purchase Plan. During the years ended December 31, 2007, 2006, and 2005, 1,366,066, 1,297,867, and 1,767,187, common shares, respectively, were issued through the Dividend Reinvestment and Share Purchase Plan. The Company used the proceeds to pay down outstanding borrowings under the Company’s unsecured credit facility and for general corporate purposes.

9. EMPLOYEE BENEFIT PLANS

The Company maintains a 401(k) plan for the benefit of its full-time employees. The Company matches the employees’ contributions up to 3% of the employees’ salary and may also make annual discretionary contributions. Total 401(k) expense recognized by the Company was $912,000, $940,000 and $716,000 for the years ended 2007, 2006 and 2005, respectively.

10. SHARE BASED COMPENSATION

Options

The Company has authorized the grant of options under the Plan to executive officers, other key employees, non-employee trustees and consultants of up to 12.8 million common shares of the Company. All options granted have 10-year terms and most options vest and are expensed over a 3-year period, with options to purchase up to 20% of the shares exercisable after the first anniversary, up to 50% after the second anniversary and 100% after the third anniversary of the date of grant.

Share based compensation cost related to options for the years ended December 31, 2007, 2006 and 2005 was $904,000, $790,000 and $616,000, respectively.

Because option awards under the Plan vest over three years, the cost related to share-based employee compensation included in the determination of net income for 2005 is less than that which would have been recognized if the fair value based method had been applied to all option awards since the original effective date of SFAS No. 123. The following table illustrates the effect on net income and earnings per share if the fair value based method had been applied to all outstanding and unvested option awards in 2005 (in thousands, except per share amounts).

	Year Ended
	December 31, 2005
Net income	$	249,351
Add: Share-based compensation expense included in reported net income		616
Deduct: Total share-based employee compensation expense determined under fair value based methods for all awards		(746	)
Pro forma net income	$	249,221
Net income per common share:
Basic — as reported	$	2.87
Basic — pro forma	$	2.87
Diluted — as reported	$	2.82
Diluted — pro forma	$	2.82

Pro forma disclosures are not likely to be representative of the effects on reported net income for future years because of the staggered vesting periods of the options.

The fair value of share option awards is estimated on the date of the grant using the Black-Scholes option valuation model. The following weighted-average assumptions were utilized in calculating the fair value of options granted during the periods indicated:

	Year Ended December 31,
	2007			2006			2005
Risk-free interest rate		4.6	%		4.8	%		4.4	%
Dividend yield		5.1	%		5.8	%		5.9	%
Volatility factor		0.183			0.188			0.184
Weighted-average expected life	5 years			7 years			8 years

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A summary of the Company’s share option activity, and related information for the year ended December 31, 2007 follows:

				Weighted
				Average
	Options			Exercise
	(000s)			Price
Outstanding at January 1, 2007		2,557		$	31.83
Granted		207			48.20
Exercised		(319	)		27.31
Forfeited		(29	)		45.76
Outstanding at December 31, 2007		2,416		$	33.67
Exercisable at December 31, 2007		1,984		$	30.93

The weighted average fair value of options granted during the years ended December 31, 2007, 2006 and 2005 was $5.60, $5.06 and $3.86, respectively. Exercise prices for options outstanding as of December 31, 2007 ranged from $21.88 to $49.74. The weighted average remaining contractual life of the options outstanding and exercisable at December 31, 2007 was 4.9 years and 4.1 years, respectively.

During the years ended December 31, 2007, 2006 and 2005, the total intrinsic value of share options exercised (the difference between the market price at exercise and the price paid by the individual to exercise the option) was $7.7 million, $23.5 million and $9.5 million, respectively. As of December 31, 2007, the aggregate intrinsic value of options outstanding was $11.7 million and the aggregate intrinsic value of options exercisable was $4.2 million. The total cash received from the exercise of options for the years ended December 31, 2007, 2006 and 2005 was $8.7 million, $29.4 million and $15.8 million, respectively. The Company has historically issued new shares to satisfy share option exercises.

As of December 31, 2007, there was $2.2 million of unrecognized compensation costs related to nonvested options granted under the Plan. That cost is expected to be recognized over a weighted average period of 1.5 years.

Long Term Incentive Shares (“LTI”)

Restricted LTI share grants made under the Plan are valued at the grant date fair value, which is the market price of the underlying common shares, and vest ratably over a 5-year period beginning with the first anniversary of the grant.

Share-based compensation cost related to restricted LTI share grants for the years ended December 31, 2007, 2006 and 2005 were $3.8 million, $3.0 million and $2.4 million, respectively.

The following table shows a summary of the Company’s restricted LTI share activity for the year ended December 31, 2007:

				Weighted Avg
	Shares			Grant Date
	(000s)			Fair value
Nonvested at January 1, 2007		271		$	42.02
Granted		86			49.53
Vested		(60	)		39.36
Forfeited		(9	)		45.18
Nonvested at December 31, 2007		288		$	44.72

The weighted average fair value of restricted shares granted during the years ended December 31, 2007, 2006 and 2005 was $49.53 per share, $48.08 per share and $41.14 per share. As of December 31, 2007, there was $12.9 million of total unrecognized compensation cost related to nonvested shares granted under the Plan. That cost is expected to be recognized over a weighted average period of 2.0 years. The total fair value of restricted shares vested during the years ended December 31, 2007, 2006 and 2005 was $2.4 million, $1.9 million and $1.6 million, respectively.

Bonus Shares

The Plan provides that employees of the Company may elect to receive bonuses or commissions in the form of common shares in lieu of cash (“Bonus Shares”). By making such election, the employee receives shares equal to 120% of the cash value of the bonus or commission, less applicable withholding tax. Bonus Shares issued for the years ended December 31, 2007, 2006 and 2005 were 64,755, 39,207 and 51,055, respectively. Share-based

59

compensation cost related to Bonus Shares for the years ended December 31, 2007, 2006 and 2005 was $2.9 million, $1.9 million and $2.1 million, respectively.

Profit Sharing Plan

The Plan provides that employees of the Company, below the officer level, may receive up to 5% of base pay in the form of common shares depending on Company performance. Shares issued in conjunction with the profit sharing plan for the years ended December 31, 2007, 2006 and 2005 were 3,457, 3,072 and 3,126 shares, respectively.

An additional 2,738,176, 3,063,169 and 1,935,042 common shares were reserved for issuance for future grants under the Share Incentive Plan at December 31, 2007, 2006, and 2005, respectively.

Employee Share Purchase Plan

The Company registered 750,000 common shares under the Securities Act of 1933, as amended, in connection with an employee share purchase plan (“ESPP”). The ESPP enables eligible employees to purchase shares of the Company, in amounts up to 10% of the employee’s salary, at a 15% discount to fair market value. There were 13,414, 10,491 and 8,814 shares issued, in accordance with the ESPP, during the years ended December 31, 2007, 2006 and 2005, respectively.

11. COMMITMENTS AND CONTINGENCIES

Substantially all of the Properties and land were subject to Phase I Environmental Assessments and when appropriate Phase II Environmental Assessments (collectively, the “Environmental Assessments”) obtained in contemplation of their acquisition by the Company. The Environmental Assessments consisted of, among other activities, a visual inspection of each Property and its neighborhood and a check of pertinent public records. The Environmental Assessments did not reveal, nor is the Company aware of, any non-compliance with environmental laws, environmental liability or other environmental claim that the Company believes would likely have a material adverse effect on the Company.

The Company is obligated to make additional capital contributions to unconsolidated joint ventures of $4.2 million.

The Company has letter of credit obligations of $2.3 million related to development requirements.

The Company maintains cash and cash equivalents at financial institutions. The combined account balances at each institution typically exceed FDIC insurance coverage and, as a result, there is a concentration of credit risk related to amounts on deposit in excess of FDIC insurance coverage. The Company believes the risk is not significant.

Litigation

The Company has been substituted for Republic as a party to certain litigation as a result of the Company’s acquisition of Republic on October 4, 2007. The litigation is summarized below. The litigation arises out of a dispute between Republic and certain parties, two of whom were members of Republic’s Board of Trustees and “founders” of Republic. The dispute includes claims arising from the termination of a development arrangement in West Palm Beach, Florida and an attempt by Republic to acquire a certain office property from an entity controlled by the aforementioned related parties pursuant to an option agreement entered into at the time of Republic’s formation.

On November 17, 2006, Republic disclosed in a Form 8-K that Steven A. Grigg, its President and Chief Development Officer, had notified it that he was terminating his employment, purportedly for “good reason,” as such term is defined in his employment agreement, dated December 20, 2005. Mr. Grigg also asserted that, as a result of such termination, he was entitled to the severance payments provided for under the terms of the employment agreement. The cash portion of such severance payments could be valued at up to approximately $1.8 million. The Company disagrees with Mr. Grigg that there is a basis for termination by Mr. Grigg for good reason; therefore, we believe that Mr. Grigg terminated his employment without good reason as of November 13, 2006, the date of his termination letter. Accordingly, we believe that no severance payments are due and we have not remitted any such payments to Mr. Grigg under the terms of his employment agreement.

On December 22, 2006, Mr. Grigg filed a lawsuit against Republic in the Superior Court of the District of Columbia. Mr. Grigg alleges, among other things, that (i) Republic breached his employment agreement, (ii) Republic breached its duties of good faith and fair dealing and (iii) the Noncompetition Agreement dated December 20, 2005 between Mr. Grigg and Republic is unenforceable and void. Mr. Grigg seeks, among other remedies, (i) the severance payment allegedly due under the employment agreement, (ii) other damages in an amount to be finally determined at trial and (iii) the voiding of the Noncompetition Agreement. The Company believes that Mr. Grigg’s lawsuit is

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without merit, generally denies the allegations in the complaint and denies that Mr. Grigg is entitled to any of the relief sought in his complaint. Republic originally asserted various counterclaims against Mr. Grigg, including claims for common law fraud, state securities fraud, breach of his employment agreement, breach of fiduciary duties and unjust enrichment. Republic subsequently voluntarily dismissed without prejudice its common law fraud, state securities fraud and unjust enrichment claims in order to pursue those claims in the litigation described below pending in the United States District Court for the District of Columbia. The Company’s counterclaims against Mr. Grigg for breach of his employment agreement and breach of his fiduciary duties remain pending in the District of Columbia Superior Court litigation. On March 30, 2007, the Court denied, in its entirety, Mr. Grigg’s motion to dismiss these counterclaims. The Company seeks damages and other appropriate relief on these counterclaims.

On March 6, 2007, Mr. Richard Kramer, Republic’s former Non-executive Chairman of the Board, filed a lawsuit against Republic in the United States District Court for the District of Maryland Southern Division, in which he seeks advancement for legal fees incurred by him purportedly in connection with an independent counsel’s investigation with respect to certain matters involving Republic’s course of dealing in a West Palm Beach development project, as well as those fees incurred in filing and prosecuting this lawsuit. On May 3, 2007, Mr. Kramer voluntarily dismissed this case, and filed an almost identical lawsuit against Republic in the Circuit Court of Baltimore County, Maryland. We believe that Mr. Kramer’s lawsuit is without merit and filed a motion to dismiss or, in the alternative, motion for summary judgment, seeking the dismissal of Mr. Kramer’s lawsuit. Mr. Kramer filed a motion for summary judgment against the Company. On November 2, 2007 the Court denied Mr. Kramer’s motion for summary judgment and granted the Company’s motion to dismiss. Mr. Kramer has appealed the Court’s judgment.

On March 28, 2007, Republic filed a lawsuit against Messrs. Kramer and Grigg and Republic Properties Corporation in the United States District Court of the District of Columbia. This lawsuit asserts, among other things, claims against (i) all three defendants for (a) federal and state securities fraud and (b) common law fraud; (ii) Messrs. Kramer and Grigg for (a) federal and state control person liability and (b) unjust enrichment; and (iii) Republic Properties Corporation for (a) breach of contract and (b) indemnification. The Company seeks, among other remedies, (i) damages in an amount not less than $1.2 million, the approximate value (at the time of issuance) of the partnership units issued by Republic Property Limited Partnership to Republic Properties Corporation in connection with the West Palm Beach City Center Development Contribution Agreement, (ii) additional damages incurred by us as a result of the termination of the West Palm Beach Professional Services Agreement, (iii) recovery of the costs, including attorneys fees, associated with a previously-disclosed independent investigation, (iv) reimbursement for Republic’s expenses in this litigation, including attorneys’ fees, and (v) other damages, including punitive damages, in an amount to be finally determined at trial. On April 27, 2007, Republic filed an Amended Complaint in the District of Columbia District Court action, adding to the claims set forth immediately above a claim for declaratory judgment that Mr. Kramer was not entitled to advancement or reimbursement of any of the fees sought in his Maryland litigation. Republic Property Corporation, Messrs. Kramer and Grigg have filed motions to dismiss this lawsuit, which are currently pending.

On May 21, 2007, Republic proffered a lease (the “Lease”) to 25 Massachusetts Avenue Property LLC (the “Owner”) for certain space in Republic Square I, an office building in Washington, D.C. (the “Option Property”). Two of Republic’s founders and Trustees, Richard L. Kramer and Steven A. Grigg, currently control the Owner and Mark R. Keller, Republic’s former Chief Executive Officer, holds an ownership interest in the Owner. Based on information provided by the Owner, immediately prior to the proffer of the Lease, approximately 50% of the Option Property’s net rentable area was under lease and approximately 37% of the Option Property’s net rentable area was rent paying space. Had the Owner accepted the Lease, more than 85% of the space in the Option Property would have been rent paying space. The base rents and other material terms of the Lease proffer were based on the Owner’s lease up projections for the Property and the Lease was on the Owner’s form lease agreement.

On May 22, 2007, the Owner rejected the proffer of the Lease, asserting, among other things, that it was “not a bona fide business proposal for Republic’s own occupancy and leasing of space”. On May 29, 2007, Republic (i) re-tendered the Lease to the Owner for certain space at the Option Property and (ii) exercised its exclusive option to purchase the fee interest in the Option Property pursuant to the Option Agreement among the Owner, 660 North Capitol Street Property LLC and Republic dated as of November 28, 2005 (the “Option Agreement”). On May 30, 2007, the Owner rejected the Lease and claimed that “there has been no effective exercise of the Option.” The Company believes that the Lease was properly tendered for an appropriate purpose and, accordingly, the Company re-proffered the Lease to the Owner. The Owner rejected the Lease proffer and disputed whether the Lease entitled Republic to purchase the Property, pursuant to its exercise of the option, at the Purchase Price (as defined in the Option Agreement).

In response to the Owner’s rejection, on June 15, 2007, Republic filed a lawsuit against the Owner in the Court of Chancery in the State of Delaware. This lawsuit asserts, among other things, that (i) by refusing to accept Republic’s

61

option exercise the Owner has breached the Option Agreement and (ii) by deciding not to refinance a construction loan on the Property and rejecting the Lease, the Owner has breached the covenant of good faith and fair dealing implied in every contract governed by the laws of the District of Columbia. Republic sought, among other remedies, to obtain (I) an injunction against the Owner’s sale of the Option Property to any party other than Republic, (II) a declaration that the Lease and option exercise are effective and (III) an order that the Owner specifically perform its obligation to sell the Option Property to Republic pursuant to the Option Agreement. Also on June 15, 2007, Republic filed a Notice of Pendency of Action (Lis Pendens) in the Office of the Recorder of Deeds in the District of Columbia, in order to record Republic’s interest in the Option Property as reflected in the Delaware Chancery Court action. On July 2, 2007, the Owner answered the complaint and counterclaimed, seeking monetary damages related to the Owner’s purported attempts to sell the Option Property to a third party. The matter has been tried, the parties have filed post trial briefs and post trial arguments have been held. At this point, the outcome of the lawsuit is uncertain. However, it seems unlikely that the Company will have the opportunity to purchase the Option Property.

While management currently believes that resolving these matters will not have a material adverse impact on our financial position or our results of operations, the litigation noted above is subject to inherent uncertainties and management’s view of these matters may change in the future. Were an unfavorable final outcome to occur, there exists the possibility of a material adverse impact on our financial position and the results of operations for the period in which the effect becomes capable of being reasonably estimated.

Although the Company is engaged in litigation incidental to its business, there is no additional legal proceeding to which it is a party which, in the opinion of management, will materially adversely affect the results of the Company’s operations.

12. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

     A summary of quarterly results of operations for the years ended December 31, 2007 and 2006 follows. Certain amounts have been reclassified to conform to the current presentation of discontinued operations (in thousands, except per share amounts).

	Quarter Ended
	Dec. 31,		Sept. 30,		June 30,		Mar. 31,		Dec. 31,		Sept. 30,		June 30,		Mar. 31,
	2007		2007		2007		2007		2006		2006		2006		2006
Operating revenue	$	188,501	$	176,822	$	168,498	$	164,926	$	163,501	$	154,895	$	151,748	$	148,215
Income from continuing operations		25,326		31,836		33,894		34,799		33,605		31,379		48,127		29,084
Discontinued operations		10,206		5,338		18,533		4,899		27,209		15,506		20,322		61,342
Income available to common Shareholders		35,532		37,174		52,427		39,698		60,814		46,885		68,449		90,426
Income per common share – basic (1)		0.39		0.41		0.57		0.44		0.67		0.52		0.77		1.02
Income per common share – diluted (1)		0.39		0.41		0.57		0.43		0.67		0.52		0.76		1.01

(1) The sum of quarterly financial data may vary from the annual data due to rounding.

13. PRO FORMA INFORMATION

The following unaudited pro forma information was prepared assuming the Republic Acquisition and the Republic Disposition described in Note 4 had occurred on January 1, 2006. The transaction provided the Company with a new platform of quality properties in a dynamic market.

	Year Ended December 31,
	2007		2006
	(in thousands, except per share amounts)
Total revenue	$	712,221	$	678,163
Net income		145,037		246,915
Net income per diluted share		1.58		2.73

This pro forma information is not necessarily indicative of what actual results of operations of the Company would have been, assuming the Company had completed the Republic Acquisition and the Republic Disposition as of

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January 1, 2006, nor do they purport to represent the results of operations of the Company for future periods. There were no material, nonrecurring items included in the reported pro forma results of operations.

14. SEGMENT INFORMATION

The Company operates its portfolio of properties primarily throughout the Mid-Atlantic, Southeastern, Midwestern and Southwestern United States. Additionally, the Company owns certain assets in the United Kingdom. The Company reviews the performance of the portfolio on a geographical basis. As such, the following regions are considered the Company’s reportable segments:

Reportable Segments	Markets
Delaware Valley	Southeastern Pennsylvania; New Jersey
Midwest	Lehigh Valley, Pennsylvania; Minnesota; Milwaukee; Chicago
Mid-Atlantic	Maryland; Piedmont Triad, NC; Greenville, SC; Richmond; Virginia Beach
Florida	Jacksonville; Orlando; Boca Raton; Tampa; Texas
Arizona	Phoenix
Philadelphia	Philadelphia; Northern Virginia/Washington, D.C.
United Kingdom	County of Kent; West Midlands

The Company’s reportable segments are distinct business units which are each managed separately in order to concentrate market knowledge within a geographic area. Within these reportable segments, the Company derives its revenues from its two product types: industrial properties and office properties.

The Company began to report the results of the Arizona and Philadelphia segments during the year ended December 31, 2007. As required by SFAS No. 131 (“SFAS No. 131”) “Disclosures about Segments of an Enterprise and Related Information,” consolidated financial statements issued by the Company in the future will reflect modifications to the Company’s reportable segments resulting from the change described above, including reclassification of all comparative prior period segment information.

The Company evaluates performance of the reportable segments based on property level operating income, which is calculated as rental revenue and operating expense reimbursement less rental property expenses and real estate taxes. The accounting policies of the reportable segments are the same as those for the Company on a consolidated basis.

The operating information by segment is as follows (in thousands):

YEAR ENDED DECEMBER 31, 2007

	Delaware Valley				midwest
	Southeastern				Lehigh										phila-		united
	Pennsylvania		Other		Valley		Other		mid-atlantic		florida		arizona		delphia		kingdom		total
Operating revenue	$	173,633	$	55,388	$	91,630	$	82,419	$	134,903	$	143,064	$	8,166	$	6,829	$	2,715	$	698,747
Rental property expenses and real estate taxes		57,348		18,082		23,615		28,616		41,332		49,042		1,604		1,438		33		221,110
Property level operating income	$	116,285	$	37,306	$	68,015	$	53,803	$	93,571	$	94,022	$	6,562	$	5,391	$	2,682		477,637
Interest and other income																				11,748
Interest expense																				(129,301	)
General and administrative																				(54,116	)
Depreciation and amortization																				(158,355	)
Income before property dispositions, income taxes, minority interest     and equity in (loss) of unconsolidated joint ventures																				147,613
Gain on property dispositions																				1,452
Income taxes																				709
Minority interest																				(23,693	)
Equity in (loss) of unconsolidated joint ventures																				(226	)
Discontinued operations, net of minority interest																				38,976
Net income																			$	164,831

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YEAR ENDED DECEMBER 31, 2006

	Delaware Valley				midwest
	Southeastern				Lehigh										phila-			united
	Pennsylvania		Other		Valley		Other		mid-atlantic		florida		arizona		delphia			kingdom		total
Operating revenue	$	169,297	$	52,644	$	83,849	$	77,420	$	120,168	$	111,551	$	2,263	$	—		$	1,167	$	618,359
Rental property expenses and real estate taxes		54,278		15,882		20,434		27,335		36,439		36,953		57		13			261		191,652
Property level operating income	$	115,019	$	36,762	$	63,415	$	50,085	$	83,729	$	74,598	$	2,206	$	(13	)	$	906		426,707
Interest and other income																					8,714
Interest expense																					(111,514	)
General and administrative																					(46,157	)
Depreciation and amortization																					(134,433	)
Income before property dispositions, income taxes, minority interest     and equity in earnings of unconsolidated joint ventures																					143,317
Gain on property dispositions																					17,628
Income taxes																					(288	)
Minority interest																					(19,894	)
Equity in earnings of unconsolidated joint ventures																					1,432
Discontinued operations, net of minority interest																					124,379
Net income																				$	266,574

YEAR ENDED DECEMBER 31, 2005

	Delaware Valley				midwest
	Southeastern				Lehigh										phila-		united
	Pennsylvania		Other		Valley		Other		mid-atlantic		florida		arizona		delphia		kingdom		total
Operating revenue	$	171,238	$	51,205	$	76,082	$	71,461	$	102,928	$	94,767	$	—	$	166	$	20,329	$	588,176
Rental property expenses and real estate taxes		51,751		16,085		18,741		25,254		30,491		30,994		—		11		3,678		177,005
Property level operating income	$	119,487	$	35,120	$	57,341	$	46,207	$	72,437	$	63,773	$	—	$	155	$	16,651		411,171
Interest and other income																				6,961
Interest expense																				(110,995	)
General and administrative																				(38,113	)
Depreciation and amortization																				(125,703	)
Income before property dispositions, income taxes, minority interest     and equity in earnings of unconsolidated joint ventures																				143,321
Gain on property dispositions																				86,114
Income taxes																				(14,827	)
Minority interest																				(21,519	)
Equity in earnings of unconsolidated joint ventures																				2,540
Discontinued operations, net of minority interest																				53,722
Net income																			$	249,351

	Real Estate Related Revenues
	Year Ended December 31,
Product Type Information	2007		2006		2005
Industrial	$	278,972	$	257,423	$	244,091
Office		419,775		360,936		344,085
Total operating revenue	$	698,747	$	618,359	$	588,176

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ROLLFORWARD OF OPERATING REAL ESTATE ASSETS BY REPORTABLE SEGMENT

	Delaware Valley					Midwest
	Southeastern					Lehigh						Mid-								Phila-		United
	Pennsylvania			Other		Valley			Other			Atlantic			Florida			Arizona		Delphia		Kingdom		Total
January 1, 2007	$	1,048,142		$	215,405	$	582,475		$	702,188		$	888,718		$	922,155		$	31,653	$	—	$	11,435	$	4,402,171
Additions		67,645			94,481		103,750			64,050			114,748			92,323			152,994		360,324		40,097		1,090,412
Dispositions		(12,415	)		—		(9,262	)		(220,190	)		(10,591	)		(8,893	)		—		—		—		(261,351	)
December 31, 2007	$	1,103,372		$	309,886	$	676,963		$	546,048		$	992,875		$	1,005,585		$	184,647	$	360,324	$	51,532		5,231,232
Accumulated depreciation																									(863,609	)
Development in progress																									328,138
Land held for development																									247,124
Other assets																									695,864
Total assets at December 31, 2007																								$	5,638,749

ROLLFORWARD OF OPERATING REAL ESTATE ASSETS BY REPORTABLE SEGMENT

	Delaware Valley						Midwest
	Southeastern						Lehigh						Mid-							Phila-		United
	Pennsylvania			Other			Valley			Other			Atlantic			Florida		Arizona		Delphia		Kingdom		Total
January 1, 2006	$	1,060,198		$	183,020		$	637,301		$	755,799		$	901,213		$	646,681	$	—	$	—	$	9,838	$	4,194,050
Additions		43,199			36,807			15,006			37,853			104,185			275,474		31,653		—		1,597		545,774
Dispositions		(55,255	)		(4,422	)		(69,832	)		(91,464	)		(116,680	)		—		—		—		—		(337,653	)
December 31, 2006	$	1,048,142		$	215,405		$	582,475		$	702,188		$	888,718		$	922,155	$	31,653	$	—	$	11,435		4,402,171
Accumulated depreciation																									(786,778	)
Development in progress																									538,521
Land held for development																									195,332
Assets held for sale																									113,150
Other assets																									448,515
Total assets at December 31, 2006																								$	4,910,911

15. SFAS NO. 144, “ACCOUNTING FOR THE IMPAIRMENT OR DISPOSAL OF LONG-LIVED ASSETS”

Discontinued Operations

In accordance with SFAS No. 144, the operating results and gain/(loss) on disposition of real estate for properties sold and held for sale are reflected in the consolidated statements of operations as discontinued operations. Prior year financial statements have been adjusted for discontinued operations. The proceeds from dispositions of operating properties with no continuing involvement were $369.5 million and $395.9 million for the years ended December 31, 2007 and 2006, respectively.

Below is a summary of the results of operations of the properties disposed of through the respective disposition dates (in thousands):

	Year Ended December 31,
	2007			2006			2005
Revenues	$	31,393		$	74,718		$	106,349
Operating expenses		(12,607	)		(27,141	)		(38,327	)
Interest expense		(4,714	)		(12,732	)		(24,433	)
Depreciation and amortization		(6,932	)		(17,511	)		(24,517	)
Income before property dispositions and minority interest	$	7,140		$	17,334		$	19,072

Interest expense is allocated to discontinued operations as permitted under EITF Issue 87-24, “Allocation of Interest to Discontinued Operations,” and such interest expense has been included in computing income from discontinued operations. The allocation of interest expense to discontinued operations was based on the ratio of net assets sold (without continuing involvement) to the sum of total net assets plus consolidated debt.

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Asset Impairment

In accordance with SFAS No. 144, during the years ended December 31, 2007, 2006 and 2005, the Company recognized impairment losses of $0.2 million, $4.2 million, and $5.3 million, respectively. The 2007 impairment loss of $0.2 million was related to various land parcels. The 2006 impairment loss of $4.2 million was primarily related to a 352,000 square foot portfolio of operating properties in the Midwest segment. The 2005 impairment loss of $5.3 million was primarily related to a portfolio of operating properties equaling 615,000 square feet in the Midwest segment. For the years ended December 31, 2006 and 2005, respectively, $4.2 million and $4.2 million in impairment related to properties sold or held for sale were included in the caption discontinued operations in the Company’s statement of operations. For the years ended December 31, 2007 and 2005, respectively, $0.2 million and $1.1 million in impairments were included in the caption gain on property dispositions as a component of income from continuing operations. The Company determined these impairments through a comparison of the aggregate future cash flows (including quoted offer prices) to be generated by the properties to the carrying value of the properties. The Company has evaluated each of the properties and land held for development and has determined that there are no additional valuation adjustments necessary at December 31, 2007.

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LIBERTY PROPERTY TRUST
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2007

								Costs
								Capitalized										Date of
								Subsequent		Gross Amount Carried at End of Period						Accumulated		Construction		Depreciable
				Initial Cost				to		Land and		Building and		Total		Depreciation		or		life
Project	Location	Encumbrances		Land		Building		Acquisition		Improvements		Improvements		12/31/2007		12/31/07		Acquisition		(years)
OPERATING PROPERTIES
1501 Perryman Road	Aberdeen, MD		—		5,813,324		18,874,059		4,947,893		5,816,839		23,818,436		29,635,275		687,603		2005	40 yrs.
200 Boulder Drive	Allentown, PA		—		4,722,683		18,922,645		237,680		4,722,683		19,160,325		23,883,008		1,591,301		2004	40 yrs.
2196 Avenue C	Allentown, PA		—		101,159		—		1,347,970		107,307		1,341,822		1,449,129		787,442		1980	40 yrs.
2202 Hanger Place	Allentown, PA		*		137,439		—		1,341,155		138,127		1,340,466		1,478,594		857,669		1981	40 yrs.
250 Boulder Drive	Allentown, PA		—		3,599,936		12,099,145		2,105,137		3,719,772		14,084,446		17,804,218		1,127,923		2004	40 yrs.
400 Nestle Way	Allentown, PA		21,818,177		8,065,500		—		27,420,765		8,184,096		27,302,169		35,486,265		8,070,744		1997	40 yrs.
650 Boulder Drive	Allentown, PA		—		5,208,248				31,404,856		9,961,788		26,651,316		36,613,104		3,404,407		2002	40 yrs.
651 Boulder Drive	Allentown, PA		*		4,308,646		—		13,284,432		4,308,646		13,284,432		17,593,078		2,816,045		2000	40 yrs.
6923 Schantz Spring Road	Allentown, PA		*		1,127,805		3,309,132		348,419		1,127,805		3,657,551		4,785,355		956,536		1993	40 yrs.
700 Nestle Way	Allentown, PA		—		3,473,120		—		19,691,854		4,174,970		18,990,004		23,164,974		4,640,376		1998	40 yrs.
705 Boulder Drive	Allentown, PA		—		4,484,096		—		14,878,034		4,486,836		14,875,294		19,362,130		2,768,023		2001	40 yrs.
7165 Ambassador Drive	Allentown, PA		*		792,999		—		4,533,868		804,848		4,522,019		5,326,867		729,476		2002	40 yrs.
7248 Industrial Boulevard	Allentown, PA		—		2,670,849		13,307,408		1,131,982		2,670,673		14,439,565		17,110,239		4,118,325		1988	40 yrs.
7277 Williams Avenue	Allentown, PA		—		462,964		1,449,009		436,448		463,123		1,885,298		2,348,421		600,790		1989	40 yrs.
7339 Industrial Boulevard	Allentown, PA		*		1,187,776		—		6,971,256		1,197,447		6,961,585		8,159,032		2,205,304		1996	40 yrs.
7355 Williams Avenue	Allentown, PA		—		489,749		1,658,091		314,252		489,749		1,972,343		2,462,092		524,131		1998	40 yrs.
7437 Industrial Boulevard	Allentown, PA		—		717,488		5,022,413		3,000,788		726,651		8,014,038		8,740,688		2,719,883		1976	40 yrs.
7562 Penn Drive	Allentown, PA		—		269,614		844,069		213,047		269,614		1,057,116		1,326,730		290,299		1989	40 yrs.
794 Roble Road	Allentown, PA		—		1,147,541		6,088,041		1,125,815		1,147,541		7,213,857		8,361,398		2,041,246		1985	40 yrs.
8014 Industrial Boulevard	Allentown, PA		—		4,019,258		—		9,506,062		3,645,117		9,880,203		13,525,320		2,656,227		1999	40 yrs.
8150 Industrial Boulevard	Allentown, PA		—		2,564,167				8,906,935		2,571,466		8,899,637		11,471,103		1,670,272		2002	40 yrs.
8250 Industrial Boulevard	Allentown, PA		—		1,025,667				5,346,179		1,035,854		5,335,991		6,371,846		791,768		2002	40 yrs.
8400 Industrial Boulevard	Allentown, PA		—		6,725,948		—		27,138,633		7,534,937		26,329,645		33,864,581		635,282		2005	40 yrs.
2041 Avenue C	Allentown, PA		—		213,599		1,095,217		83,135		213,879		1,178,072		1,391,951		383,386		1990	40 yrs.
2201 Hanger Place	Allentown, PA		—		128,454		—		1,906,472		129,142		1,905,783		2,034,926		1,197,287		1987	40 yrs.
3174 Airport Road	Allentown, PA		—		98,986		—		1,160,754		98,986		1,160,754		1,259,740		753,182		1979	40 yrs.
6330 Hedgewood Drive	Allentown, PA		—		531,268		—		4,920,859		532,047		4,920,080		5,452,127		2,485,843		1988	40 yrs.
6350 Hedgewood Drive	Allentown, PA		*		360,027		—		3,470,090		560,691		3,269,426		3,830,117		1,474,174		1989	40 yrs.
6370 Hedgewood Drive	Allentown, PA		—		540,795		—		3,655,876		541,459		3,655,212		4,196,671		1,524,981		1990	40 yrs.
6390 Hedgewood Drive	Allentown, PA		—		707,203		—		2,765,090		707,867		2,764,425		3,472,293		1,380,990		1990	40 yrs.
6520 Stonegate Drive	Allentown, PA		—		453,315		—		1,787,903		484,361		1,756,857		2,241,218		660,871		1996	40 yrs.
6540 Stonegate Drive	Allentown, PA		—		422,042		—		3,893,307		422,730		3,892,620		4,315,349		1,931,365		1988	40 yrs.
6560 Stonegate Drive	Allentown, PA		—		458,281		—		2,833,097		458,945		2,832,433		3,291,378		1,234,645		1989	40 yrs.
6580 Snowdrift Road	Allentown, PA		—		388,328		—		3,326,007		389,081		3,325,255		3,714,335		1,584,533		1988	40 yrs.
7144 Daniels Drive	Allentown, PA		—		2,390,217		2,342,761		3,725,676		1,579,169		6,879,485		8,458,654		2,020,215		1975	40 yrs.
744 Roble Road	Allentown, PA		—		159,771		1,734,229		271,718		161,371		2,004,347		2,165,718		722,635		1986	40 yrs.
754 Roble Road	Allentown, PA		—		162,115		1,731,885		475,768		163,735		2,206,033		2,369,768		773,334		1986	40 yrs.
7620 Cetronia Road	Allentown, PA		—		1,091,806		3,851,456		357,621		1,093,724		4,207,160		5,300,883		1,464,324		1990	40 yrs.
764 Roble Road	Allentown, PA		—		141,069		—		864,405		141,746		863,728		1,005,474		468,515		1985	40 yrs.
944 Marcon Boulevard	Allentown, PA		—		118,521		1,435,479		505,283		119,711		1,939,572		2,059,283		701,331		1986	40 yrs.
954 Marcon Boulevard	Allentown, PA		—		103,665		—		1,112,063		104,453		1,111,276		1,215,728		613,564		1981	40 yrs.
964 Marcon Boulevard	Allentown, PA		—		138,816		—		2,102,031		139,480		2,101,367		2,240,847		1,029,383		1985	40 yrs.
974 Marcon Boulevard	Allentown, PA		—		143,500		—		2,477,417		144,248		2,476,670		2,620,917		1,370,079		1987	40 yrs.
180,190 Cochrane Drive	Annapolis, MD		—		3,670,256		—		22,676,935		3,752,293		22,594,897		26,347,191		9,618,734		1988	40 yrs.
4606 Richlynn Drive	Belcamp, MD		—		299,600		1,818,861		712,787		299,600		2,531,649		2,831,249		534,038		1985	40 yrs.
1455 Valley Center Parkway	Bethlehem, PA		—		670,290		—		3,747,802		545,172		3,872,920		4,418,092		1,826,544		1997	40 yrs.
1525 Valley Center Parkway	Bethlehem, PA		—		475,686		—		7,741,487		804,104		7,413,069		8,217,173		2,125,924		1999	40 yrs.
1605 Valley Center Parkway	Bethlehem, PA		—		729,751				11,067,222		1,766,196		10,030,777		11,796,973		2,192,489		2000	40 yrs.
1640 Valley Center Parkway	Bethlehem, PA		—		359,000		—		4,306,626		190,728		4,474,898		4,665,626		1,258,606		1996	40 yrs.
1650 Valley Center Parkway	Bethlehem, PA		—		359,000		—		2,219,777		188,896		2,389,881		2,578,777		990,820		1997	40 yrs.
1655 Valley Center Parkway	Bethlehem, PA		—		214,431		—		2,042,407		215,095		2,041,743		2,256,838		989,869		1993	40 yrs.
1660 Valley Center Parkway	Bethlehem, PA		—		359,000		—		2,296,163		188,721		2,466,442		2,655,163		808,118		1998	40 yrs.
3400 High Point Boulevard	Bethlehem, PA		—		298,227		—		3,053,506		662,809		2,688,924		3,351,733		449,303		2002	40 yrs.
3500 High Point Boulevard	Bethlehem, PA		—		289,529		—		4,459,422		916,280		3,832,670		4,748,950		108,988		2006	40 yrs.
74 West Broad Street	Bethlehem, PA		—		1,096,127				13,381,415		1,099,079		13,378,463		14,477,542		3,135,259		2002	40 yrs.
83 South Commerce Way	Bethlehem, PA		—		143,661		888,128		524,120		212,744		1,343,165		1,555,909		557,484		1989	40 yrs.
85 South Commerce Way	Bethlehem, PA		—		236,708		987,949		189,712		237,078		1,177,291		1,414,369		343,450		1989	40 yrs.
87 South Commerce Way	Bethlehem, PA		—		253,886		1,062,881		260,292		253,886		1,323,173		1,577,059		417,846		1989	40 yrs.
89 South Commerce Way	Bethlehem, PA		—		320,000		—		2,021,186		367,706		1,973,481		2,341,186		782,215		1998	40 yrs.
1495 Valley Center Parkway	Bethlehem, PA		—		434,640		—		4,921,517		435,303		4,920,854		5,356,157		1,836,182		1990	40 yrs.
1510 Valley Center Parkway	Bethlehem, PA		—		312,209		—		3,760,466		312,873		3,759,802		4,072,675		1,828,761		1988	40 yrs.
1530 Valley Center Parkway	Bethlehem, PA		—		211,747		—		3,008,631		212,492		3,007,886		3,220,378		1,369,757		1988	40 yrs.
1550 Valley Center Parkway	Bethlehem, PA		—		196,954		—		3,909,749		197,700		3,909,003		4,106,703		1,616,561		1988	40 yrs.
1560 Valley Center Parkway	Bethlehem, PA		—		240,069		—		4,633,235		240,732		4,632,572		4,873,304		2,262,361		1988	40 yrs.
1685 Valley Center Parkway	Bethlehem, PA		—		244,029		—		2,283,325		198,482		2,328,872		2,527,354		934,388		1996	40 yrs.
57 South Commerce Way	Bethlehem, PA		—		390,839		2,701,161		779,354		395,459		3,475,895		3,871,354		1,339,138		1986	40 yrs.
10801 Nesbitt Avenue South	Bloomington, MN		—		784,577				4,105,182		786,382		4,103,377		4,889,759		1,091,348		2001	40 yrs.
5705 Old Shakopee Road	Bloomington, MN		—		2,113,223		—		5,184,252		2,148,571		5,148,905		7,297,475		2,619		2001	40 yrs.
5715 Old Shakopee Road West	Bloomington, MN		—		1,263,226		2,360,782		1,978,204		1,264,758		4,337,454		5,602,213		1,150,920		2002	40 yrs.
5735 Old Shakopee Road West	Bloomington, MN		—		1,263,226		2,360,782		1,086,930		1,264,758		3,446,180		4,710,938		557,577		2002	40 yrs.
5775 West Old Shakopee Road	Bloomington, MN		—		2,052,018		3,849,649		3,308,479		2,060,644		7,149,501		9,210,145		2,777,548		2002	40 yrs.
6161 Green Valley Drive	Bloomington, MN		—		740,378		3,311,602		732,919		741,194		4,043,704		4,784,898		848,178		1992	40 yrs.
6601-6625 W. 78th Street	Bloomington, MN		—		2,263,060		—		38,629,236		2,310,246		38,582,050		40,892,296		8,925,168		1998	40 yrs.

67

LIBERTY PROPERTY TRUST
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2007

								Costs
								Capitalized										Date of
								Subsequent		Gross Amount Carried at End of Period						Accumulated		Construction		Depreciable
				Initial Cost				to		Land and		Building and		Total		Depreciation		or		life
Project	Location	Encumbrances		Land		Building		Acquisition		Improvements		Improvements		12/31/2007		12/31/07		Acquisition		(years)
OPERATING PROPERTIES
1701 Clint Moore Boulevard	Boca Raton, FL		—		1,430,884		3,043,553		1,295,979		1,430,937		4,339,480		5,770,416		991,881		1985	40 yrs.
1801 Clint Moore Road	Boca Raton, FL		—		1,065,068		4,481,644		684,192		1,065,068		5,165,837		6,230,905		1,441,672		1986	40 yrs.
777 Yamato Road	Boca Raton, FL		—		4,101,247		16,077,347		5,120,296		4,501,247		20,797,643		25,298,890		5,715,945		1987	40 yrs.
951 Broken Sound Parkway	Boca Raton, FL		—		1,426,251		6,098,952		1,667,358		1,426,251		7,766,310		9,192,561		2,301,086		1986	40 yrs.
400 Boulder Drive	Breinigsville, PA		*		—				13,393,061		2,865,575		10,527,486		13,393,061		892,992		2003	40 yrs.
8201 Industrial Boulevard	Breinigsville, PA		—		2,089,719		—		8,308,557		2,226,432		8,171,844		10,398,276		148,441		2006	40 yrs.
860 Nestle Way	Breinigsville, PA		—		8,118,881		18,885,486		2,210,022		8,118,881		21,095,508		29,214,388		1,262,203		2004	40 yrs.
602 Heron Drive	Bridgeport, NJ		—		524,728		2,240,478		7,650		524,728		2,248,128		2,772,856		547,495		1996	40 yrs.
15800 West Bluemound Road	Brookfield, WI		—		1,289,204		8,128,035		1,696,181		1,306,811		9,806,609		11,113,420		1,711,059		1994	40 yrs.
16620-16650 W Bluemound Road	Brookfield, WI		—		586,665		4,289,907		861,668		586,665		5,151,576		5,738,240		1,182,904		1999	40 yrs.
20700 Swenson Drive	Brookfield, WI		5,953,229		830,008		12,276,445		535,391		830,999		12,810,845		13,641,844		826,905		2005	40 yrs.
20800 Swenson Drive	Brookfield, WI		5,153,464		1,023,466		10,729,219		429,637		1,025,082		11,157,239		12,182,321		874,446		2005	40 yrs.
20825 Swenson Drive	Brookfield, WI		—		644,563		3,640,734		77,808		646,518		3,716,589		4,363,106		244,030		2006	40 yrs.
20935 Swenson Drive	Brookfield, WI		4,571,331		571,389		10,238,547		648,573		572,158		10,886,350		11,458,508		771,812		2005	40 yrs.
20975 Swenson Drive	Brookfield, WI		6,357,511		675,422		8,910,651		926,640		678,637		9,834,076		10,512,713		800,591		2005	40 yrs.
245 Executive Drive	Brookfield, WI		—		577,067		5,197,903		3,967,167		577,067		9,165,070		9,742,137		2,046,418		1984	40 yrs.
1485 W. Commerce Avenue	Carlisle, PA		—		4,249,868		13,886,039		188,648		4,253,027		14,071,528		18,324,555		1,055,694		2004	40 yrs.
3773 Corporate Parkway	Center Valley, PA		—		738,108				7,666,893		794,874		7,610,126		8,405,000		1,855,096		2001	40 yrs.
1309 Executive Boulevard	Cheaspeake, VA		—		926,125				5,086,632		955,374		5,057,383		6,012,757		862,156		2001	40 yrs.
7 Carnegie Plaza	Cherry Hill, NJ		*		2,000,000		3,493,983		3,237,448		2,005,475		6,725,956		8,731,431		878,111		2004	40 yrs.
1301 Executive Boulevard	Chesapeake, VA		—		—		—		5,050,665		997,570		4,053,095		5,050,665		270,460		2005	40 yrs.
1305 Executive Boulevard	Chesapeake, VA		—		861,020				4,891,985		1,129,850		4,623,155		5,753,005		846,963		2002	40 yrs.
1313 Executive Boulevard	Chesapeake, VA		—		1,180,036				4,629,615		1,708,050		4,101,602		5,809,652		665,487		2002	40 yrs.
500 Independence Parkway	Chesapeake, VA		3,490,527		864,150		4,427,285		101,852		866,609		4,526,678		5,393,287		478,978		2004	40 yrs.
501 Independence Parkway	Chesapeake, VA		4,436,051		1,202,556		5,975,538		1,165,292		1,292,273		7,051,113		8,343,386		527,693		2005	40 yrs.
505 Independence Parkway	Chesapeake, VA		5,099,477		1,292,062		6,456,515		1,233,177		1,292,254		7,689,499		8,981,754		631,052		2005	40 yrs.
510 Independence Parkway	Chesapeake, VA		—		2,012,149		7,546,882		392,320		2,014,689		7,936,662		9,951,352		657,791		2005	40 yrs.
700 Independence Parkway	Chesapeake, VA		6,738,723		1,950,375		7,236,994		624,744		1,951,135		7,860,978		9,812,113		928,030		2004	40 yrs.
6230 Old Dobbin Lane	Colombia, MD		—		3,004,075		—		7,645,770		2,746,455		7,903,390		10,649,845		510,321		2004	40 yrs.
5950 Symphony Woods Road	Columbia, MD		—		1,462,762		11,310,187		1,838,307		1,467,623		13,143,634		14,611,256		2,314,163		1986	40 yrs.
6200 Old Dobbin Lane	Columbia, MD		—		958,105				3,736,325		1,295,000		3,399,431		4,694,431		650,345		2002	40 yrs.
6210 Old Dobbin Lane	Columbia, MD		—		958,105				3,923,532		1,307,300		3,574,337		4,881,637		753,776		2002	40 yrs.
6250 Old Dobbin Lane	Columbia, MD		—		958,105				3,681,791		1,295,000		3,344,897		4,639,897		721,932		2002	40 yrs.
6250 Old Dobbin Lane	Columbia, MD		—		958,105				3,791,588		1,599,259		3,150,435		4,749,693		480,916		2000	40 yrs.
7178-80 Columbia Gateway	Columbia, MD		—		1,569,237		4,786,887		2,107,576		1,571,105		6,892,595		8,463,700		2,597,443		1987	40 yrs.
8945-8975 Guilford Road	Columbia, MD		—		2,428,795		7,493,740		1,200,759		2,427,065		8,696,230		11,123,294		2,283,862		1986	40 yrs.
9050 Red Branch Road	Columbia, MD		—		290,950		2,577,153		802,682		290,950		3,379,835		3,670,785		833,392		1972	40 yrs.
9101,9111,9115 Guilford Road	Columbia, MD		—		758,951		—		4,125,174		765,952		4,118,173		4,884,125		2,040,144		1984	40 yrs.
9125,9135,9145 Guilford Road	Columbia, MD		—		900,154		—		6,028,546		920,439		6,008,261		6,928,700		3,622,675		1983	40 yrs.
9755 Patuxent Woods Drive	Columbia, MD		—		3,917,094		16,219,721		1,112,258		3,922,382		17,326,691		21,249,072		710,069		2006	40 yrs.
9770 Patuxent Woods Drive	Columbia, MD		—		341,663		3,033,309		1,320,609		341,663		4,353,918		4,695,581		993,656		1986	40 yrs.
9780 Patuxent Woods Drive	Columbia, MD		—		218,542		1,940,636		411,079		218,542		2,351,715		2,570,256		580,109		1986	40 yrs.
9790 Patuxent Woods Drive	Columbia, MD		—		243,791		2,164,094		257,882		243,791		2,421,976		2,665,767		730,615		1986	40 yrs.
9800 Patuxent Woods Drive	Columbia, MD		—		299,099		2,654,069		531,960		299,099		3,186,029		3,485,129		917,577		1988	40 yrs.
9810 Patuxent Woods Drive	Columbia, MD		—		266,684		2,366,901		791,999		266,684		3,158,900		3,425,584		922,833		1986	40 yrs.
9820 Patuxent Woods Drive	Columbia, MD		—		237,779		2,110,835		789,767		237,779		2,900,602		3,138,381		718,326		1988	40 yrs.
9830 Patuxent Woods Drive	Columbia, MD		—		296,262		2,628,933		254,428		296,262		2,883,361		3,179,624		810,339		1986	40 yrs.
6220 Old Dobbin Lane	Columbis, MD		—		3,865,848		—		7,343,696		3,166,951		8,042,593		11,209,544		53,364		2006	40 yrs.
5150 International Drive	Cudahy, WI		—		739,673		5,108,025		250,327		741,858		5,356,167		6,098,024		587,699		2003	40 yrs.
1250 Hall Court	Deer Park, TX		3,025,882		829,570		4,778,327		47,398		831,611		4,823,685		5,655,296		140,189		2006	40 yrs.
170 Parkway West	Duncan, SC		—		598,348		3,643,756		83,886		598,918		3,727,071		4,325,990		195,036		2006	40 yrs.
190 Parkway West	Duncan, SC		—		551,663		3,463,858		93,187		552,211		3,556,496		4,108,707		210,204		2006	40 yrs.
265 Parkway East	Duncan, SC		—		901,444		5,751,389		18,391		902,374		5,768,850		6,671,224		383,915		2006	40 yrs.
285 Parkway East	Duncan, SC		—		975,433		6,149,465		23,682		976,393		6,172,187		7,148,580		575,543		2006	40 yrs.
3255 Neil Armstrong Boulevard	Eagan, MN		—		1,131,017		—		3,393,423		1,131,017		3,393,423		4,524,441		762,520		1998	40 yrs.
10301-10305 West 70th Street	Eden Prairie, MN		—		120,622		1,085,226		119,591		118,300		1,207,139		1,325,439		332,141		1984	40 yrs.
10321 West 70th Street	Eden Prairie, MN		—		145,198		1,305,700		369,479		142,399		1,677,978		1,820,377		558,826		1984	40 yrs.
10333 West 70th Street	Eden Prairie, MN		—		110,746		995,868		92,008		108,610		1,090,012		1,198,622		315,150		1984	40 yrs.
10349-10357 West 70th Street	Eden Prairie, MN		—		275,903		2,481,666		383,669		270,584		2,870,654		3,141,238		853,964		1985	40 yrs.
10365-10375 West 70th Street	Eden Prairie, MN		—		291,077		2,618,194		289,014		285,464		2,912,821		3,198,284		876,096		1985	40 yrs.
10393-10394 West 70th Street	Eden Prairie, MN		—		269,618		2,423,318		607,121		264,419		3,035,638		3,300,058		882,584		1985	40 yrs.
10400 Viking Drive	Eden Prairie, MN		—		2,912,391		—		22,904,939		2,938,372		22,878,958		25,817,330		6,536,668		1999	40 yrs.
6321-6325 Bury Drive	Eden Prairie, MN		—		462,876		4,151,790		325,250		462,876		4,477,040		4,939,916		1,349,835		1988	40 yrs.
7075 Flying Cloud Drive	Eden Prairie, MN		—		10,232,831		10,855,851		51,817		10,243,977		10,896,522		21,140,499		227,932		2007	40 yrs.
7078 Shady Oak Road	Eden Prairie, MN		—		343,093		3,085,795		1,404,867		336,481		4,497,274		4,833,755		904,873		1985	40 yrs.
7400 Flying Cloud Drive	Eden Prairie, MN		—		195,982		1,762,027		157,281		195,982		1,919,309		2,115,290		490,349		1987	40 yrs.
7615 Smetana Lane	Eden Prairie, MN		—		1,011,517				8,669,553		3,000,555		6,680,516		9,681,071		1,573,069		2001	40 yrs.
7625 Smetana Lane	Eden Prairie, MN		—		4,500,641		—		2,981,957		1,916,609		5,565,990		7,482,599		155,745		2006	40 yrs.
7660-7716 Golden Triangle Drive	Eden Prairie, MN		—		568,706		5,115,177		2,846,759		1,289,215		7,241,427		8,530,642		2,714,856		1988	40 yrs.
7695-7699 Anagram Drive	Eden Prairie, MN		—		760,525		3,254,758		625,146		760,525		3,879,903		4,640,429		1,012,076		1997	40 yrs.
7777 Golden Triangle Drive	Eden Prairie, MN		—		993,101		2,136,862		1,176,757		993,101		3,313,619		4,306,720		673,317		2000	40 yrs.
7800 Equitable Drive	Eden Prairie, MN		—		2,188,525		3,788,762		159,582		2,188,525		3,948,343		6,136,868		1,039,466		1993	40 yrs.
7905 Fuller Road	Eden Prairie, MN		—		1,229,862		4,075,167		1,326,860		1,230,965		5,400,924		6,631,889		1,048,471		1994	40 yrs.

68

LIBERTY PROPERTY TRUST
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2007

								Costs
								Capitalized										Date of
								Subsequent		Gross Amount Carried at End of Period						Accumulated		Construction		Depreciable
				Initial Cost				to		Land and		Building and		Total		Depreciation		or		life
Project	Location	Encumbrances		Land		Building		Acquisition		Improvements		Improvements		12/31/2007		12/31/07		Acquisition		(years)
OPERATING PROPERTIES
8855 Columbine Road	Eden Prairie, MN		—		1,400,925				5,226,016		1,599,757		5,027,185		6,626,941		453,254		2000	40 yrs.
8911 Columbine Road (B2)	Eden Prairie, MN		—		916,687				3,608,469		1,718,407		2,806,748		4,525,156		456,132		2000	40 yrs.
8937 Columbine Road	Eden Prairie, MN		—		1,325,829				4,287,274		1,739,966		3,873,137		5,613,103		774,985		2001	40 yrs.
8967 Columbine Road	Eden Prairie, MN		—		1,450,000		—		3,575,107		1,450,000		3,575,107		5,025,107		818,836		2000	40 yrs.
8995 Columbine Road	Eden Prairie, MN		—		1,087,594				3,664,053		2,055,296		2,696,352		4,751,648		512,478		2001	40 yrs.
9023 Columbine Road	Eden Prairie, MN		—		1,956,273		—		4,873,578		1,956,273		4,873,578		6,829,851		1,204,307		1999	40 yrs.
7351 Coca Cola Drive	Elkridge, MD		—		1,897,044		—		6,890,617		3,023,417		5,764,245		8,787,662		11,375		2006	40 yrs.
180 Sheree Boulevard	Exton, PA		5,267,293		2,647,861		11,334,403		1,508,962		2,649,000		12,842,226		15,491,226		409,970		2007	40 yrs.
7028 Snowdrift Road	Fogelville, PA		—		520,473		959,279		292,813		524,390		1,248,175		1,772,565		333,717		1982	40 yrs.
1100 Virginia Drive	Fort Washington, PA		—		22,612,437		—		55,675,633		23,339,943		54,948,127		78,288,069		156,155		2006	40 yrs.
1100 Virginia Drive	Fort Washington, PA		—		13,007,509		11,480,744		53,906		13,035,013		11,507,146		24,542,159		555,696		2006	40 yrs.
1250 Virginia Drive	Fort Washington, PA		—		1,639,166		1,928,574		457,176		1,650,703		2,374,213		4,024,916		135,775		2005	40 yrs.
275 Commerce Drive	Fort Washington, PA		—		1,775,894		2,160,855		7,005,581		1,790,041		9,152,289		10,942,330		—		2005	40 yrs.
414 Commerce Drive	Fort Washington, PA		—		1,267,194		2,217,460		306,336		1,267,937		2,523,052		3,790,989		138,924		2004	40 yrs.
420 Delaware Drive	Fort Washington, PA		—		2,766,931		—		8,286,637		2,826,994		8,226,574		11,053,569		330,138		2005	40 yrs.
106 Southchase Boulevard	Fountain Inn, SC		—		201,944		—		5,133,389		684,003		4,651,330		5,335,333		242,145		2005	40 yrs.
9601 Cosner Drive	Fredericksburg, VA		—		475,262		3,917,234		214,221		475,262		4,131,454		4,606,716		1,284,229		1995	40 yrs.
200 W Cypress Creek Road	Ft Lauderdale, FL		—		3,414,989		2,399,738		10,533,155		3,414,989		12,932,893		16,347,882		1,096,818		2003	40 yrs.
5410 - 5430 Northwest 33rd Avenue	Ft. Lauderdale, FL		—		603,776		4,176,238		1,098,513		625,111		5,253,416		5,878,527		1,471,554		1985	40 yrs.
6500 NW 12th Avenue	Ft. Lauderdale, FL		—		7,099		3,046,309		482,220		—		3,535,627		3,535,627		1,017,122		1989	40 yrs.
6600 NW 12th Avenue	Ft. Lauderdale, FL		—		7,102		3,047,462		624,497		—		3,679,062		3,679,062		1,024,949		1989	40 yrs.
4121 Cox Road	Glen Allen, VA		—		1,083,006		6,035,653		775,551		1,083,006		6,811,204		7,894,210		676,207		2004	40 yrs.
4198 Cox Road	Glen Allen, VA		—		670,292		3,839,245		988,412		670,292		4,827,657		5,497,949		1,469,466		1984	40 yrs.
4510 Cox Road	Glen Allen, VA		—		1,010,024		7,151,729		1,726,041		1,010,044		8,877,750		9,887,794		2,779,789		1990	40 yrs.
4801 Cox Road	Glen Allen, VA		—		1,072,896		—		10,188,699		1,075,620		10,185,975		11,261,595		2,852,130		1998	40 yrs.
4880 Cox Road	Glen Allen, VA		—		743,898		4,499,807		3,173,720		743,898		7,673,527		8,417,425		1,511,058		1995	40 yrs.
5000 Cox Road	Glen Allen, VA		—		770,214		3,685,248		314,712		771,029		3,999,145		4,770,174		1,188,161		1990	40 yrs.
5500 Cox Road	Glen Allen, VA		—		443,485		—		3,518,766		483,263		3,478,988		3,962,251		973,902		1999	40 yrs.
2 Independence Point	Greenville, SC		—		371,600		—		3,292,933		682,881		2,981,651		3,664,533		134,705		2005	40 yrs.
200 Southchase Boulevard	Greenville, SC		—		512,911				6,273,615		515,542		6,270,984		6,786,525		635,369		2003	40 yrs.
4 Independence Pointe	Greenville, SC		—		—				3,652,819		467,438		3,185,382		3,652,819		706,511		2002	40 yrs.
45 Brookfield Oaks Drive	Greenville, SC		—		818,114		—		3,548,409		825,529		3,540,994		4,366,523		34,402		2006	40 yrs.
5 Independence Pointe	Greenville, SC		—		—				3,459,943		467,438		2,992,506		3,459,943		716,077		2002	40 yrs.
6 Independence Pointe	Greenville, SC		—		—		—		3,061,966		545,698		2,516,268		3,061,966		275,180		2003	40 yrs.
7 Research Drive	Greenville, SC		—		—		17,091,882		—		—		17,091,882		17,091,882		266,608		2007	40 yrs.
One Independence Pointe	Greenville, SC		—		780,881		6,199,230		6,509,229		784,617		12,704,723		13,489,340		2,689,700		1982	40 yrs.
1 Enterprise Parkway	Hampton, VA		—		974,675		5,579,869		1,222,782		974,675		6,802,651		7,777,326		1,986,470		1987	40 yrs.
1317 Executive Boulevard	Hampton, VA		—		1,650,423		—		6,423,235		1,128,829		6,944,829		8,073,658		64,319		2006	40 yrs.
21 Enterprise Parkway	Hampton, VA		445,218		263,668		8,167,118		314,618		265,719		8,479,685		8,745,404		1,675,348		1999	40 yrs.
22 Enterprise Parkway	Hampton, VA		—		1,097,368		6,760,778		1,021,564		1,097,368		7,782,342		8,879,710		2,270,977		1990	40 yrs.
5 Manhattan Square	Hampton, VA		—		207,368		—		1,749,035		212,694		1,743,708		1,956,403		486,652		1999	40 yrs.
521 Butler Farm Road	Hampton, VA		—		750,769		2,911,149		257,271		710,486		3,208,702		3,919,188		363,789		2003	40 yrs.
7317 Parkway Drive	Hanover, MD		—		1,104,359		1,959,671		79,319		1,104,359		2,038,990		3,143,349		521,582		1983	40 yrs.
500 McCarthy Drive	Harrisburg, PA		—		5,194,872		19,991,436		4,234,765		5,687,013		23,734,060		29,421,073		2,098,987		2005	40 yrs.
600 Industrial Drive	Harrisburg, PA		—		7,743,800		—		28,300,323		9,368,557		26,675,566		36,044,122		567,610		2005	40 yrs.
4050 Piedmont Parkway	High Point , NC		—		801,902		—		20,004,504		2,042,159		18,764,248		20,806,406		4,527,418		1998	40 yrs.
4170 Mendenhall Oaks Parkway	High Point , NC		—		143,699		—		2,210,943		373,502		1,981,140		2,354,642		599,491		1999	40 yrs.
4180 Mendenhall Oaks Parkway	High Point , NC		—		121,329		—		1,835,505		315,614		1,641,220		1,956,834		548,282		1999	40 yrs.
1400 Mendenhall Oaks Parkway	High Point, NC		—		172,320				7,112,571		984,672		6,300,219		7,284,891		1,246,828		2002	40 yrs.
1498 Eagle Hill Drive	High Point, NC		—		94,274		—		5,702,221		791,880		5,004,614		5,796,494		79,836		2005	40 yrs.
2427 Penny Road	High Point, NC		—		1,165,664		—		3,467,001		655,240		3,977,424		4,632,665		1,692,315		1990	40 yrs.
400 Mendenhall Oaks Parkway	High Point, NC		—		—		—		1,860,199		665,239		1,194,960		1,860,199		47,894		2004	40 yrs.
4000 Piedmont Parkway	High Point, NC		—		592,885		4,825,615		906,054		597,368		5,727,186		6,324,555		1,922,944		1989	40 yrs.
4015 Meeting Way	High Point, NC		—		510,000		—		2,787,760		511,869		2,785,890		3,297,759		219,904		2003	40 yrs.
4020 Meeting Way	High Point, NC		—		94,232				1,682,549		378,101		1,398,680		1,776,781		345,896		2001	40 yrs.
4135 Mendenall Oaks Parkway	High Point, NC		—		499,500		—		3,498,774		500,980		3,497,293		3,998,274		694,206		2000	40 yrs.
4160 Mendenhall Oaks Parkway	High Point, NC		—		285,882		—		3,332,553		545,627		3,072,808		3,618,435		862,011		1998	40 yrs.
4183 Eagle Hill Drive	High Point, NC		—		122,203				3,881,793		526,266		3,477,730		4,003,996		1,273,230		2001	40 yrs.
4189 Eagle Hill Drive	High Point, NC		—		100,106				3,430,006		431,106		3,099,006		3,530,112		810,388		2001	40 yrs.
4191 Mendenhall Oaks Parkway	High Point, NC		—		217,943				3,114,774		611,166		2,721,550		3,332,716		514,048		2002	40 yrs.
4194 Mendenhall Oaks Parkway	High Point, NC		—		102,372		—		2,597,683		265,991		2,434,064		2,700,055		738,898		1999	40 yrs.
4195 Eagle Hill Drive	High Point, NC		—		107,586		—		3,349,592		505,700		2,951,478		3,457,178		211,243		2004	40 yrs.
4196 Mendenhall Oaks Parkway	High Point, NC		—		66,731		—		2,253,083		173,889		2,145,925		2,319,814		776,035		1999	40 yrs.
4300 Federal Drive	High Point, NC		—		264,038		—		2,090,460		276,038		2,078,460		2,354,498		419,899		1998	40 yrs.
4328, 4336 Federal Drive	High Point, NC		4,272,471		521,122		—		7,238,387		825,092		6,934,416		7,759,509		3,611,506		1995	40 yrs.
4344 Federal Drive	High Point, NC		—		484,001		—		2,780,946		173,623		3,091,325		3,264,948		1,128,727		1996	40 yrs.
4380 Federal Drive	High Point, NC		—		282,996		—		2,204,882		283,368		2,204,510		2,487,878		794,430		1997	40 yrs.
4388 Federal Drive	High Point, NC		—		143,661		—		1,210,692		132,655		1,221,699		1,354,353		464,620		1997	40 yrs.
4500 Green Point Drive	High Point, NC		—		230,622		—		2,308,319		231,692		2,307,249		2,538,941		1,153,111		1989	40 yrs.
4501 Green Point Drive	High Point, NC		—		319,289		—		2,607,625		320,450		2,606,465		2,926,914		1,232,211		1989	40 yrs.
4523 Green Point Drive	High Point, NC		—		234,564		—		2,704,781		235,698		2,703,647		2,939,345		1,133,110		1988	40 yrs.
4524 Green Point Drive	High Point, NC		—		182,810		—		2,361,828		183,888		2,360,749		2,544,638		1,117,064		1989	40 yrs.
1 Walnut Grove Drive	Horsham, PA		—		1,058,901		5,343,606		1,041,557		1,058,901		6,385,163		7,444,064		2,202,363		1986	40 yrs.

69

LIBERTY PROPERTY TRUST
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2007

								Costs
								Capitalized										Date of
								Subsequent		Gross Amount Carried at End of Period						Accumulated		Construction		Depreciable
				Initial Cost				to		Land and		Building and		Total		Depreciation		or		life
Project	Location	Encumbrances		Land		Building		Acquisition		Improvements		Improvements		12/31/2007		12/31/07		Acquisition		(years)
OPERATING PROPERTIES
100 Gibraltar Road	Horsham, PA		—		38,729		349,811		9,589		38,729		359,400		398,129		90,395		1975	40 yrs.
100 Witmer Road	Horsham, PA		5,168,589		3,102,784		—		12,134,349		3,764,784		11,472,350		15,237,133		3,164,372		1996	40 yrs.
100-107 Lakeside Drive	Horsham, PA		—		239,528		2,163,498		673,861		255,528		2,821,359		3,076,887		910,465		1982	40 yrs.
101 Gibraltar Road	Horsham, PA		—		651,990		5,888,989		1,445,256		732,552		7,253,683		7,986,235		2,020,530		1977	40 yrs.
101-111 Rock Road	Horsham, PA		—		350,561		3,166,389		640,212		452,251		3,704,911		4,157,162		1,060,904		1975	40 yrs.
102 Rock Road	Horsham, PA		—		1,110,209		2,301,302		1,133,191		1,114,985		3,429,717		4,544,702		568,678		1985	40 yrs.
103-109 Gibraltar Road	Horsham, PA		—		270,906		2,448,500		803,059		270,906		3,251,558		3,522,465		1,158,159		1978	40 yrs.
104 Rock Road	Horsham, PA		—		330,111		2,981,669		209,604		330,111		3,191,273		3,521,384		824,709		1974	40 yrs.
104 Witmer Road	Horsham, PA		*		1,248,148		—		1,137,753		189,793		2,196,108		2,385,901		833,657		1975	40 yrs.
110 Gibraltar Road	Horsham, PA		—		673,041		5,776,369		2,364,036		673,041		8,140,405		8,813,446		2,228,932		1979	40 yrs.
111-159 Gibraltar Road	Horsham, PA		—		489,032		4,126,151		1,171,671		489,032		5,297,822		5,786,854		1,463,329		1981	40 yrs.
113-123 Rock Road	Horsham, PA		—		351,072		3,171,001		592,177		451,731		3,662,519		4,114,250		914,341		1975	40 yrs.
120 Gibraltar Road	Horsham, PA		—		533,142		4,830,515		2,210,194		558,142		7,015,709		7,573,851		1,605,641		1980	40 yrs.
123-135 Rock Road	Horsham, PA		—		292,360		2,411,677		880,183		393,019		3,191,201		3,584,220		1,042,075		1975	40 yrs.
132 Welsh Road	Horsham, PA		—		1,333,642		—		4,406,888		1,408,041		4,332,488		5,740,529		1,467,255		1998	40 yrs.
161-175 Gibraltar Road	Horsham, PA		—		294,673		2,663,722		987,299		294,673		3,651,020		3,945,694		981,289		1976	40 yrs.
181-187 Gibraltar Road	Horsham, PA		—		360,549		3,259,984		787,154		360,549		4,047,138		4,407,687		1,224,290		1982	40 yrs.
2 Walnut Grove Drive	Horsham, PA		—		1,281,870		7,767,374		1,829,877		1,265,363		9,613,758		10,879,121		3,078,839		1989	40 yrs.
200 Gibraltar Road	Horsham, PA		—		638,513		5,811,323		1,894,468		638,513		7,705,790		8,344,304		2,488,569		1990	40 yrs.
200-264 Lakeside Drive	Horsham, PA		—		502,705		4,540,597		928,316		502,705		5,468,913		5,971,618		1,647,169		1982	40 yrs.
201 Gibraltar Road	Horsham, PA		—		380,127		3,433,433		1,997,494		380,802		5,430,252		5,811,054		1,456,222		1983	40 yrs.
210-223 Witmer Road	Horsham, PA		—		270,282		2,441,276		1,929,282		270,282		4,370,558		4,640,840		1,111,988		1972	40 yrs.
220 Gibraltar Road	Horsham, PA		—		629,944		5,733,228		1,307,530		629,944		7,040,758		7,670,702		2,440,862		1990	40 yrs.
231-237 Gibraltar Road	Horsham, PA		*		436,952		3,948,963		736,123		436,952		4,685,086		5,122,038		1,336,135		1981	40 yrs.
240 Gibraltar Road	Horsham, PA		—		629,944		5,733,234		1,757,008		629,944		7,490,243		8,120,186		2,648,515		1990	40 yrs.
255 Business Center Drive	Horsham, PA		—		1,154,289		2,007,214		541,080		1,140,597		2,561,985		3,702,582		296,851		2003	40 yrs.
261-283 Gibraltar Road	Horsham, PA		*		464,871		3,951,972		829,558		464,871		4,781,530		5,246,401		1,049,039		1978	40 yrs.
300 Welsh Road	Horsham, PA		—		696,061		3,339,991		570,429		696,061		3,910,420		4,606,480		990,440		1985	40 yrs.
300 Welsh Road — Building 3	Horsham, PA		—		180,459		1,441,473		375,923		180,459		1,817,396		1,997,855		618,169		1983	40 yrs.
300 Welsh Road — Building 4	Horsham, PA		—		282,493		2,256,508		1,418,790		282,493		3,675,298		3,957,791		1,225,002		1983	40 yrs.
300-309 Lakeside Drive	Horsham, PA		—		369,475		3,338,761		1,841,434		376,475		5,173,195		5,549,670		1,820,269		1982	40 yrs.
335 Commerce Drive	Horsham, PA		—		—		—		8,754,421		182,400		8,572,022		8,754,421		767,210		2002	40 yrs.
355 Business Center Drive	Horsham, PA		—		483,045		898,798		252,036		471,171		1,162,708		1,633,879		186,417		2003	40 yrs.
4 Walnut Grove	Horsham, PA		*		2,515,115		—		7,379,933		2,515,115		7,379,933		9,895,049		1,589,204		1999	40 yrs.
400-445 Lakeside Drive	Horsham, PA		—		543,628		4,910,226		2,760,384		583,628		7,630,610		8,214,238		2,267,628		1981	40 yrs.
455 Business Center Drive	Horsham, PA		—		1,351,011		2,503,449		1,892,811		1,322,317		4,424,954		5,747,271		783,460		2003	40 yrs.
5 Walnut Grove Drive	Horsham, PA		—		1,065,951		—		9,910,030		1,939,712		9,036,269		10,975,981		1,994,511		2000	40 yrs.
506 Prudential Road	Horsham, PA		—		208,140		895,470		652,633		208,140		1,548,102		1,756,243		397,359		1973	40 yrs.
555 Business Center Drive	Horsham, PA		—		727,420		1,353,650		181,096		709,967		1,552,200		2,262,167		297,092		2003	40 yrs.
680 Blair Mill Road	Horsham, PA		—		3,527,151				12,160,383		4,138,577		11,548,957		15,687,534		2,839,043		2001	40 yrs.
7 Walnut Grove Drive	Horsham, PA		—		2,631,696		—		18,304,278		2,631,956		18,304,018		20,935,974		145,951		2006	40 yrs.
700 Dresher Road	Horsham, PA		—		2,551,777		3,020,638		4,668,770		2,565,140		7,676,045		10,241,185		3,469,256		1987	40 yrs.
719 Dresher Road	Horsham, PA		*		493,426		2,812,067		251,335		495,112		3,061,716		3,556,828		755,442		1987	40 yrs.
507 Prudential Road	Horsham, PA		—		644,900		5,804,100		8,818,780		1,131,380		14,136,400		15,267,780		4,162,995		1988	40 yrs.
747 Dresher Road	Horsham, PA		—		1,607,238		—		5,139,699		1,607,977		5,138,960		6,746,937		2,428,966		1988	40 yrs.
767 Electronic Drive	Horsham, PA		*		1,229,685		—		3,442,013		1,241,970		3,429,728		4,671,697		1,593,901		1996	40 yrs.
10735 West Little York Road	Houston, TX		—		1,110,988		6,351,946		1,676,410		1,135,483		8,003,861		9,139,344		934,064		2000	40 yrs.
10739 West Little York Road	Houston, TX		—		797,931		5,950,894		242,625		799,560		6,191,890		6,991,450		960,100		1999	40 yrs.
11201 Greens Crossing Boulevard	Houston, TX		—		1,006,194		5,412,584		770,438		1,008,542		6,180,674		7,189,215		—		2007	40 yrs.
16405 Air Center Boulevard	Houston, TX		—		438,853		3,030,396		430,422		438,853		3,460,818		3,899,671		944,891		1997	40 yrs.
16445 Air Center Boulevard	Houston, TX		—		363,339		2,509,186		618,845		363,339		3,128,031		3,491,370		1,073,194		1997	40 yrs.
1646 Rankin Road	Houston, TX		—		329,961		—		4,895,914		592,234		4,633,640		5,225,874		182,817		2005	40 yrs.
16580 Air Center Boulevard	Houston, TX		—		289,000		3,559,857		269,417		289,000		3,829,274		4,118,275		952,367		1997	40 yrs.
16602 Central Green Boulevard	Houston, TX		—		284,403		—		4,496,262		503,779		4,276,886		4,780,665		252,986		2005	40 yrs.
16605 Air Center Boulevard	Houston, TX		—		298,999				3,770,315		496,186		3,573,128		4,069,314		915,831		2002	40 yrs.
16685 Air Center Boulevard	Houston, TX		—		—		—		2,935,268		414,691		2,520,577		2,935,268		261,429		2004	40 yrs.
1755 Trans Central Drive	Houston, TX		—		293,534		3,036,269		190,651		306,147		3,214,306		3,520,453		668,580		1999	40 yrs.
5200 N. Sam Houston Parkway	Houston, TX		—		1,519,458		7,135,548		1,170,936		1,520,074		8,305,868		9,825,942		—		2007	40 yrs.
5250 N. Sam Houston Parkway	Houston, TX		—		2,173,287		8,868,256		1,116,010		2,173,942		9,983,611		12,157,553		—		2007	40 yrs.
850 Greens Parkway	Houston, TX		—		2,893,405		11,593,197		1,708,393		2,899,861		13,295,133		16,194,994		—		2007	40 yrs.
860 Greens Parkway	Houston, TX		—		1,399,365		6,344,650		997,635		1,374,012		7,367,639		8,741,650		—		2007	40 yrs.
8801-19 & 8821-49 Fallbrook Drive	Houston, TX		—		2,290,001		15,297,141		1,590,836		2,290,002		16,887,976		19,177,978		2,022,295		2000	40 yrs.
8802-8824 Fallbrook Drive	Houston, TX		—		1,114,406		6,364,767		663,613		1,114,433		7,028,353		8,142,786		840,089		2004	40 yrs.
8825-8839 N Sam Houston Pkwy	Houston, TX		—		638,453		3,258,815		565,274		638,477		3,824,064		4,462,542		362,142		2004	40 yrs.
8850-8872 Fallbrook Drive	Houston, TX		—		504,317		2,878,351		1,014,679		504,341		3,893,006		4,397,347		395,260		2004	40 yrs.
10 North Park Drive	Hunt Valley, MD		—		2,211,969		7,816,042		234,730		2,211,969		8,050,771		10,262,741		847,619		2003	40 yrs.
20 Wright Avenue	Hunt Valley, MD		—		1,205,946		—		9,631,918		1,861,025		8,976,839		10,837,864		1,708,149		2001	40 yrs.
307 International Circle	Hunt Valley, MD		—		3,538,319		14,190,832		12,949,813		3,542,881		27,136,083		30,678,964		1,680,609		2004	40 yrs.
309 International Circle	Hunt Valley, MD		—		613,667		2,458,204		651,283		615,096		3,108,057		3,723,154		210,540		2004	40 yrs.
311 International Circle	Hunt Valley, MD		—		313,365		1,281,093		76,922		314,572		1,356,808		1,671,381		71,468		2004	40 yrs.
4 North Park Drive	Hunt Valley, MD		—		3,269,948		13,551,370		545,606		3,269,948		14,096,976		17,366,924		1,773,089		2003	40 yrs.
6 North Park Drive	Hunt Valley, MD		—		2,077,949		8,770,566		981,110		2,077,949		9,751,676		11,829,625		1,325,458		2003	40 yrs.
10245 Centurion Parkway North	Jacksonville, FL		—		852,644		3,510,889		967,927		853,704		4,477,755		5,331,460		1,152,505		1996	40 yrs.

70

LIBERTY PROPERTY TRUST
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2007

								Costs
								Capitalized											Date of
								Subsequent			Gross Amount Carried at End of Period						Accumulated		Construction		Depreciable
				Initial Cost				to			Land and		Building and		Total		Depreciation		or		life
Project	Location	Encumbrances		Land		Building		Acquisition			Improvements		Improvements		12/31/2007		12/31/07		Acquisition		(years)
OPERATING PROPERTIES
11777 Central Highway	Jacksonville, FL		—		92,207		429,997		1,275,050			140,426		1,656,828		1,797,254		1,088,524		1985	40 yrs.
4190 Belfort Road	Jacksonville, FL		—		821,000		5,866,000		3,319,759			827,420		9,179,339		10,006,759		4,235,466		1986	40 yrs.
4345 Southpoint Parkway	Jacksonville, FL		—		—		—		8,791,159			418,093		8,373,065		8,791,159		2,559,557		1998	40 yrs.
4801 Executive Park Court - 100	Jacksonville, FL		—		554,993		2,993,277		1,321,576			554,542		4,315,303		4,869,846		1,507,461		1990	40 yrs.
4801 Executive Park Court - 200	Jacksonville, FL		—		370,017		1,995,518		367,780			370,039		2,363,276		2,733,315		678,769		1990	40 yrs.
4810 Executive Park Court	Jacksonville, FL		—		369,694		3,045,639		937,609			370,039		3,982,903		4,352,942		1,059,805		1990	40 yrs.
4815 Executive Park Court - 100	Jacksonville, FL		—		366,317		1,975,393		409,677			366,339		2,385,048		2,751,387		793,562		1995	40 yrs.
4815 Executive Park Court - 200	Jacksonville, FL		—		462,522		2,494,397		457,548			462,549		2,951,918		3,414,467		965,374		1995	40 yrs.
4820 Executive Park Court	Jacksonville, FL		—		555,173		2,693,130		777,348			555,213		3,470,439		4,025,651		1,007,193		1997	40 yrs.
4825 Executive Park Court	Jacksonville, FL		—		601,278		3,242,491		282,810			601,401		3,525,178		4,126,579		1,076,657		1996	40 yrs.
4887 Belfort Road	Jacksonville, FL		—		1,299,202				7,916,788			1,665,915		7,550,074		9,215,989		1,728,371		2002	40 yrs.
4899 Belfort Road	Jacksonville, FL		—		1,299,201		—		8,325,889			1,207,751		8,417,339		9,625,090		2,064,295		2000	40 yrs.
4901 Belfort Road	Jacksonville, FL		—		877,964		2,360,742		2,899,717			877,964		5,260,459		6,138,423		1,886,142		1986	40 yrs.
4905 Belfort Street	Jacksonville, FL		—		638,154		—		3,465,151			641,272		3,462,033		4,103,305		992,077		2000	40 yrs.
5201 Gate Parkway	Jacksonville, FL		—		3,836,532		—		21,414,727			4,269,346		20,981,913		25,251,260		1,229,452		2005	40 yrs.
6600 Southpoint Parkway	Jacksonville, FL		—		998,432		4,055,727		828,152			1,002,704		4,879,607		5,882,311		1,599,460		1986	40 yrs.
6601 Executive Park Circle North	Jacksonville, FL		—		551,250		3,128,361		106,408			551,250		3,234,768		3,786,018		782,910		1992	40 yrs.
6602 Executive Park Court - 100	Jacksonville, FL		—		388,519		2,095,293		299,475			388,541		2,394,745		2,783,287		707,625		1993	40 yrs.
6602 Executive Park Court - 200	Jacksonville, FL		—		296,014		1,596,347		437,796			296,032		2,034,126		2,330,157		583,710		1993	40 yrs.
6620 Southpoint Drive	Jacksonville, FL		—		614,602		4,267,477		1,001,006			614,602		5,268,482		5,883,085		1,698,587		1984	40 yrs.
6631 Executive Park Court - 100	Jacksonville, FL		—		251,613		1,356,849		482,785			251,627		1,839,620		2,091,247		711,295		1994	40 yrs.
6631 Executive Park Court - 200	Jacksonville, FL		—		406,561		2,195,070		272,425			407,043		2,467,013		2,874,056		748,398		1994	40 yrs.
6700 Southpoint Parkway	Jacksonville, FL		—		620,719		2,989,746		750,311			624,215		3,736,561		4,360,776		1,443,345		1987	40 yrs.
7014 AC Skinner Parkway	Jacksonville, FL		—		574,198		—		3,568,668			780,486		3,362,380		4,142,866		1,268,559		1999	40 yrs.
7016 AC Skinner Parkway	Jacksonville, FL		—		597,181		—		2,373,250			602,633		2,367,799		2,970,431		1,091,943		1996	40 yrs.
7018 AC Skinner Parkway	Jacksonville, FL		—		840,996		—		4,669,430			846,461		4,663,965		5,510,426		2,049,068		1997	40 yrs.
7020 AC Skinner Parkway	Jacksonville, FL		—		398,257		—		2,775,001			749,811		2,423,448		3,173,258		1,099,538		1996	40 yrs.
7022 AC Skinner Parkway	Jacksonville, FL		—		706,934		—		3,572,340			853,981		3,425,294		4,279,274		1,416,112		1996	40 yrs.
7077 Bonneval Road	Jacksonville, FL		—		768,000		5,789,000		3,434,464			774,020		9,217,444		9,991,464		3,743,688		1988	40 yrs.
7251 Salisbury Road	Jacksonville, FL		—		—		—		3,567,820			662,559		2,905,261		3,567,820		819,896		2000	40 yrs.
7255 Salisbury Road	Jacksonville, FL		—		392,060				2,975,677			680,766		2,686,971		3,367,737		595,294		2002	40 yrs.
7970 Bayberry Road	Jacksonville, FL		—		127,520		—		1,366,849			129,979		1,364,391		1,494,369		1,061,963		1978	40 yrs.
7980 Bayberry Road	Jacksonville, FL		—		330,726		1,338,101		17,776			330,726		1,355,877		1,686,603		366,188		1978	40 yrs.
8665,8667,8669 Baypine Road	Jacksonville, FL		—		966,552		—		5,882,947			974,959		5,874,540		6,849,499		2,827,413		1987	40 yrs.
8775 Baypine Road	Jacksonville, FL		—		906,804		—		9,967,357			913,013		9,961,148		10,874,161		1,807,389		1989	40 yrs.
151 South Warner Road	King of Prussia, PA		—		1,218,086		6,937,866		280,315			1,186,972		7,249,295		8,436,267		2,047,040		1980	40 yrs.
2100 Renaissance Boulevard	King of Prussia, PA		—		1,110,111		—		9,339,057			1,132,519		9,316,649		10,449,169		2,815,873		1999	40 yrs.
2201 Renaissance Boulevard	King of Prussia, PA		—		—		—		15,578,624			2,413,514		13,165,110		15,578,624		3,555,287		2000	40 yrs.
2300 Renaissance Boulevard	King of Prussia, PA		—		509,580		—		3,042,297			574,152		2,977,725		3,551,877		861,386		1999	40 yrs.
2301 Renaissance Boulevard	King of Prussia, PA		—		1,645,246		—		30,063,879			4,581,649		27,127,475		31,709,124		5,061,184		2002	40 yrs.
2500 Renaissance Boulevard	King of Prussia, PA		—		509,580		—		2,877,654			592,886		2,794,347		3,387,234		1,017,641		1999	40 yrs.
2520 Renaissance Boulevard	King of Prussia, PA		—		1,020,000		—		5,005,045			978,402		5,046,643		6,025,045		2,011,014		1999	40 yrs.
2540 Renaissance Boulevard	King of Prussia, PA		—		—		—		1,625,497			274,341		1,351,156		1,625,497		397,414		2000	40 yrs.
2560 Renaissance Boulevard	King of Prussia, PA		—		—		—		3,729,254			649,792		3,079,462		3,729,254		870,817		2000	40 yrs.
2700 Horizon Drive	King of Prussia, PA		—		764,370		—		3,682,628			867,815		3,579,183		4,446,998		1,262,969		1998	40 yrs.
2900 Horizon Drive	King of Prussia, PA		—		679,440		—		3,503,074			774,096		3,408,418		4,182,514		1,003,808		1998	40 yrs.
3200 Horizon Drive	King of Prussia, PA		—		928,637		—		7,045,235			1,210,137		6,763,734		7,973,871		2,642,202		1996	40 yrs.
3400 Horizon Drive	King of Prussia, PA		—		776,496		3,139,068		1,277,980			776,496		4,417,048		5,193,544		1,210,636		1995	40 yrs.
3600 Horizon Drive	King of Prussia, PA		—		236,432		1,856,252		735,267			236,432		2,591,519		2,827,950		621,673		1989	40 yrs.
3602 Horizon Drive	King of Prussia, PA		—		217,734		1,759,489		338,288			217,809		2,097,701		2,315,510		611,029		1989	40 yrs.
3604 Horizon Drive	King of Prussia, PA		—		397,178		—		1,628,512			350,874		1,674,816		2,025,690		719,391		1998	40 yrs.
3606 Horizon Drive	King of Prussia, PA		—		789,409		—		1,940,816			815,855		1,914,370		2,730,225		830,564		1997	40 yrs.
440 East Swedesford Road	King of Prussia, PA		—		717,001		4,816,121		2,782,658			717,001		7,598,780		8,315,780		2,974,117		1988	40 yrs.
460 East Swedesford Road	King of Prussia, PA		—		705,317		4,737,487		4,033,879			705,317		8,771,367		9,476,683		2,146,214		1988	40 yrs.
650 Swedesford Road	King of Prussia, PA		—		952,911		6,722,830		9,553,119			952,911		16,275,948		17,228,859		6,443,680		1971	40 yrs.
680 Swedesford Road	King of Prussia, PA		—		952,361		6,722,830		8,367,206			952,361		15,090,036		16,042,397		6,125,567		1971	40 yrs.
170 South Warner Road	King of Prussia, PA		—		547,800		3,137,400		3,998,873			458,232		7,225,841		7,684,073		3,247,927		1980	40 yrs.
190 South Warner Road	King of Prussia, PA		—		552,200		3,162,600		1,646,925			461,909		4,899,816		5,361,725		2,328,044		1980	40 yrs.
3000 Horizon Drive	King of Prussia, PA		—		1,191,449		—		2,309,358			946,703		2,554,103		3,500,806		624,001		1997	40 yrs.
3100 Horizon Drive	King of Prussia, PA		—		601,956		—		2,068,047			611,436		2,058,568		2,670,003		796,533		1995	40 yrs.
3500 Horizon Drive	King of Prussia, PA		—		1,204,839		—		2,630,229			1,223,875		2,611,193		3,835,068		761,849		1996	40 yrs.
11425 State Highway 225	LaPorte, TX		—		975,974		3,409,036		8,956			977,542		3,416,424		4,393,966		153,025		2006	40 yrs.
11503 State Highway 225	LaPorte, TX		—		2,561,931		9,779,023		22,961			2,566,047		9,797,868		12,363,915		349,382		2006	40 yrs.
7528 Walker Way	Lehigh Valley, PA		—		893,441		—		5,514,510			779,330		5,628,622		6,407,952		369,596		2004	40 yrs.
8301 Industrial Boulevard	Lehigh, PA		—		11,249,550		—		44,289,683			11,254,716		44,284,517		55,539,233		2,424,466		2005	40 yrs.
1201 East Whitcomb Avenue	Madison Heights, MI		—		302,567		1,213,232		(167,324	)		302,567		1,045,908		1,348,475		302,059		1980	40 yrs.
31700 Research Park Drive	Madison Heights, MI		—		373,202		1,824,721		(157,588	)		373,203		1,667,132		2,040,335		428,692		1988	40 yrs.
31811 Sherman Avenue	Madison Heights, MI		—		207,599		1,179,010		(129,901	)		207,599		1,049,109		1,256,708		285,295		1983	40 yrs.
1901 Summit Tower Boulevard	Maitland, FL		—		6,078,791		12,348,567		1,672,377			6,083,206		14,016,530		20,099,736		3,235,464		1998	40 yrs.
1 Country View Road	Malvern, PA		—		400,000		3,600,000		1,004,647			406,421		4,598,226		5,004,647		1,603,681		1982	40 yrs.
1 Great Valley Parkway	Malvern, PA		—		419,460		3,792,570		330,704			419,460		4,123,273		4,542,734		1,167,180		1982	40 yrs.
10 Great Valley Parkway	Malvern, PA		—		823,540		1,341,376		290,237			832,244		1,622,908		2,455,152		191,633		2003	40 yrs.
100 Chesterfield Parkway	Malvern, PA		—		1,320,625		—		6,708,774			1,450,534		6,578,865		8,029,399		2,515,682		1998	40 yrs.

71

LIBERTY PROPERTY TRUST
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2007

								Costs
								Capitalized										Date of
								Subsequent		Gross Amount Carried at End of Period						Accumulated		Construction		Depreciable
				Initial Cost				to		Land and		Building and		Total		Depreciation		or		life
Project	Location	Encumbrances		Land		Building		Acquisition		Improvements		Improvements		12/31/2007		12/31/07		Acquisition		(years)
OPERATING PROPERTIES
1001 Cedar Hollow Road	Malvern, PA		—		1,436,814		—		16,077,184		1,676,470		15,837,528		17,513,998		5,562,516		1998	40 yrs.
11 Great Valley Parkway	Malvern, PA		—		496,297		—		3,226,924		708,331		3,014,890		3,723,221		741,324		2001	40 yrs.
11,15 Great Valley Parkway	Malvern, PA		*		1,837,050		—		15,005,064		1,837,878		15,004,237		16,842,114		10,164,683		1986	40 yrs.
18 Great Valley Parkway	Malvern, PA		—		394,036		3,976,221		99,539		397,293		4,072,504		4,469,796		928,009		1980	40 yrs.
2 West Liberty Boulevard	Malvern, PA		—		5,405,041		—		11,329,711		5,405,042		11,329,711		16,734,753		802,169		2003	40 yrs.
200 Chesterfield Parkway	Malvern, PA		—		495,893		2,739,093		600,377		588,123		3,247,240		3,835,363		2,004,532		1989	40 yrs.
27-43 Great Valley Parkway	Malvern, PA		—		448,775		—		2,545,542		449,447		2,544,870		2,994,317		1,617,224		1977	40 yrs.
3 Country View Road	Malvern, PA		*		814,278		—		4,946,433		1,128,881		4,631,830		5,760,711		1,126,106		1998	40 yrs.
375 Technology Drive	Malvern, PA		—		191,114		—		1,961,140		234,922		1,917,331		2,152,254		761,972		1998	40 yrs.
40 Liberty Boulevard	Malvern, PA		—		4,241,137		17,737,090		2,182,842		4,241,167		19,919,901		24,161,068		5,756,934		1989	40 yrs.
425 Technology Drive	Malvern, PA		—		191,114		—		2,112,927		321,473		1,982,568		2,304,041		772,261		1998	40 yrs.
45 Liberty Boulevard	Malvern, PA		—		4,380,221		—		15,314,868		4,749,748		14,945,341		19,695,089		5,007,849		1999	40 yrs.
45-67 Great Valley Parkway	Malvern, PA		—		795,143		—		3,388,579		795,831		3,387,891		4,183,722		2,268,978		1974	40 yrs.
5 Great Valley Parkway	Malvern, PA		—		684,200		6,181,661		1,366,504		684,200		7,548,165		8,232,365		2,112,094		1983	40 yrs.
50 Morehall Road	Malvern, PA		—		849,576		—		13,043,717		1,337,076		12,556,217		13,893,293		4,795,872		1997	40 yrs.
600 Chesterfield Parkway	Malvern, PA		—		2,013,750		—		8,255,128		2,170,359		8,098,519		10,268,878		2,668,623		1999	40 yrs.
700 Chesterfield Parkway	Malvern, PA		—		2,013,750		—		8,215,954		2,157,617		8,072,087		10,229,704		2,641,192		1999	40 yrs.
10 Valley Stream Parkway	Malvern, PA		*		509,075		—		3,142,498		509,899		3,141,674		3,651,573		1,797,109		1984	40 yrs.
10, 20 Liberty Boulevard	Malvern, PA		—		724,058		—		5,760,414		724,846		5,759,626		6,484,472		2,659,056		1985	40 yrs.
12,14,16 Great Valley Parkway	Malvern, PA		—		130,689		—		1,560,924		128,767		1,562,846		1,691,613		947,476		1982	40 yrs.
14 Lee Boulevard	Malvern, PA		—		664,282		—		6,022,257		643,892		6,042,647		6,686,539		2,889,745		1988	40 yrs.
155 Great Valley Parkway	Malvern, PA		—		625,147		—		2,627,280		626,068		2,626,359		3,252,427		1,612,026		1981	40 yrs.
20 Valley Stream Parkway	Malvern, PA		—		465,539		—		5,710,974		466,413		5,710,099		6,176,513		3,109,162		1987	40 yrs.
205 Great Valley Parkway	Malvern, PA		—		1,368,259		—		10,971,028		1,369,003		10,970,284		12,339,287		6,993,606		1981	40 yrs.
256 Great Valley Parkway	Malvern, PA		—		161,098		—		1,785,717		161,949		1,784,866		1,946,815		1,199,487		1980	40 yrs.
257-275 Great Valley Parkway	Malvern, PA		—		504,611		—		5,173,127		505,458		5,172,280		5,677,738		3,167,414		1983	40 yrs.
277-293 Great Valley Parkway	Malvern, PA		—		530,729		—		2,331,543		531,534		2,330,737		2,862,272		1,408,487		1984	40 yrs.
30 Great Valley Parkway	Malvern, PA		—		128,126		—		385,634		128,783		384,977		513,760		323,191		1975	40 yrs.
300 Technology Drive	Malvern, PA		—		368,626		—		1,344,816		374,497		1,338,945		1,713,442		738,244		1985	40 yrs.
300-400 Chesterfield Parkway	Malvern, PA		—		937,212		—		5,547,950		1,012,395		5,472,767		6,485,162		2,782,618		1988	40 yrs.
311 Technology Drive	Malvern, PA		—		397,131		—		2,804,635		397,948		2,803,818		3,201,766		1,530,740		1984	40 yrs.
333 Phoenixville Pike	Malvern, PA		—		523,530		—		3,100,124		524,230		3,099,424		3,623,654		1,655,142		1985	40 yrs.
40 Valley Stream Parkway	Malvern, PA		—		322,918		—		3,190,655		325,775		3,187,798		3,513,573		1,504,112		1987	40 yrs.
420 Lapp Road	Malvern, PA		—		1,054,418		—		6,995,902		1,055,243		6,995,077		8,050,320		3,321,024		1989	40 yrs.
5 Country View Road	Malvern, PA		*		785,168		4,678,632		793,019		786,235		5,470,583		6,256,819		2,084,693		1985	40 yrs.
50 Valley Stream Parkway	Malvern, PA		—		323,971		—		2,792,354		323,792		2,792,533		3,116,325		1,263,422		1987	40 yrs.
500 Chesterfield Parkway	Malvern, PA		—		472,364		—		3,322,845		519,463		3,275,746		3,795,209		1,735,165		1988	40 yrs.
508 Lapp Road	Malvern, PA		—		331,392		—		2,021,104		332,216		2,020,280		2,352,496		1,281,611		1984	40 yrs.
510 Lapp Road	Malvern, PA		*		356,950		—		926,587		357,751		925,786		1,283,537		594,192		1983	40 yrs.
55 Valley Stream Parkway	Malvern, PA		—		215,005		—		4,393,160		215,818		4,392,348		4,608,165		2,100,807		1983	40 yrs.
60 Morehall Road	Malvern, PA		—		865,424		9,285,000		4,971,296		884,974		14,236,746		15,121,720		6,986,069		1989	40 yrs.
65 Valley Stream Parkway	Malvern, PA		—		381,544		—		7,189,981		382,361		7,189,164		7,571,525		4,191,547		1983	40 yrs.
7 Great Valley Parkway	Malvern, PA		—		176,435		—		5,102,721		177,317		5,101,840		5,279,156		3,030,399		1985	40 yrs.
75 Great Valley Parkway	Malvern, PA		279,414		143,074		—		772,076		143,811		771,338		915,150		608,527		1977	40 yrs.
77-123 Great Valley Parkway	Malvern, PA		—		887,664		—		5,983,795		888,359		5,983,100		6,871,459		3,602,353		1978	40 yrs.
7550 Meridian Circle	Maple Grove, MN		—		513,250		2,901,906		294,337		513,250		3,196,242		3,709,492		817,635		1989	40 yrs.
10 Stow Road	Marlton, NJ		—		147,000		1,451,536		787,707		147,318		2,238,925		2,386,243		1,032,155		1988	40 yrs.
12 Stow Road	Marlton, NJ		—		103,300		1,021,036		354,854		103,618		1,375,573		1,479,190		632,219		1988	40 yrs.
14 Stow Road	Marlton, NJ		—		93,100		920,336		444,304		93,418		1,364,323		1,457,740		628,804		1988	40 yrs.
301 Lippincott Drive	Marlton, NJ		—		1,069,837		4,780,163		1,577,896		1,069,838		6,358,058		7,427,896		2,328,404		1988	40 yrs.
303 Lippincott Drive	Marlton, NJ		—		1,069,837		4,780,163		3,012,067		1,069,838		7,792,229		8,862,067		2,642,524		1988	40 yrs.
400 Lippincott Drive	Marlton, NJ		—		69,402				3,653,411		317,799		3,405,014		3,722,813		1,059,150		1999	40 yrs.
402 Lippincott Drive	Marlton, NJ		—		131,896		—		1,941,830		131,896		1,941,830		2,073,726		749,536		1997	40 yrs.
404 Lippincott Drive	Marlton, NJ		—		131,896		—		1,814,934		131,896		1,814,934		1,946,830		698,698		1997	40 yrs.
406 Lippincott Drive	Marlton, NJ		—		321,455		1,539,871		1,078,839		327,554		2,612,611		2,940,165		1,043,767		1990	40 yrs.
701A Route 73 South	Marlton, NJ		—		264,387		3,772,000		3,979,178		271,743		7,743,822		8,015,565		3,565,618		1987	40 yrs.
701C Route 73 South	Marlton, NJ		—		84,949		1,328,000		451,599		96,161		1,768,387		1,864,548		721,854		1987	40 yrs.
8 Stow Road	Marlton, NJ		—		172,600		1,704,436		275,284		172,945		1,979,375		2,152,320		733,173		1988	40 yrs.
9 Stow Road	Marlton, NJ		—		652,642		1,765,065		940,082		654,779		2,703,010		3,357,789		862,641		1989	40 yrs.
901 Route 73	Marlton, NJ		—		334,411		2,733,314		822,683		334,411		3,555,997		3,890,408		1,187,738		1985	40 yrs.
65 Brookfield Oaks Drive	Mauldin, SC		—		557,174		—		2,745,259		506,318		2,796,116		3,302,434		169,900		2004	40 yrs.
75 Brookfield Oaks Drive	Mauldin, SC		—		419,731		—		2,476,356		430,909		2,465,178		2,896,087		172,319		2003	40 yrs.
10855 West Park Place	Milwaukee, WI		—		122,894				3,043,854		424,710		2,742,038		3,166,748		541,626		2002	40 yrs.
11050 West Liberty Drive	Milwaukee, WI		—		—		—		3,955,702		914,760		3,040,942		3,955,702		97,769		2005	40 yrs.
11100 West Liberty Drive	Milwaukee, WI		—		1,800,000				7,537,760		1,801,024		7,536,736		9,337,760		1,032,265		2003	40 yrs.
11301 W. Lake Park Drive	Milwaukee, WI		—		614,477		2,626,456		123,888		619,465		2,745,357		3,364,821		610,435		1987	40 yrs.
11400 W. Lake Park Drive	Milwaukee, WI		—		439,595		2,357,904		255,382		443,101		2,609,780		3,052,881		593,216		1986	40 yrs.
11414 West Park Place	Milwaukee, WI		—		234,443				10,613,283		491,531		10,356,196		10,847,727		2,698,542		2001	40 yrs.
11425 W. Lake Park Drive	Milwaukee, WI		—		382,256		2,350,619		978,198		385,305		3,325,768		3,711,073		1,141,533		1987	40 yrs.
11520 West Calumet Road	Milwaukee, WI		—		341,698		1,527,548		78,494		341,698		1,606,042		1,947,740		326,648		1995	40 yrs.
11900 W. Lake Park Drive	Milwaukee, WI		—		347,853		2,396,887		1,077,279		350,628		3,471,392		3,822,020		1,064,356		1987	40 yrs.
11950 W. Lake Park Drive	Milwaukee, WI		—		391,813		2,340,118		570,702		394,938		2,907,695		3,302,633		848,494		1986	40 yrs.
12100 West Park Place	Milwaukee, WI		—		534,470		3,239,389		572,084		532,370		3,813,573		4,345,943		943,035		1984	40 yrs.

72

LIBERTY PROPERTY TRUST
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2007

								Costs
								Capitalized										Date of
								Subsequent		Gross Amount Carried at End of Period						Accumulated		Construction		Depreciable
				Initial Cost				to		Land and		Building and		Total		Depreciation		or		life
Project	Location	Encumbrances		Land		Building		Acquisition		Improvements		Improvements		12/31/2007		12/31/07		Acquisition		(years)
OPERATING PROPERTIES
7800 N. 113th Street	Milwaukee, WI		—		1,711,964		6,847,857		429,943		1,711,964		7,277,800		8,989,764		1,959,403		1991	40 yrs.
4600 Nathan Lane	Minneapolis, MN		—		1,063,558				6,777,642		1,038,197		6,803,003		7,841,200		1,775,458		2002	40 yrs.
4700 Nathan Lane North	Minneapolis, MN		—		1,501,308		8,446,083		225,056		1,501,308		8,671,139		10,172,447		1,839,196		1996	40 yrs.
12501 & 12701 Whitewater Drive	Minnegonka, MN		—		2,175,209		3,948,085		7,266,874		2,177,953		11,212,215		13,390,168		1,153,911		1986	40 yrs.
5400-5500 Feltl Road	Minnetonka, MN		—		883,895		7,983,345		2,232,815		883,895		10,216,160		11,100,055		2,875,930		1985	40 yrs.
5600 & 5610 Rowland Road	Minnetonka, MN		—		828,650		7,399,409		1,601,312		829,263		9,000,107		9,829,370		3,259,190		1988	40 yrs.
3350 SW 148th Avenue	Miramar, FL		—		2,960,511		—		19,572,260		2,980,689		19,552,081		22,532,771		5,101,252		2000	40 yrs.
3400 Lakeside Drive	Miramar, FL		—		2,022,153		11,345,881		1,490,617		2,022,153		12,836,497		14,858,651		3,511,199		1990	40 yrs.
3450 Lakeside Drive	Miramar, FL		—		2,022,152		11,357,143		2,300,951		2,022,152		13,658,094		15,680,246		3,968,825		1990	40 yrs.
324 Park Knoll Drive	Morrisville, NC		—		1,449,092		4,424,932		173,445		1,449,450		4,598,019		6,047,469		32,711		2007	40 yrs.
619 Distribution Drive	Morrisville, NC		—		1,031,430		5,655,167		189,953		1,031,685		5,844,865		6,876,550		60,731		2007	40 yrs.
627 Distribution Drive	Morrisville, NC		—		1,061,370		5,152,110		192,986		1,061,632		5,344,834		6,406,466		34,509		2007	40 yrs.
701 Distribution Drive	Morrisville, NC		—		1,300,889		5,313,226		167,064		1,301,211		5,479,968		6,781,179		28,598		2007	40 yrs.
300 Fellowship Road	Mt Laurel, NJ		—		—		—		7,338,755		1,098,904		6,239,851		7,338,755		629,250		2004	40 yrs.
3001 Leadenhall Road	Mt Laurel, NJ		—		1,925,719		191,390		10,965,396		1,936,489		11,146,016		13,082,505		1,304,946		2003	40 yrs.
302 Fellowship Road	Mt Laurel, NJ		—		1,512,120		—		2,920,827		539,060		3,893,887		4,432,947		220,401		2001	40 yrs.
350 Fellowship Road	Mt Laurel, NJ		—		2,960,159		1,449,611		4,550,124		2,970,687		5,989,207		8,959,894		180,619		2006	40 yrs.
4001 Leadenhall Road	Mt. Laurel, NJ		—		3,207,885		391,167		18,844,592		2,784,694		19,658,950		22,443,644		3,445,467		2002	40 yrs.
1000 Briggs Road	Mt. Laurel, NJ		—		288,577		2,546,537		1,457,682		288,577		4,004,219		4,292,796		1,595,432		1986	40 yrs.
1001 Briggs Road	Mt. Laurel, NJ		—		701,705		3,505,652		2,110,296		701,705		5,615,948		6,317,654		2,106,384		1986	40 yrs.
1015 Briggs Road	Mt. Laurel, NJ		—		356,987		—		3,668,207		470,659		3,554,535		4,025,194		933,413		2000	40 yrs.
1020 Briggs Road	Mt. Laurel, NJ		—		494,334		—		3,162,455		569,184		3,087,606		3,656,789		923,496		1999	40 yrs.
1025 Briggs Road	Mt. Laurel, NJ		536,925		430,990		3,714,828		1,212,452		430,990		4,927,280		5,358,270		1,665,511		1987	40 yrs.
11000, 15000 Commerce Parkway	Mt. Laurel, NJ		—		310,585		4,394,900		383,778		311,950		4,777,313		5,089,263		2,180,113		1985	40 yrs.
12000, 14000 Commerce Parkway	Mt. Laurel, NJ		—		361,800		3,285,817		977,119		362,855		4,261,881		4,624,736		1,585,428		1985	40 yrs.
1300 Route 73 North	Mt. Laurel, NJ		—		449,400		3,074,850		2,117,661		450,558		5,191,353		5,641,911		1,738,175		1988	40 yrs.
16000, 18000 Commerce Parkway	Mt. Laurel, NJ		—		289,700		2,512,683		753,744		290,545		3,265,582		3,556,127		1,220,192		1985	40 yrs.
17000 Commerce Parkway	Mt. Laurel, NJ		—		144,515				3,445,866		144,515		3,445,866		3,590,381		814,659		2001	40 yrs.
2000 Crawford Place	Mt. Laurel, NJ		—		310,831		2,797,744		2,845,000		310,831		5,642,744		5,953,575		2,302,923		1986	40 yrs.
3000 Atrium Way	Mt. Laurel, NJ		—		500,000		4,500,000		4,885,795		512,018		9,373,777		9,885,795		4,217,090		1987	40 yrs.
5000 Dearborn Court	Mt. Laurel, NJ		—		1,057,763		4,191,827		1,619,444		1,057,763		5,811,271		6,869,034		1,359,893		1988	40 yrs.
6000 Commerce Parkway	Mt. Laurel, NJ		—		234,151		2,022,683		913,691		234,151		2,936,374		3,170,525		962,597		1985	40 yrs.
7000 Commerce Parkway	Mt. Laurel, NJ		—		260,014		2,236,684		427,949		260,014		2,664,633		2,924,647		828,409		1984	40 yrs.
8000 Commerce Parkway	Mt. Laurel, NJ		—		234,814		1,995,098		518,122		234,814		2,513,220		2,748,034		682,267		1983	40 yrs.
9000 Commerce Parkway	Mt. Laurel, NJ		—		286,587		2,474,820		986,021		286,587		3,460,840		3,747,428		1,116,743		1983	40 yrs.
6 Terry Drive	Newtown, PA		—		622,029		2,228,851		846,148		622,205		3,074,822		3,697,027		991,218		1981	40 yrs.
550-590 Hale Avenue	Oakdale, MN		—		765,535		3,488,754		557,745		766,390		4,045,644		4,812,034		1,009,344		1996	40 yrs.
1879 Lamont Avenue	Odenton, MD		—		1,976,000		8,099,579		2,469,160		2,011,030		10,533,709		12,544,739		873,140		2004	40 yrs.
350 Winmeyer Avenue	Odenton, MD		—		1,778,400		7,289,165		1,867,935		1,809,927		9,125,573		10,935,500		675,355		2004	40 yrs.
10003 Satellite Boulevard	Orlando, FL		—		680,312		2,120,754		1,487,165		680,312		3,607,919		4,288,231		544,415		2003	40 yrs.
10511 & 10611 Satellite Boulevard	Orlando, FL		—		517,554		2,568,186		486,338		522,991		3,049,087		3,572,078		934,847		1985	40 yrs.
10771 Palm Bay Drive	Orlando, FL		—		664,605				2,362,814		685,383		2,342,035		3,027,419		358,052		2001	40 yrs.
1090 Gills Drive	Orlando, FL		—		878,320		2,558,833		1,371,034		878,320		3,929,867		4,808,187		425,791		2003	40 yrs.
1400-1440 Central Florida Parkway	Orlando, FL		—		518,043		2,561,938		532,512		518,043		3,094,451		3,612,493		805,450		1962	40 yrs.
1902 Cypress Lake Drive	Orlando, FL		—		523,512		3,191,790		880,341		538,512		4,057,131		4,595,643		1,229,775		1989	40 yrs.
1950 Summit Park Drive	Orlando, FL		—		2,573,700		17,478,646		551,660		2,583,667		18,020,339		20,604,006		1,280,052		2005	40 yrs.
1958 Summit Park Drive	Orlando, FL		—		2,573,961		11,206,937		8,841,420		2,583,216		20,039,102		22,622,318		1,460,000		2005	40 yrs.
2202 Taft-Vineland Road	Orlando, FL		—		—		—		6,630,654		1,283,713		5,346,941		6,630,654		818,689		2004	40 yrs.
2216 Directors Row	Orlando, FL		—		453,918		2,572,202		27,479		453,918		2,599,681		3,053,599		621,042		1998	40 yrs.
2256 Taft-Vineland Road	Orlando, FL		—		467,296		—		2,494,210		825,673		2,135,833		2,961,506		168,879		2005	40 yrs.
2351 Investors Row	Orlando, FL		—		2,261,924		7,496,249		411,516		2,263,211		7,906,478		10,169,689		580,050		2004	40 yrs.
2400 South Lake Orange Drive	Orlando, FL		—		385,964		—		2,408,252		642,427		2,151,789		2,794,216		428,649		2001	40 yrs.
2416 Lake Orange Drive	Orlando, FL		—		535,964				3,157,069		704,800		2,988,233		3,693,033		860,785		2002	40 yrs.
3701-3727 Vineland Road	Orlando, FL		—		767,929		2,096,504		412,624		767,929		2,509,128		3,277,057		636,115		1985	40 yrs.
6200 Lee Vista Boulevard	Orlando, FL		—		1,423,584		6,399,510		65,322		1,435,301		6,453,115		7,888,416		305,622		2006	40 yrs.
6501 Lee Vista Boulevard	Orlando, FL		—		903,701				5,560,142		925,671		5,538,172		6,463,843		885,582		2001	40 yrs.
6923 Lee Vista Boulevard	Orlando, FL		—		903,701		—		3,790,657		830,953		3,863,405		4,694,358		87,873		2006	40 yrs.
7022 TPC Drive	Orlando, FL		—		1,443,510		6,845,559		537,018		1,457,286		7,368,802		8,826,087		313,517		2006	40 yrs.
7100 TPC Drive	Orlando, FL		—		1,431,489		7,948,341		467,474		1,445,807		8,401,496		9,847,303		295,955		2006	40 yrs.
7101 TPC Drive	Orlando, FL		—		1,553,537		5,301,499		780,510		1,570,863		6,064,683		7,635,546		218,818		2006	40 yrs.
7315 Kingspointe Parkway	Orlando, FL		—		1,931,697		6,388,203		2,218,758		1,932,004		8,606,654		10,538,658		956,926		2004	40 yrs.
9550 Satellite Boulevard	Orlando, FL		—		574,831		—		2,331,726		587,319		2,319,238		2,906,557		656,120		1999	40 yrs.
9600 Satellite Boulevard	Orlando, FL		—		252,850		1,297,923		62,116		252,850		1,360,039		1,612,889		376,669		1989	40 yrs.
9700 Satellite Boulevard	Orlando, FL		—		405,362		1,146,546		350,999		405,362		1,497,545		1,902,907		430,141		1989	40 yrs.
South Center Land-Phase II	Orlando, FL		—		838,853		—		4,081,850		767,953		4,152,751		4,920,703		167,128		2006	40 yrs.
N26 W23445 Paul Road	Pewaukee, WI		—		561,904		1,928,064		113,241		561,904		2,041,305		2,603,209		416,363		1985	40 yrs.
1 Crescent Drive	Philadelphia, PA		—		567,280		—		13,553,937		347,892		13,773,325		14,121,217		456,979		2004	40 yrs.
17th & JFK Tower	Philadelphia, PA		—		—				360,323,148		17,722,105		342,601,043		360,323,148		1,780,004		2005	40 yrs.
3 Franklin Plaza	Philadelphia, PA		—		2,483,144		—		32,150,134		2,514,519		32,118,759		34,633,278		6,965,923		1999	40 yrs.
4751 League Island Boulevard	Philadelphia, PA		—		992,965		331,924		6,753,197		1,022,081		7,056,006		8,078,087		781,613		2003	40 yrs.
4775 League Island Boulevard	Philadelphia, PA		—		891,892		—		5,297,375		366,982		5,822,285		6,189,267		11,338		2006	40 yrs.
8801 Tinicum Boulevard	Philadelphia, PA		—		2,474,031		—		43,598,952		125,087		45,947,896		46,072,983		13,773,560		1997	40 yrs.
4207 E. Cotton Center Boulevard	Phoenix, AZ		—		1,409,908		4,680,808		1,092,527		1,410,248		5,772,995		7,183,243		147,155		2007	40 yrs.

73

LIBERTY PROPERTY TRUST
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2007

								Costs
								Capitalized										Date of
								Subsequent		Gross Amount Carried at End of Period						Accumulated		Construction		Depreciable
				Initial Cost				to		Land and		Building and		Total		Depreciation		or		life
Project	Location	Encumbrances		Land		Building		Acquisition		Improvements		Improvements		12/31/2007		12/31/07		Acquisition		(years)
OPERATING PROPERTIES
4217 E. Cotton Center Boulevard	Phoenix, AZ		—		4,831,925		10,045,599		969,985		4,833,088		11,014,421		15,847,509		193,521		2007	40 yrs.
4303 E. Cotton Center Boulvard	Phoenix, AZ		*		2,619,964		9,675,711		—		2,619,964		9,675,711		12,295,675		156,380		2007	40 yrs.
4313 E. Cotton Center Boulevard	Phoenix, AZ		*		3,895,539		16,724,283		567,679		3,895,539		17,291,962		21,187,501		264,137		2007	40 yrs.
4405 E. Cotton Center Boulevard	Phoenix, AZ		*		2,646,318		9,697,439		—		2,646,318		9,697,439		12,343,757		142,330		2007	40 yrs.
4410 E. Cotton Center Boulevard	Phoenix, AZ		—		4,758,484		10,559,563		900,340		4,765,172		11,453,215		16,218,387		—		2007	40 yrs.
4415 E. Cotton Center Boulevard	Phoenix, AZ		*		1,749,957		3,767,213		—		1,749,957		3,767,213		5,517,170		83,884		2007	40 yrs.
4425 E. Cotton Center Boulvard	Phoenix, AZ		*		7,318,457		24,549,401		—		7,318,457		24,549,401		31,867,858		390,360		2007	40 yrs.
4435 E. Cotton Center Boulevard	Phoenix, AZ		—		1,910,584		1,954,020		194,883		1,911,045		2,148,443		4,059,487		—		2007	40 yrs.
4750 S. 44th Place	Phoenix, AZ		—		3,756,307		8,336,400		608,733		3,761,587		8,939,853		12,701,440		—		2007	40 yrs.
9801 80th Avenue	Pleasant Prairie, WI		—		1,692,077		7,934,794		62,495		1,689,726		7,999,640		9,689,366		1,818,205		1994	40 yrs.
2250 Hickory Road	Plymouth Meeting, PA		—		1,015,851		9,175,555		2,653,138		1,032,507		11,812,038		12,844,545		3,348,814		1985	40 yrs.
14630-14650 28th Avenue North	Plymouth, MN		—		198,205		1,793,422		791,374		198,205		2,584,796		2,783,001		781,110		1978	40 yrs.
2800 Campus Drive	Plymouth, MN		—		395,366		3,554,512		1,114,936		395,366		4,669,447		5,064,814		1,587,548		1985	40 yrs.
2800 Northwest Boulevard	Plymouth, MN		—		1,934,438		10,952,503		487,190		1,934,438		11,439,693		13,374,130		2,977,242		1995	40 yrs.
2905 Northwest Boulevard	Plymouth, MN		—		516,920		4,646,342		1,830,557		516,920		6,476,899		6,993,819		2,266,092		1983	40 yrs.
2920 Northwest Boulevard	Plymouth, MN		—		392,026		3,433,678		656,167		384,235		4,097,636		4,481,871		1,235,384		1997	40 yrs.
2955 Xenium Lane	Plymouth, MN		—		151,238		1,370,140		500,457		151,238		1,870,597		2,021,835		671,827		1985	40 yrs.
9600 54th Avenue	Plymouth, MN		—		332,317		3,077,820		1,020,792		332,317		4,098,612		4,430,929		1,194,422		1998	40 yrs.
1400 SW 6th Court	Pompano Beach, FL		—		1,157,049		4,620,956		287,361		1,157,049		4,908,317		6,065,366		1,298,386		1986	40 yrs.
1405 SW 6th Court	Pompano Beach, FL		—		392,138		1,565,787		121,640		392,138		1,687,427		2,079,565		461,163		1985	40 yrs.
1500 SW 5th Court	Pompano Beach, FL		—		972,232		3,892,085		238,659		972,232		4,130,744		5,102,975		1,104,263		1957	40 yrs.
1501 SW 5th Court	Pompano Beach, FL		—		203,247		811,093		36,963		203,247		848,057		1,051,304		226,020		1990	40 yrs.
1601 SW 5th Court	Pompano Beach, FL		—		203,247		811,093		402,780		203,247		1,213,873		1,417,120		364,809		1990	40 yrs.
1651 SW 5th Court	Pompano Beach, FL		—		203,247		811,093		126,108		203,247		937,202		1,140,449		310,094		1990	40 yrs.
595 SW 13th Terrace	Pompano Beach, FL		—		359,933		1,437,116		95,731		359,933		1,532,847		1,892,780		419,213		1984	40 yrs.
601 SW 13th Terrace	Pompano Beach, FL		—		164,413		655,933		119,530		164,413		775,463		939,875		233,732		1984	40 yrs.
605 SW 16th Terrace	Pompano Beach, FL		—		310,778		1,238,324		292,785		310,178		1,531,710		1,841,888		382,277		1965	40 yrs.
100 Westgate Parkway	Richmond, VA		—		1,140,648		101,824		8,408,649		1,456,084		8,195,037		9,651,121		1,453,495		2001	40 yrs.
1001 Boulders Parkway	Richmond, VA		—		2,073,739		5,634,796		1,504,929		2,079,643		7,133,821		9,213,463		499,923		2005	40 yrs.
10800 Nuckols Boulevard	Richmond, VA		—		1,432,462		—		14,420,839		1,794,162		14,059,139		15,853,301		2,779,955		2000	40 yrs.
1100 Boulders Parkway	Richmond, VA		—		1,276,936		12,052,192		1,061,040		1,280,662		13,109,507		14,390,169		600,025		2005	40 yrs.
200 Westgate Parkway	Richmond, VA		—		1,623,612				5,914,467		1,072,797		6,465,283		7,538,080		1,147,351		2002	40 yrs.
2300 East Parham Road	Richmond, VA		—		221,947		1,011,088		2,443		221,947		1,013,531		1,235,478		359,675		1988	40 yrs.
301 Hill Carter Parkway	Richmond, VA		—		659,456		4,836,010		625		659,456		4,836,635		5,496,091		1,552,015		1989	40 yrs.
3829-3855 Gaskins Road	Richmond, VA		—		364,165		3,264,114		39,764		364,165		3,303,879		3,668,044		812,000		1988	40 yrs.
3900 Westerre Parkway	Richmond, VA		—		392,184		—		11,586,017		1,100,000		10,878,201		11,978,201		286,520		2005	40 yrs.
4001 Carolina Avenue	Richmond, VA		—		29,443		215,914		321,189		29,443		537,103		566,546		146,750		1935	40 yrs.
4101-4127 Carolina Avenue	Richmond, VA		—		310,854		2,279,597		567,636		310,854		2,847,233		3,158,087		866,601		1973	40 yrs.
4201-4261 Carolina Avenue	Richmond, VA		—		693,203		5,083,493		1,557,085		693,203		6,640,578		7,333,781		2,105,677		1975	40 yrs.
4263-4299 Carolina Avenue	Richmond, VA		—		256,203		2,549,649		1,677,325		256,203		4,226,974		4,483,177		1,308,176		1976	40 yrs.
4263F-N. Carolina Avenue	Richmond, VA		—		91,476		—		1,642,725		91,599		1,642,601		1,734,201		488,721		1975	40 yrs.
4300 Carolina Avenue	Richmond, VA		—		2,007,717		14,927,608		496,232		2,009,136		15,422,421		17,431,557		4,912,960		1985	40 yrs.
4301-4335 Carolina Avenue	Richmond, VA		—		223,696		1,640,435		2,521,213		223,696		4,161,648		4,385,344		697,915		1978	40 yrs.
4337-4379 Carolina Avenue	Richmond, VA		—		325,303		2,385,557		1,505,735		325,303		3,891,292		4,216,595		1,416,324		1979	40 yrs.
4401-4445 Carolina Avenue	Richmond, VA		—		615,038		4,510,272		397,983		615,038		4,908,255		5,523,293		1,603,063		1988	40 yrs.
4447-4491 Carolina Avenue	Richmond, VA		—		454,056		2,729,742		293,897		454,056		3,023,639		3,477,695		1,056,031		1987	40 yrs.
4501-4549 Carolina Avenue	Richmond, VA		—		486,166		3,565,211		410,129		486,166		3,975,340		4,461,506		1,307,030		1981	40 yrs.
4551-4593 Carolina Avenue	Richmond, VA		—		474,360		3,478,646		295,023		474,360		3,773,669		4,248,029		1,197,255		1982	40 yrs.
4601-4643 Carolina Avenue	Richmond, VA		—		652,455		4,784,675		622,565		652,455		5,407,240		6,059,695		1,891,184		1985	40 yrs.
4645-4683 Carolina Avenue	Richmond, VA		—		404,616		2,967,187		1,162,867		404,616		4,130,054		4,534,670		1,855,923		1985	40 yrs.
4717-4729 Eubank Road	Richmond, VA		*		449,447		3,294,697		746,131		452,263		4,038,011		4,490,274		1,316,372		1978	40 yrs.
510 Eastpark Court	Richmond, VA		—		261,961		2,110,874		318,159		262,210		2,428,783		2,690,994		863,060		1989	40 yrs.
520 Eastpark Court	Richmond, VA		—		486,118		4,083,582		369,957		486,598		4,453,059		4,939,657		1,342,013		1989	40 yrs.
530 Eastpark Court	Richmond, VA		—		266,883		—		3,094,780		334,772		3,026,891		3,361,663		1,151,352		1999	40 yrs.
5600-5626 Eastport Boulevard	Richmond, VA		—		489,941		3,592,900		306,207		489,941		3,899,107		4,389,048		1,336,992		1989	40 yrs.
5601-5659 Eastport Boulevard	Richmond, VA		*		705,660		—		4,786,645		720,100		4,772,205		5,492,305		1,793,389		1996	40 yrs.
5650-5674 Eastport Boulevard	Richmond, VA		—		644,384		4,025,480		244,746		644,384		4,270,226		4,914,610		1,505,687		1990	40 yrs.
5700 Eastport Boulevard	Richmond, VA		—		408,729		2,697,348		803,670		408,729		3,501,018		3,909,747		1,154,787		1990	40 yrs.
5701-5799 Eastport Boulevard	Richmond, VA		—		694,644		—		5,853,069		700,503		5,847,211		6,547,713		1,790,641		1998	40 yrs.
5900 Eastport Boulevard	Richmond, VA		—		676,661		—		4,818,232		687,898		4,806,995		5,494,893		1,400,359		1997	40 yrs.
7400 Beaufont Springs Drive	Richmond, VA		—		808,581		7,273,850		848,713		810,743		8,120,401		8,931,144		549,911		2005	40 yrs.
2020 US Highway 301 South	Riverview, FL		—		1,233,639		13,608,485		109,898		1,233,800		13,718,223		14,952,022		542,277		2006	40 yrs.
6509 Franz Warner Parkway	Rock Creek, NC		—		360,494				2,829,679		372,494		2,817,679		3,190,173		604,978		2001	40 yrs.
6530 Judge Adams Road	Rock Creek, NC		—		305,821		—		4,482,749		335,061		4,453,509		4,788,570		1,012,903		1999	40 yrs.
6532 Judge Adams Road	Rock Creek, NC		—		354,903		—		3,684,570		399,988		3,639,485		4,039,473		1,094,320		1997	40 yrs.
8501 East Raintree Drive	Scottsdale, AZ		—		4,076,412		—		27,560,620		4,115,137		27,521,895		31,637,032		1,395,674		2005	40 yrs.
Renaissance Blvd & Hwy 20	Sturtevant, WI		—		2,484,450		—		21,092,616		2,487,293		21,089,772		23,577,065		289,752		2006	40 yrs.
6900 Harbor View Boulevard	Suffolk, VA		—		904,052		—		7,713,609		807,006		7,810,655		8,617,661		35,341		2006	40 yrs.
6950 Harbor View Blvd	Suffolk, VA		—		929,844		—		6,199,855		794,848		6,334,852		7,129,699		313,503		2004	40 yrs.
1301 International Parkway	Sunrise, FL		—		5,100,162		24,219,956		5,139,158		5,100,791		29,358,484		34,459,275		365,800		2006	40 yrs.
13630 NW 8th Street	Sunrise, FL		—		659,797		2,596,275		772,671		659,825		3,368,917		4,028,742		1,063,647		1991	40 yrs.
13650 NW 8th Street	Sunrise, FL		—		558,223		2,171,930		107,040		558,251		2,278,942		2,837,193		665,045		1991	40 yrs.
111 Kelsey Lane	Tampa, FL		—		359,540		1,461,850		660,118		359,540		2,121,968		2,481,508		827,031		1990	40 yrs.

74

LIBERTY PROPERTY TRUST
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2007

								Costs
								Capitalized										Date of
								Subsequent		Gross Amount Carried at End of Period						Accumulated		Construction		Depreciable
				Initial Cost				to		Land and		Building and		Total		Depreciation		or		life
Project	Location	Encumbrances		Land		Building		Acquisition		Improvements		Improvements		12/31/2007		12/31/07		Acquisition		(years)
OPERATING PROPERTIES
131 Kelsey Lane	Tampa, FL		—		511,463		—		4,455,291		559,527		4,407,227		4,966,754		1,903,048		1985	40 yrs.
150-182 Kelsey Lane	Tampa, FL		—		403,541		—		5,545,972		1,181,609		4,767,905		5,949,513		189,289		2006	40 yrs.
200-34 Kelsey Lane	Tampa, FL		—		330,097		—		3,645,946		933,362		3,042,680		3,976,042		474,230		2005	40 yrs.
3102,3104,3110 Cherry Palm Drive	Tampa, FL		—		503,767		2,787,585		1,785,138		503,767		4,572,723		5,076,490		1,466,211		1986	40 yrs.
4502 Woodland Corporate Boulevard	Tampa, FL		—		—		—		4,005,900		1,071,535		2,934,365		4,005,900		601,604		1999	40 yrs.
4503 Woodland Corporate Boulevard	Tampa, FL		—		—				3,455,368		619,913		2,835,455		3,455,368		501,809		2002	40 yrs.
4505 Woodland Corporate Boulevard	Tampa, FL		—		—				3,386,036		716,594		2,669,442		3,386,036		662,669		2002	40 yrs.
4508 Woodland Corporate Boulevard	Tampa, FL		—		498,598		—		3,057,752		556,887		2,999,463		3,556,350		666,220		2000	40 yrs.
4511 Woodland Corporate Boulevard	Tampa, FL		—		—				2,840,466		686,594		2,153,872		2,840,466		451,181		2002	40 yrs.
4520 Seedling Circle	Tampa, FL		—		854,797		42,131		2,721,233		854,797		2,763,364		3,618,161		254,918		2003	40 yrs.
4630 Woodland Corporate Boulevard	Tampa, FL		—		943,169		—		12,427,823		1,560,099		11,810,893		13,370,992		2,585,819		2000	40 yrs.
501 US Highway 301 South	Tampa, FL		—		898,884		—		3,498,107		900,508		3,496,483		4,396,991		431,370		2004	40 yrs.
5250 Eagle Trail Drive	Tampa, FL		—		952,860		—		3,581,057		952,860		3,581,057		4,533,916		927,289		1998	40 yrs.
5501-5519 Pioneer Park Boulevard	Tampa, FL		—		162,000		1,613,000		876,957		262,416		2,389,541		2,651,957		673,340		1981	40 yrs.
5690-5694 Crenshaw Street	Tampa, FL		—		181,923		1,812,496		217,470		181,923		2,029,967		2,211,890		647,007		1979	40 yrs.
701-725 South US Hwy 301	Tampa, FL		—		419,683		—		3,840,421		661,680		3,598,424		4,260,104		1,247,910		2000	40 yrs.
7621 Bald Cypress Place (Bldg N)	Tampa, FL		—		—		—		1,482,613		447,498		1,035,115		1,482,613		152,747		2001	40 yrs.
7622 Bald Cypress Place	Tampa, FL		—		—		—		1,305,584		300,000		1,005,584		1,305,584		198,160		2000	40 yrs.
7724 Woodland Center Boulevard	Tampa, FL		—		235,893		—		2,344,137		235,894		2,344,136		2,580,030		728,442		1998	40 yrs.
7725 Woodland Center Boulevard	Tampa, FL		—		553,335		—		3,240,449		771,501		3,022,283		3,793,784		723,116		1999	40 yrs.
7802-50 Woodland Center Boulevard	Tampa, FL		—		357,364		—		2,820,324		506,949		2,670,740		3,177,688		1,099,457		1999	40 yrs.
7851-7861 Woodland Center Blvd	Tampa, FL		—		548,905		2,241,627		115,828		548,905		2,357,455		2,906,360		113,405		2006	40 yrs.
7852-98 Woodland Center Boulevard	Tampa, FL		—		357,364		—		2,729,496		506,949		2,579,911		3,086,860		1,061,995		1999	40 yrs.
7920 Woodland Center Boulevard	Tampa, FL		*		1,082,648		2,445,444		23,564		1,082,648		2,469,008		3,551,656		663,487		1997	40 yrs.
7930, 8010-20 Woodland Center Boulevard	Tampa, FL		*		1,408,478		5,247,246		1,141,517		1,408,478		6,388,763		7,797,241		1,912,759		1990	40 yrs.
8001 Woodland Center Boulevard	Tampa, FL		—		350,406		—		2,453,154		438,061		2,365,500		2,803,561		622,092		1999	40 yrs.
8112-42 Woodland Center Boulevard	Tampa, FL		*		513,263		3,230,239		658,168		513,263		3,888,408		4,401,670		1,018,296		1995	40 yrs.
8154-8198 Woodland Center Boulevard	Tampa, FL		*		399,088		2,868,834		452,248		399,088		3,321,082		3,720,170		1,087,323		1988	40 yrs.
8212 Woodland Center Boulevard	Tampa, FL		*		820,882		2,322,720		14,210		820,882		2,336,931		3,157,813		622,179		1996	40 yrs.
8401-8408 Benjamin Road	Tampa, FL		—		789,651		4,454,648		2,174,068		769,789		6,648,578		7,418,367		2,471,009		1986	40 yrs.
8705 Henderson Road	Tampa, FL		—		4,303,870		23,688,409		519,669		4,304,102		24,207,846		28,511,948		1,836,933		2006	40 yrs.
8715 Henderson Road	Tampa, FL		—		3,343,910		18,325,599		113,023		3,344,090		18,438,441		21,782,532		789,087		2006	40 yrs.
8725 Henderson Road	Tampa, FL		—		3,167,787		19,126,318		9,095		3,167,958		19,135,243		22,303,200		953,382		2006	40 yrs.
8735 Henderson Road	Tampa, FL		—		3,166,130		18,735,573		744,334		3,166,300		19,479,737		22,646,038		951,131		2006	40 yrs.
8745 Henderson Road	Tampa, FL		—		2,050,439		11,173,008		287,153		2,050,548		11,460,051		13,510,600		565,095		2006	40 yrs.
8900-34 Brittany Was	Tampa, FL		—		537,194		—		4,267,109		978,019		3,826,284		4,804,303		287,568		2005	40 yrs.
8921 Brittany Way	Tampa, FL		—		224,369		1,063,882		972,276		254,493		2,006,034		2,260,527		505,264		1998	40 yrs.
9001-9015 Brittany Way	Tampa, FL		—		209,841		—		1,884,803		364,514		1,730,131		2,094,645		378,921		2000	40 yrs.
9002-9036 Brittany Way	Tampa, FL		—		492,320		—		3,964,055		899,284		3,557,092		4,456,375		506,973		2004	40 yrs.
901-933 US Highway 301 South	Tampa, FL		—		500,391				4,040,059		840,314		3,700,136		4,540,450		1,110,267		2001	40 yrs.
910-926 Chad Lane	Tampa, FL		—		201,771		—		3,381,832		628,237		2,955,366		3,583,603		107,554		2006	40 yrs.
8313 West Pierce Street	Tolleson, AZ		—		2,295,090		9,079,811		2,412,761		2,295,090		11,492,572		13,787,662		17		2007	40 yrs.
3701 Corporate Parkway	Upper Saucon, PA		—		1,078,674		—		9,555,371		901,968		9,732,077		10,634,045		224,082		2005	40 yrs.
1457 Miller Store Road	Virginia Beach, VA		—		473,689		2,663,045		817,767		474,746		3,479,756		3,954,501		434,659		2003	40 yrs.
200 Golden Oak Court	Virginia Beach, VA		—		1,116,693		6,770,480		1,252,748		1,116,693		8,023,228		9,139,920		2,264,749		1988	40 yrs.
208 Golden Oak Court	Virginia Beach, VA		—		965,177		6,728,717		1,329,024		965,177		8,057,741		9,022,918		2,342,699		1989	40 yrs.
2809 South Lynnhaven Road	Virginia Beach, VA		—		953,590		6,142,742		1,232,548		953,590		7,375,290		8,328,880		2,040,121		1987	40 yrs.
484 Viking Drive	Virginia Beach, VA		—		891,753		3,607,890		524,371		891,753		4,132,261		5,024,014		1,167,877		1987	40 yrs.
5700 Cleveland Street	Virginia Beach, VA		—		700,112		9,592,721		2,138,368		700,564		11,730,636		12,431,201		3,416,125		1989	40 yrs.
629 Phoenix Drive	Virginia Beach, VA		—		371,694		2,108,097		238,683		371,694		2,346,780		2,718,474		652,271		1996	40 yrs.
11020 West Plank Court	Wauwatosa, WI		—		464,246		2,681,255		49,877		464,246		2,731,132		3,195,378		612,819		1985	40 yrs.
1200 Liberty Ridge Drive	Wayne, PA		—		6,215,667				8,735,869		5,223,660		9,727,876		14,951,536		2,783,096		2001	40 yrs.
1500 Liberty Ridge	Wayne, PA		—		8,287,555				31,381,983		11,636,499		28,033,040		39,669,539		5,241,616		2002	40 yrs.
825 Duportail Road	Wayne, PA		—		5,536,619		16,179,213		2,937,214		5,539,281		19,113,765		24,653,046		3,324,266		1979	40 yrs.
11300-90 West Theodore Trecker Way	West Allis, WI		*		500,565		1,591,678		614,413		505,972		2,200,683		2,706,656		153,261		2005	40 yrs.
11420 West Theodore Trecker Way	West Allis, WI		—		348,146		2,057,483		27,202		350,008		2,082,824		2,432,831		133,024		2005	40 yrs.
11548 West Theodore Trecker Way	West Allis, WI		*		660,068		4,640,578		53,871		663,766		4,690,752		5,354,517		299,140		2005	40 yrs.
400-500 Brandywine Parkway	West Chester, PA		—		845,846		6,809,025		438,609		845,846		7,247,634		8,093,480		1,921,119		1988	40 yrs.
600 Brandywine Parkway	West Chester, PA		—		664,899		5,352,410		842,826		664,899		6,195,236		6,860,135		1,759,649		1988	40 yrs.
905 Airport Road	West Chester, PA		—		1,715,000		5,185,000		1,103,105		1,735,012		6,268,093		8,003,105		2,463,813		1988	40 yrs.
1 Kings Hill Aveune	West Malling, UK		—		—		—		16,892,742		4,288,389		12,604,353		16,892,742		241,857		2006	40 yrs.
42 Kings Hill Avenue	West Malling, UK		—		—		—		22,904,886		5,397,739		17,507,147		22,904,886		280,180		2005	40 yrs.
Liberty Square Retail Blocks	West Malling, UK		—		559,590		5,113,902		6,060,994		1,429,824		10,304,661		11,734,485		667,305		2006	40 yrs.
3612 La Grange Parkway	Williamsburg, VA		—		—		—		5,722,994		887,234		4,835,761		5,722,994		406,964		2003	40 yrs.
7805 Hudson Road	Woodbury, MN		—		1,279,834				10,338,324		1,385,739		10,232,420		11,618,158		2,382,922		2002	40 yrs.
777 Township Line Road	Yardley, PA		—		3,436,013		—		16,449,511		3,166,323		16,719,201		19,885,524		196,127		2005	40 yrs.
Subtotal Operating Real Estate		$	82,614,282	$	711,398,128	$	1,822,689,613	$	2,697,144,793	$	796,501,253	$	4,434,731,280	$	5,231,232,534	$	863,609,256

75

LIBERTY PROPERTY LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2007

								Costs
								Capitalized										Date of
								Subsequent		Gross Amount Carried at End of Period						Accumulated		Construction		Depreciable
				Initial Cost				to		Land and		Building and		Total		Depreciation		or		life
Project	Location	Encumbrances		Land		Building		Acquisition		Improvements		Improvements		12/31/2007		12/31/07		Acquisition		(years)
DEVELOPMENT PROPERTIES
3450 High Point Boulevard	Bethlehem, PA		—		303,197		—		3,213,090		—		3,516,287		3,516,287		—		2006		N/A
750 Park of Commerce Boulevard	Boca Raton, FL		—		2,430,000		—		11,469,957		—		13,899,957		13,899,957		—		2007		N/A
8500 Industrial Bouldvard	Breinigsville, PA		—		8,752,708		—		22,879,391		—		31,632,099		31,632,099		—		2007		N/A
95 Kriner Road	Chambersburg, PA		—		8,695,501		—		25,570,178		—		34,265,679		34,265,679		—		2006		N/A
676 Independence Parkway	Chesapeake, VA		—		1,527,303		—		3,887,406		—		5,414,710		5,414,710		—		2006		N/A
116 Pleasant Ridge Road	Greenville, SC		—		1,547,811		—		11,586,942		—		13,134,753		13,134,753		—		2006		N/A
7 Independence Pointe	Greenville, SC		—		932,484		—		9,781,292		—		10,713,776		10,713,776		—		2006		N/A
1487 South Highway 101	Greer, SC		—		464,237		—		4,540,189		—		5,004,426		5,004,426		—		2007		N/A
7361 Coca Cola Drive	Hanover, MD		—		2,245,187		—		3,858,483		—		6,103,670		6,103,670		—		2004		N/A
4475 Premier Drive	High Point, NC		—		748,693		—		4,809,800		—		5,558,493		5,558,493		—		2006		N/A
16680 Central Green Boulevard	Houston, TX		—		311,952		—		2,380,086		—		2,692,038		2,692,038		—		2001		N/A
8301 Fallbrook Drive	Houston, TX		—		4,515,862		—		3,171,777		—		7,687,639		7,687,639		—		2006		N/A
4875 Belfort Road	Jacksonville, FL		—		2,089,347		—		6,163,558		—		8,252,905		8,252,905		—		1998		N/A
3100 SW 145th Avenue	Miramar, FL		—		6,204,407		—		1,797,395		—		8,001,803		8,001,803		—		2007		N/A
330 Fellowship Road	Mount Laurel, NJ		—		3,730,570		—		11,680,261		—		15,410,831		15,410,831		—		2006		N/A
27th Street	Oak Creek, Wi		—		348,280		—		1,639,415		—		1,987,695		1,987,695		—		2007		N/A
Corporate Preserve Drive	Oak Creek, Wi		—		516,016		—		2,092,046		—		2,608,062		2,608,062		—		2007		N/A
1000 Gills Drive	Orlando, FL		—		333,873		—		2,308,480		—		2,642,353		2,642,353		—		2006		N/A
851 Gills Drive	Orlando, FL		—		267,313		—		2,357,588		—		2,624,901		2,624,901		—		2006		N/A
950 Gills Drive	Orlando, FL		—		356,418		—		2,435,279		—		2,791,697		2,791,697		—		2006		N/A
17th & JFK Tower	Philadelphia, PA		—		22,430,038				82,221,258		—		104,651,296		104,651,296		—		2005		N/A
4550 South 44th Street	Phoenix, AZ		—		5,380,972		—		820,860		—		6,201,833		6,201,833		—		2007		N/A
4610 South 44th Street	Phoenix, AZ		—		6,539,310		—		1,005,199		—		7,544,509		7,544,509		—		2007		N/A
3901 Westerre Parkway	Richmond, VA		—		634,231		—		4,722,718		—		5,356,949		5,356,949		—		2003		N/A
540 Eastpark Court	Richmond, VA		—		742,300		—		1,015,459		—		1,757,759		1,757,759		—		2007		N/A
6000 Eastport Blvd	Richmond, VA		—		872,901		—		6,356,184		—		7,229,085		7,229,085		—		1997		N/A
4631 Woodland Corporate Blvd	Tampa, FL		—		1,453,367		—		7,083,923		—		8,537,290		8,537,290		—		2006		N/A
9306-24 East Broadway Avenue	Tampa, FL		—		450,440		—		2,465,119		—		2,915,559		2,915,559		—		2007		N/A
Subtotal Development in Progress		$	—	$	84,824,719	$	—	$	243,313,335	$	—	$	328,138,055	$	328,138,055	$	—

76

LIBERTY PROPERTY TRUST
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2007

									Costs
									Capitalized										Date of
									Subsequent		Gross Amount Carried at End of Period						Accumulated		Construction		Depreciable
				Initial Cost					to		Land and		Building and		Total		Depreciation		or		life
Project	Location	Encumbrances		Land			Building		Acquisition		Improvements		Improvements		12/31/2007		12/31/07		Acquisition		(years)
LAND HELD FOR DEVELOPMENT
Perryman Road Land	Aberdeen, MD		—		12,052,635			—		222,249		12,274,884		—		12,274,884		—		2005		N/A
2 Womack Drive Land	Annapolis, MD		—		5,796,667			—		6,444		5,803,111		—		5,803,111		—		2007		N/A
LVCC Phase 2 Land	Bethlehem, PA		—		—			—		3,616,272		3,616,272		—		3,616,272		—		1998		N/A
Lehigh Valley Corporate Center Land	Bethlehem, PA		—		—			—		265,842		265,842		—		265,842		—		1987		N/A
Boca Colannade Yamato Road	Boca Raton, FL		—		2,039,735			—		566,124		2,605,859		—		2,605,859		—		1998		N/A
Flying Cloud Drive Land	Eden Pairie, MN		—		2,336,933			—		2,475,658		4,812,591		—		4,812,591		—		2007		N/A
Camelback 303 Business Center Land	Goodyear, AZ		—		16,857,556			—		1,998,015		18,855,571		—		18,855,571		—		2007		N/A
Pleasant Ridge Road Land	Greensboro, NC		—		564,535			—		2,862,532		3,427,067		—		3,427,067		—		2006		N/A
Southchase Business Park Land	Greenville, SC		—		1,308,325			—		757,227		2,065,552		—		2,065,552		—		1998		N/A
Caliber Ridge Ind. Park Land	Greer, SC		—		2,297,492			—		3,554,811		5,852,303		—		5,852,303		—		2007		N/A
Hunters Green Land	Hagerstown, MD		—		8,845,793			—		10,284,365		19,130,158		—		19,130,158		—		2006		N/A
Lakefront Plaza II Land	Hampton, VA		229,950		138,101			—		88,708		226,810		—		226,810		—		2001		N/A
Mendenhall Land	High Point, NC		—		1,757,675			—		4,525,346		6,283,021		—		6,283,021		—		1995		N/A
Piedmond Centre Land	High Point, NC		—		913,276			—		630,877		1,544,153		—		1,544,153		—		2006		N/A
Commonwealth Corporate Center Land	Horsham, PA		—		3,043,938			—		23,755		3,067,693		—		3,067,693		—		2005		N/A
10970 Windfern Road Land	Houston, TX		—		1,626,185			—		22,132		1,648,317		—		1,648,317		—		2007		N/A
Beltway 8 @Bammel Bus Park Land	Houston, TX		—		1,072,634			—		8,882		1,081,517		—		1,081,517		—		2007		N/A
Central Green Land — Tract 5	Houston, TX		—		4,169,183			—		188,818		4,358,001		—		4,358,001		—		2007		N/A
Greens Crossing Land	Houston, TX		—		2,476,892			—		11,987		2,488,880		—		2,488,880		—		2007		N/A
Rankin Road Land	Houston, TX		—		5,756,865			—		6,144		5,763,008		—		5,763,008		—		2007		N/A
Windfern Drive Land	Houston, TX		—		1,223,132			—		21,533		1,244,665		—		1,244,665		—		2006		N/A
Noxell Land	Hunt Valley, MD		—		2,040,690			—		0		2,040,690		—		2,040,690		—		2001		N/A
7024 AC Skinner Parkway	Jacksonville, FL		—		751,448			—		73,504		824,952		—		824,952		—		1995		N/A
Belfort Road	Jacksonville, FL		—		492,908			—		85,585		578,493		—		578,493		—		1998		N/A
Liberty Business Park Land	Jacksonville, FL		—		456,269			—		81,847		538,116		—		538,116		—		1995		N/A
Salisbury Road Land	Jacksonville, FL		—		1,402,337			—		191,977		1,594,314		—		1,594,314		—		2000		N/A
Skinner Land Parcel B	Jacksonville, FL		—		2,295,790			—		1,230,144		3,525,934		—		3,525,934		—		2005		N/A
Kent County, UK	Kent County, UK		—		—			—		33,743,050		33,743,050		—		33,743,050		—		2006		N/A
Boulders Business Center Land	Lehigh, PA		—		6,398,815			—		5,189,466		11,588,281		—		11,588,281		—		2004		N/A
Commodore Business Park	Logan, NJ		—		792,118			—		873,151		1,665,269		—		1,665,269		—		1995		N/A
Quarry Ridge Land	Malvern, PA		—		4,774,994			—		6,092,321		10,867,315		—		10,867,315		—		2001		N/A
Park Place South Land	Milwaukee, WI		—		1,290,032			—		2,483,774		3,773,806		—		3,773,806		—		1999		N/A
Monarch Towne Center Land	Mirarar, FL		—		6,085,337			—		124,502		6,209,839		—		6,209,839		—		2006		N/A
South 27th Street Land	Oak Creek, WI		—		2,169,232			—		1,476,056		3,645,288		—		3,645,288		—		2006		N/A
Beachline Industrial Park Land	Orlando, FL		—		1,306,285			—		134,382		1,440,667		—		1,440,667		—		2006		N/A
Maitland Summit Park Land	Orlando, FL		—		4,415,496			—		20,425		4,435,921		—		4,435,921		—		2005		N/A
JFK & Arch Parking Lots/Land (West)	Philadelphia, PA		—		4,792,286			—		5,538,129		10,330,415		—		10,330,415		—		2000		N/A
Cotton Center Land	Phoenix, AZ		—		4,449,689			—		40		4,449,729		—		4,449,729		—		2007		N/A
Eastport IX	Richmond, VA		—		211,627			—		3,325		214,952		—		214,952		—		1997		N/A
Eastport VIII	Richmond, VA		—		382,698			—		3,325		386,023		—		386,023		—		1997		N/A
IRS Distribution Ctr Land	Richmond, VA		—		12,981	#		—		—		12,981		—		12,981		—		1995		N/A
Woodlands Center Land	Sandston, VA		—		148,314			—		13,879		162,193		—		162,193		—		1996		N/A
Northsight Land (LPLP)	Scottsdale, AZ		—		6,176,464			—		2,204,597		8,381,061		—		8,381,061		—		2005		N/A
Old Scotland Road Land	Shippensburg, PA		—		8,322,686			—		1,897,285		10,219,971		—		10,219,971		—		2007		N/A
Bridgeway II Land	Suffolk, VA		—		603,391			—		1,981,044		2,584,435		—		2,584,435		—		2005		N/A
Suffolk Land	Suffolk, VA		—		2,715,714			—		571,339		3,287,053		—		3,287,053		—		2006		N/A
6119 W. Linebaugh Avenue	Tampa, FL		—		180,136			—		18,070		198,205		—		198,205		—		2000		N/A
Renaissance Park Land	Tampa, FL		—		1,995,375			—		420,882		2,416,257		—		2,416,257		—		2007		N/A
Tampa Triangle Land	Tampa, FL		—		10,358,826			—		1,234,140		11,592,966		—		11,592,966		—		2006		N/A
Subtotal Land Held for Development		$	229,950	$	81,716,995		$	—	$	67,543,831	$	247,123,454	$	—	$	247,123,454	$	—
Total All Properties		$	82,844,232	$	877,939,842		$	1,822,689,613	$	3,008,001,959	$	1,043,624,707	$	4,762,869,335	$	5,806,494,042	$	863,609,256

* Denotes property is collateralized under mortgages with American General, USG Annuity and Life, Metropolitan Life and LaSalle Bank totaling $159.8 million.

77

SCHEDULE III

LIBERTY PROPERTY TRUST
REAL ESTATE AND ACCUMULATED DEPRECIATION
(In thousands)

A summary of activity for real estate and accumulated depreciation is as follows:

	Year Ended December 31,
	2007			2006			2005
REAL ESTATE:
Balance at beginning of year	$	5,136,024		$	4,680,178		$	4,332,444
Additions		945,663			823,880			653,167
Disposition of property		(275,193	)		(368,034	)		(305,433	)
Balance at end of year	$	5,806,494		$	5,136,024		$	4,680,178
ACCUMULATED DEPRECIATION:
Balance at beginning of year	$	786,778		$	715,983		$	664,652
Depreciation expense		127,762			121,778			120,496
Disposition of property		(50,931	)		(50,983	)		(69,165	)
Balance at end of year	$	863,609		$	786,778		$	715,983

78

Management’s Annual Report on Internal Control Over Financial Reporting

To the Partners of Liberty Property Limited Partnership:

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a – 15 (f) and 15d – 15(f). The Company’s internal control system was designed to provide reasonable assurance to the Company’s management regarding the preparation and fair presentation of published financial statements.

Under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, we assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2007. In making this assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commissions (COSO) in Internal Control – Integrated Framework. Based on our assessment we believe that, as of December 31, 2007, the Company’s internal control over financial reporting is effective based on those criteria.

The Company’s independent registered public accounting firm, Ernst & Young LLP, has issued an attestation report on the Company’s internal controls over financial reporting, which is included in this Annual Report on Form 10-K.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

February 26, 2008

79

Report of Independent Registered Public Accounting Firm

The Partners of Liberty Property Limited Partnership

We have audited Liberty Property Limited Partnership’s (the “Operating Partnership”) internal control over financial reporting as of December 31, 2007, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). The Operating Partnership’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Operating Partnership’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, Liberty Property Limited Partnership maintained, in all material respects, effective internal control over financial reporting as of December 31, 2007, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets as of December 31, 2007 and 2006, and the related consolidated statements of operations, owners’ equity, and cash flows for each of the three years in the period ended December 31, 2007 of Liberty Property Limited Partnership and our report dated February 26, 2008 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

Philadelphia, Pennsylvania
February 26, 2008

80

Report of Independent Registered Public Accounting Firm

The Partners of Liberty Property Limited Partnership

We have audited the accompanying consolidated balance sheets of Liberty Property Limited Partnership (the “Operating Partnership”) as of December 31, 2007 and 2006, and the related consolidated statements of operations, owners’ equity, and cash flows for each of the three years in the period ended December 31, 2007. Our audits also included the financial statement schedule listed in the Index at Item 15. These financial statements and schedule are the responsibility of the Operating Partnership’s management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Liberty Property Limited Partnership at December 31, 2007 and 2006, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2007, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Liberty Property Limited Partnership’s internal control over financial reporting as of December 31, 2007, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 26, 2008 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

Philadelphia, Pennsylvania
February 26, 2008

81

CONSOLIDATED BALANCE SHEETS OF
LIBERTY PROPERTY LIMITED PARTNERSHIP
(IN THOUSANDS)

	December 31,
	2007			2006
ASSETS
Real estate:
Land and land improvements	$	796,501		$	666,588
Buildings and improvements		4,434,731			3,735,583
Less accumulated depreciation		(863,609	)		(786,778	)
Operating real estate		4,367,623			3,615,393
Development in progress		328,138			538,521
Land held for development		247,124			195,332
Net real estate		4,942,885			4,349,246
Cash and cash equivalents		37,989			53,737
Restricted cash		34,567			55,671
Accounts receivable		18,416			20,753
Deferred rent receivable		80,087			71,894
Deferred financing and leasing costs, net		144,689			127,902
Investments in and advances to unconsolidated joint ventures		278,383			54,723
Assets held for sale		—			113,150
Prepaid expenses and other assets		101,733			63,835
Total assets	$	5,638,749		$	4,910,911
LIABILITIES
Mortgage loans	$	243,169		$	185,978
Unsecured notes		2,155,000			1,955,000
Credit facility		622,960			246,960
Accounts payable		44,666			40,633
Accrued interest		39,725			36,297
Distributions payable		59,849			58,961
Other liabilities		263,738			217,751
Total liabilities		3,429,107			2,741,580
Minority interest		517			419
OWNERS’ EQUITY
General partner’s equity — common units		1,837,021			1,871,604
Limited partners’ equity — preferred units		287,960			210,960
— common units		84,144			86,348
Total owners’ equity		2,209,125			2,168,912
Total liabilities and owners’ equity	$	5,638,749		$	4,910,911

See accompanying notes.

82

CONSOLIDATED STATEMENTS OF OPERATIONS OF
LIBERTY PROPERTY LIMITED PARTNERSHIP
(IN THOUSANDS, EXCEPT PER UNIT AMOUNTS)

	Year Ended December 31,
	2007			2006			2005
OPERATING REVENUE
Rental	$	487,884		$	433,952		$	421,224
Operating expense reimbursement		210,863			184,407			166,952
Total operating revenue		698,747			618,359			588,176
OPERATING EXPENSES
Rental property		147,326			125,895			117,593
Real estate taxes		73,784			65,757			59,412
General and administrative		54,116			46,157			38,113
Depreciation and amortization		158,355			134,433			125,703
Total operating expenses		433,581			372,242			340,821
Operating income		265,166			246,117			247,355
OTHER INCOME (EXPENSE)
Interest and other income		11,748			8,714			6,961
Interest expense		(129,301	)		(111,514	)		(110,995	)
Total other income(expense)		(117,553	)		(102,800	)		(104,034	)
Income before property dispositions, income taxes, minority interest and equity in (loss) earnings of unconsolidated joint ventures		147,613			143,317			143,321
Gain on property dispositions		1,452			17,628			86,114
Income taxes		709			(288	)		(14,827	)
Minority interest		(101	)		7			(357	)
Equity in (loss) earnings of unconsolidated joint ventures		(226	)		1,432			2,540
Income from continuing operations		149,447			162,096			216,791
Discontinued operations (including net gain on property dispositions of $33,622, $112,620 and $36,096 for the years ended December 31, 2007, 2006 and 2005, respectively)		40,762			129,954			55,168
Net income		190,209			292,050			271,959
Preferred unit distributions		17,126			13,691			12,095
Excess of preferred unit redemption over carrying amount		696			—			500
Income available to common unitholders	$	172,387		$	278,359		$	259,364
Earnings per common unit
Basic:
Income from continuing operations	$	1.38		$	1.59		$	2.25
Income from discontinued operations		0.43			1.39			0.62
Income per common unit — basic	$	1.81		$	2.98		$	2.87
Diluted:
Income from continuing operations	$	1.38		$	1.58		$	2.21
Income from discontinued operations		0.42			1.37			0.61
Income per common unit — diluted	$	1.80		$	2.95		$	2.82
Weighted average number of common units outstanding
Basic		95,375			93,208			90,540
Diluted		95,993			94,387			91,931

See accompanying notes.

83

CONSOLIDATED STATEMENTS OF OWNERS’ EQUITY OF
LIBERTY PROPERTY LIMITED PARTNERSHIP
(IN THOUSANDS)

	General			Limited			Total
	Partner’s			Partners’			Owners’
	Equity			Equity			Equity
Balance at January 1, 2005	$	1,596,259		$	203,886		$	1,800,145
Contributions from partners		93,157			(1,664	)		91,493
Distributions to partners		(214,386	)		(21,290	)		(235,676	)
Issuance of operating partnership units		—			49,186			49,186
Foreign currency translation adjustment		(15,199	)		—			(15,199	)
Net income		249,351			22,608			271,959
Balance at December 31, 2005		1,709,182			252,726			1,961,908
Contributions from partners		107,338			(14,067	)		93,271
Distributions to partners		(221,907	)		(23,129	)		(245,036	)
Issuance of operating partnership units		—			56,302			56,302
Foreign currency translation adjustment		10,417			—			10,417
Net income		266,574			25,476			292,050
Balance at December 31, 2006		1,871,604			297,308			2,168,912
Contributions from partners		77,740			753			78,493
Distributions to partners		(278,209	)		(27,640	)		(305,849	)
Issuance of operating partnership units		—			99,958			99,958
Redemption of operating partnership units		—			(23,653	)		(23,653	)
Foreign currency translation adjustment		1,055			—			1,055
Net income		164,831			25,378			190,209
Balance at December 31, 2007	$	1,837,021		$	372,104		$	2,209,125

See accompanying notes.

84

CONSOLIDATED STATEMENTS OF CASH FLOWS OF
LIBERTY PROPERTY LIMITED PARTNERSHIP
(IN THOUSANDS)

	Year Ended December 31,
	2007			2006			2005
OPERATING ACTIVITIES
Net income	$	190,209		$	292,050		$	271,959
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		163,665			151,966			150,722
Amortization of deferred financing costs		4,137			4,244			4,758
Equity in loss (earnings) of unconsolidated joint ventures		226			(1,432	)		(2,540	)
Distributions from unconsolidated joint ventures		3,550			5,692			4,651
Minority interest in net income		101			(7	)		357
Gain on property dispositions		(35,074	)		(130,248	)		(122,210	)
Noncash compensation		8,128			6,212			5,032
Changes in operating assets and liabilities:
Restricted cash		26,211			(21,692	)		3,849
Accounts receivable		4,634			(6,879	)		1,804
Deferred rent receivable		(13,455	)		924			(6,290	)
Prepaid expenses and other assets		(14,145	)		(14,394	)		(12,488	)
Accounts payable		3,974			7,648			8,894
Accrued interest		3,428			1,405			(102	)
Other liabilities		39,070			49,412			52,353
Net cash provided by operating activities		384,659			344,901			360,749
INVESTING ACTIVITIES
Investment in properties		(307,846	)		(372,610	)		(324,340	)
Cash paid for business, net of cash acquired		(626,007	)		—			—
Investments in and advances to unconsolidated joint ventures		(227,385	)		(6,239	)		(13,790	)
Net proceeds from disposition of properties/land		996,474			492,548			415,144
Investment in development in progress		(455,784	)		(359,959	)		(235,078	)
Increase in land held for development		(137,051	)		(79,976	)		(91,436	)
Increase in deferred leasing costs		(39,232	)		(29,034	)		(37,133	)
Net cash used in investing activities		(796,831	)		(355,270	)		(286,633	)
FINANCING ACTIVITIES
Net proceeds from issuance of notes payable		415,063			—			—
Redemption of notes payable		(415,063	)		—			—
Net proceeds from issuance of unsecured notes		446,205			295,393			296,424
Repayment of unsecured notes		(250,000	)		(100,000	)		—
Repayments of mortgage loans		(16,365	)		(56,406	)		(173,926	)
Proceeds from credit facility		1,363,050			725,025			784,800
Repayments on credit facility		(987,050	)		(733,515	)		(841,350	)
Increase in deferred financing costs		(1,224	)		(1,635	)		(3,465	)
Capital contributions		170,313			113,348			135,148
Distributions to partners		(328,607	)		(242,537	)		(237,101	)
Net cash provided by (used in) financing activities		396,322			(327	)		(39,470	)
(Decrease) increase in cash and cash equivalents		(15,850	)		(10,696	)		34,646
Increase (decrease) in cash and cash equivalents related to foreign currency translation		102			2,804			(6,684	)
Cash and cash equivalents at beginning of year		53,737			61,629			33,667
Cash and cash equivalents at end of year	$	37,989		$	53,737		$	61,629
SUPPLEMENTAL DISCLOSURE OF NONCASH TRANSACTIONS
Write-off of fully depreciated property and deferred costs	$	102,902		$	87,424		$	83,794
Issuance of operating partnership common units		—			30,000			—
Acquisition of properties		(73,556	)		(3,066	)		(51,716	)
Assumption of mortgage loans		73,556			3,066			51,716

See accompanying notes.

85

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF
LIBERTY PROPERTY LIMITED PARTNERSHIP

1. ORGANIZATION

Liberty Property Trust (the “Trust”) is a self-administered and self-managed Maryland real estate investment trust (a “REIT”). Substantially all of the Trust’s assets are owned directly or indirectly, and substantially all of the Trust’s operations are conducted directly or indirectly, by its subsidiary, Liberty Property Limited Partnership, a Pennsylvania limited partnership (the “Operating Partnership” and, together with the Trust and their consolidated subsidiaries, the “Company”). The Trust is the sole general partner and also a limited partner of the Operating Partnership, owning 95.6% of the common equity of the Operating Partnership at December 31, 2007. The Company provides leasing, property management, development, acquisition, and other tenant-related services for a portfolio of industrial and office properties which are located principally within the Mid-Atlantic, Southeastern, Midwestern and Southwestern United States and the United Kingdom.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“US GAAP”) requires management to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Principles of Consolidation

The consolidated financial statements of the Company include the Operating Partnership and wholly owned subsidiaries and those subsidiaries in which the Company owns a majority voting interest with the ability to control operations of the subsidiaries and where no approval, veto or other important rights have been granted to the minority shareholders. All significant intercompany transactions and accounts have been eliminated.

Reclassifications

Certain amounts from prior years have been reclassified to conform to current-year presentation.

Real Estate and Depreciation

The properties are recorded at cost and are depreciated using the straight line method over their estimated useful lives. The estimated lives are as follows:

Building and Improvements	40 years (blended)
Capital improvements	15 — 20 years
Equipment	5 — 10 years
Tenant improvements	Term of the related lease

Expenditures directly related to acquisition or improvement of real estate, including interest and other costs capitalized during development, are included in net real estate and are stated at cost. The capitalized costs include pre-construction costs essential to the development of the property, development and construction costs, interest costs, real estate taxes, development-related salaries and other costs incurred during the period of development. Expenditures for maintenance and repairs are charged to operations as incurred.

In accordance with the Financial Accounting Standards Board (“FASB”) Statement of Financial Standards (“SFAS”) No. 141, “Business Combinations,” the Company allocates the purchase price of real estate to land, building and improvements and intangibles based on the relative fair value of each component. The value ascribed to in-place leases is based on the rental rates for the existing leases compared to market rent for leases of similar terms and present valuing the difference based on market interest rates. Origination values are also assigned to in-place leases, and, where appropriate, value is assigned to customer relationships. The Company depreciates the amounts allocated to building and improvements over 40 years and the amounts allocated to intangible assets relating to in-place leases, which are included in deferred financing and leasing costs and other liabilities in the accompanying consolidated balance sheets, over the remaining term of the related leases.

Once a property is designated as held for sale, no further depreciation expense is recorded. Operations for properties identified as held for sale and/or sold where no continuing involvement exists are presented in discontinued operations for all periods presented.

86

The Company evaluates its real estate investments, its investments in unconsolidated joint ventures and its goodwill upon occurrence of a significant adverse change in its operations to assess whether any impairment indicators are present that affect the recovery of the recorded value. If any real estate investment or investment in unconsolidated joint ventures is considered impaired, a loss is recognized to reduce the carrying value of the property to its estimated fair value.

Investments in Unconsolidated Joint Ventures

The Company accounts for its investments in unconsolidated joint ventures using the equity method of accounting as the Company exercises significant influence, but does not control these entities. Under the equity method of accounting, the net equity investment of the Company is reflected in the accompanying consolidated balance sheets and the Company’s share of net income from the joint ventures is included in the accompanying consolidated statements of operations.

Cash and Cash Equivalents

Highly liquid investments with a maturity of three months or less when purchased are classified as cash equivalents.

Restricted Cash

Restricted cash includes tenant security deposits and escrow funds that the Company maintains pursuant to certain mortgage loans. Restricted cash also includes the undistributed proceeds from the sale of residential land in Kent County, United Kingdom.

Accounts Receivable

The Company’s accounts receivable are comprised of rents and charges for property operating costs due from tenants. The Company periodically performs a detailed review of amounts due from tenants to determine if accounts receivable balances are collectible. Based on this review, accounts receivable are reduced by an allowance for doubtful accounts. The Company considers tenant credit quality and payment history and general economic conditions in determining the allowance for doubtful accounts. If the accounts receivable balance is subsequently deemed uncollectible, the receivable and allowance for doubtful account balance is written off.

The allowance for doubtful accounts at December 31, 2007 and 2006 was $6.0 million and $5.1 million, respectively.

Deferred Rent Receivable

The Company’s deferred rent receivable represents the cumulative difference between rent revenue recognized on a straight line basis and contractual payments due under the terms of tenant leases.

Goodwill

Goodwill on the Company’s consolidated balance sheet represents the amounts paid in excess of the fair value of the net assets acquired from business acquisitions accounted for under SFAS No. 141, “Business Combinations”. Pursuant to SFAS No. 142, “Accounting for Goodwill and Intangible Assets,” goodwill is not amortized to expense but rather is analyzed for impairment. In conjunction with the purchase of Republic, goodwill and other intangibles of $13 million were recorded. The goodwill is assigned to the Northern Virginia/Washington, D.C. operation which is part of the Philadelphia reportable segment and is included in prepaid expenses and other assets on the Company’s consolidated balance sheet.

Revenues

The Company earns rental income under operating leases with tenants. Rental income is recognized on a straight line basis over the applicable lease term. Operating expense reimbursements consisting of amounts due from tenants for real estate taxes, utilities and other recoverable costs are recognized as revenue in the period in which the corresponding expenses are incurred.

Termination fees (included in rental revenue) are fees that the Company has agreed to accept in consideration for permitting certain tenants to terminate their lease prior to the contractual expiration date. The Company recognizes termination fees in accordance with Staff Accounting Bulletin 104 when the following conditions are met:

a) the termination agreement is executed,

b) the termination fee is determinable,

c) all landlord services, pursuant to the terminated lease, have been rendered, and

d) collectibility of the termination fee is assured.

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Deferred Financing and Leasing Costs

Costs incurred in connection with financing or leasing are capitalized and amortized over the term of the related loan or lease. Deferred financing cost amortization is reported as interest expense. Intangible assets related to acquired in-place leases are amortized over the terms of the related leases.

Costs Incurred for Preferred Unit Issuance

Costs incurred in connection with the Company’s preferred unit issuances are reflected as a reduction of Limited partner’s equity — preferred units.

Income per Common Unit

The following table sets forth the computation of basic and diluted income per common unit (in thousands, except per unit amounts):

	2007							2006
				Weighted							Weighted
				Average							Average
	Income			Units		Per		Income			Units		Per
	(Numerator)			(Denominator)		Unit		(Numerator)			(Denominator)		Unit
Income from continuing operations	$	149,447						$	162,096
Less: Preferred unit distributions		(17,126	)						(13,691	)
Excess of preferred unit redemption over carrying amount		(696	)						—
Basic income from continuing operations
Income from continuing operations available to common unitholders		131,625			95,375	$	1.38		148,405			93,208	$	1.59
Dilutive units for long-term compensation plans		—			618				—			1,179
Diluted income from continuing operations
Income from continuing operations available to common unitholders and assumed conversions		131,625			95,993	$	1.38		148,405			94,387	$	1.58
Basic income from discontinued operations
Discontinued operations		40,762			95,375	$	0.43		129,954			93,208	$	1.39
Dilutive units for long-term compensation plans		—			618				—			1,179
Diluted income from discontinued operations
Discontinued operations		40,762			95,993	$	0.42		129,954			94,387	$	1.37
Basic income per common unit
Income available to common unitholders		172,387			95,375	$	1.81		278,359			93,208	$	2.98
Dilutive units for long-term compensation plans		—			618				—			1,179
Diluted income per common unit
Income available to common unitholders and assumed conversions	$	172,387			95,993	$	1.80	$	278,359			94,387	$	2.95

	2005
				Weighted
				Average
	Income			Units		Per
	(Numerator)			(Denominator)		Unit
Income from continuing operations	$	216,791
Less: Preferred unit distributions		(12,095	)
Excess of preferred unit redemption over carrying amount		(500	)
Basic income from continuing operations
Income from continuing operations available to common unitholders		204,196			90,540	$	2.25
Dilutive units for long-term compensation plans		—			1,391
Diluted income from continuing operations
Income from continuing operations available to common unitholders and assumed conversions		204,196			91,931	$	2.21
Basic income from discontinued operations
Discontinued operations		55,168			90,540	$	0.62
Dilutive units for long-term compensation plans		—			1,391
Diluted income from discontinued operations
Discontinued operations		55,168			91,931	$	0.61
Basic income per common unit
Income available to common unitholders		259,364			90,540	$	2.87
Dilutive units for long-term compensation plans		—			1,391
Diluted income per common unit
Income available to common unitholders and assumed Conversions	$	259,364			91,931	$	2.82

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Fair Value of Financial Instruments

The carrying value of cash and cash equivalents, restricted cash, accounts receivable, accounts payable, accrued interest, distributions payable and other liabilities are reasonable estimates of fair values because of the short-term nature of these instruments. The fair value of the Company’s long-term debt, which is based on estimates by management and on rates quoted on December 31, 2007 for comparable loans, is less than the aggregate carrying value by approximately $13.3 million at December 31, 2007.

Income Taxes

In conformity with the Internal Revenue Code and applicable state and local tax statutes, taxable income or loss of the Operating Partnership is required to be reported in the tax returns of the partners in accordance with the terms of the Partnership Agreement. However, the Company is taxed in certain states, the United Kingdom and Luxembourg. Accordingly, the Company has recognized federal, state, local and foreign taxes in accordance with US GAAP, as applicable.

Certain of the Company’s taxable REIT subsidiaries have net operating loss carryforwards available of approximately $7.1 million. These carryforwards begin to expire in 2018. The Company has considered estimated future taxable income and have determined that a valuation allowance for the full carrying value of net operating loss carryforwards is appropriate.

Foreign Currency Translation

The functional currency of the Company’s United Kingdom operations is pounds sterling. The Company translates the financial statements for the United Kingdom operations into US dollars. Gains and losses resulting from this translation do not impact the results of operations and are included in general partner’s equity-common units. Other comprehensive income (loss) was $1.1 million, $10.4 million and ($15.2 million) for the years ended December 31, 2007, 2006 and 2005, respectively. Upon sale or upon complete or substantially complete liquidation of a foreign investment, the gain or loss on the sale will include the cumulative translation adjustments that have been previously recorded in general partner’s equity-common units.

Recently Issued Accounting Standards

FIN 48

In July 2006, the FASB issued FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes” (“FIN 48”). FIN 48 is an interpretation of SFAS No. 109, “Accounting for Income Taxes,” and it seeks to reduce the diversity in practice associated with certain aspects of measurement and recognition in accounting for income taxes. In addition, FIN 48 provides guidance on derecognition, classification, interest and penalties, and accounting in interim periods and requires expanded disclosure with respect to the uncertainty in income taxes.

The Company adopted the provisions of FIN 48 on January 1, 2007. As a result of the implementation of FIN 48, no uncertain tax positions were identified which would result in the recording of a liability for unrecognized tax benefits, and correspondingly no benefit recognition was identified that would affect the effective tax rate. Additionally, there are no possibly significant unrecognized tax benefits which are reasonably expected to occur within the next 12 months. The Company’s policy is to recognize interest accrued related to unrecognized benefits in interest expense and penalties in other expense. There are no interest and penalties deducted in the current period and no interest and penalties accrued at December 31, 2007 and December 31, 2006, respectively.

The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction, certain state and local jurisdictions, the United Kingdom and Luxembourg. With few exceptions, the Company is no longer subject to U.S. federal, state, and local, or United Kingdom examinations by tax authorities for years before 2002.

SFAS No. 157

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” (“SFAS No. 157”), which defines fair value, establishes a framework for consistently measuring fair value under US GAAP and expands disclosures about fair value measurements. SFAS No. 157 is effective for the Company beginning January 1, 2008, and the provisions of SFAS No. 157 will be applied prospectively as of that date. The Company does not anticipate that the adoption of this statement will have a material effect on its financial position or results of operations.

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SFAS No. 159

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities” (“SFAS No. 159”). SFAS No. 159 provides companies with an option to report selected financial assets and liabilities at fair value and establishes presentation and disclosure requirements designed to facilitate comparisons between companies that choose different measurement attributes for similar types of assets and liabilities. SFAS No. 159 is effective for the Company beginning January 1, 2008. The Company does not anticipate that the adoption of this statement will have a material effect on its financial position or results of operations.

SFAS No. 141(R)

In December 2007, the FASB issued SFAS No. 141(R), “Applying the Acquisition Method” (“SFAS No. 141(R)”). This statement changes the accounting for acquisitions specifically eliminating the step acquisition model, changing the recognition of contingent consideration from being recognized when it is probable to being recognized at the time of acquisition, disallowing the capitalization of transaction costs and delays when restructurings related to acquisitions can be recognized. SFAS No. 141(R) is effective for fiscal years beginning after December 15, 2008 and will impact the accounting for acquisitions made beginning January 1, 2009. The Company does not anticipate that the adoption of SFAS No. 141(R) will have a material effect on the Company’s financial position or results of operations.

SFAS No. 160

In December 2007, the FASB issued SFAS No. 160, “Accounting for Noncontrolling Interests” (“SFAS No. 160”). Under this statement, noncontrolling interests are considered equity and thus the Company’s practice of reporting minority interests in the mezzanine section of the balance sheet will be eliminated. Also, under SFAS No. 160, net income will encompass the total income of all consolidated subsidiaries and there will be separate disclosure on the face of the income statement of the attribution of that income between controlling and noncontrolling interests. Last, increases and decreases in noncontrolling interests will be treated as equity transactions. The standard is effective for the year ending December 31, 2009. The Company does not anticipate that the adoption of this statement will have a material effect on its financial position or results of operations.

3. REAL ESTATE

The Company owns and operates industrial and office properties located principally in suburban mixed-use developments or business parks. The carrying value of these properties by type as of December 31, 2007 and 2006 is as follows (in thousands):

	Land		Buildings
	And Land		And				Accumulated
	Improvements		Improvements		Total		Depreciation
2007
Industrial properties	$	338,237	$	1,719,541	$	2,057,778	$	382,657
Office properties		458,264		2,715,190		3,173,454		480,952
2007 Total	$	796,501	$	4,434,731	$	5,231,232	$	863,609
2006
Industrial properties	$	300,716	$	1,606,151	$	1,906,867	$	360,903
Office properties		365,872		2,129,432		2,495,304		425,875
2006 Total	$	666,588	$	3,735,583	$	4,402,171	$	786,778

Depreciation expense was $135.4 million in 2007, $124.9 million in 2006 and $123.3 million in 2005.

As of December 31, 2007, the Company commenced development on 28 properties, which upon completion are expected to comprise 4.8 million square feet of leaseable space. As of December 31, 2007, $328.1 million had been expended for the development of these projects and an additional $179.0 million is estimated to be required for completion.

Additionally, unconsolidated joint ventures in which the Company had an interest had commenced development on four properties, which upon completion are expected to comprise 527,000 square feet of leaseable space. As of December 31, 2007, $116.8 million had been expended for the development of these projects and an additional $53.5 million is estimated to be required for completion.

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Information on the operating properties the Company sold during the years ended December 31, 2007 and 2006 is as follows:

2007 Sales
	Number of		Leaseable
Segment	Buildings		Square Feet		Proceeds
					(in thousands)
Delaware Valley
Southeastern Pennsylvania		1		141,714	$	8,650
Midwest
Lehigh Valley		1		289,800		13,775
Other		60		4,257,477		317,600
Mid-Atlantic		6		399,258		21,363
Florida		2		152,219		8,152
Total		70		5,240,468	$	369,540

2006 Sales
	Number of		Leaseable
Segment	Buildings		Square Feet		Proceeds
					(in thousands)
Delaware Valley
Southeastern Pennsylvania		3		1,146,940	$	101,700
Other		3		155,056		10,760
Midwest
Lehigh Valley		5		716,758		109,255
Other		16		2,519,409		134,375
Mid-Atlantic		16		1,449,464		139,300
Florida		3		147,262		7,474
Total		46		6,134,889	$	502,864

4. INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES

Listed below are the unconsolidated joint ventures in which the Company has a noncontrolling interest. The Company receives fees from these joint ventures for services it provides. These services include property management, leasing, development and administration. The Company may also receive a promoted interest if certain return thresholds are met. These fees are included in interest and other income in the accompanying consolidated statements of operations.

Liberty Venture I, LP

The Company has a 25% interest in Liberty Venture I, LP, an entity engaged in ownership of industrial properties in New Jersey.

As of December 31, 2007, the joint venture owned 24 industrial properties totaling 3.1 million square feet and 43 acres of developable land.

The Company recognized $802,000, $634,000, and $934,000 in fees for services during the years ended December 31, 2007, 2006 and 2005, respectively.

Kings Hill Unit Trust

On December 14, 2005, the Company entered into a joint venture agreement (“Kings Hill Unit Trust”) with Doughty Hanson & Co. Real Estate. The Company sold 15 properties with a net book value of $125.8 million to the joint venture for proceeds of $219.9 million. In addition, the Company holds a $6.0 million note receivable from the Kings Hill Unit Trust and retained a 20% ownership interest in the joint venture. The note receivable bears interest at a 9% rate. The Company recognized a $75.1 million gain net of $14.5 million of tax on the sale of the properties to the Kings Hill Unit Trust. Due to the Company’s continuing involvement in this joint venture, the operations to the date of sale, as well as the gain on sale and related taxes are included in income from continuing operations in the accompanying consolidated statements of operations. The properties which were sold are industrial and office properties and were included in the Company’s United Kingdom segment.

91

As of December 31, 2007, the joint venture owned 10 office properties and five industrial properties totaling 535,000 square feet.

Income from fees and interest was $1.6 million and $1.3 million during the years ended December 31, 2007 and 2006, respectively.

Liberty/Commerz 1701 JFK Boulevard, LP

On April 13, 2006, the Company entered into a joint venture (“Liberty/Commerz 1701 JFK Boulevard, LP”) with an affiliate of Commerzleasing und Immobilien AG, a wholly owned subsidiary of Commerzbank AG, pursuant to which it sold an 80% interest in the equity of Comcast Center, a 1.25 million square foot office tower the Company is developing in Philadelphia, Pennsylvania. The transaction valued the property at $512 million. In connection with the transaction, the joint venture obtained a $324 million forward loan commitment at a rate of 6.15% assuming the loan closes in March 2008.

Under the terms of the joint venture arrangement, the Company is obligated to complete development of the building, the estimated cost of which is approximately $495 million, and is also obligated to complete the initial lease up of the property. Based on the updated leasing schedule the Company may have to fund $5.2 million in rent support. Payments under the rent support agreement will be reduced by interest due the Company until the $324 million loan is funded. The criteria for sale recognition in accordance with SFAS No. 66, “Accounting for the Sale of Real Estate,” have not been met and this transaction is accounted for as a financing arrangement.

Liberty Illinois, LP

On April 25, 2006, the Company entered into a joint venture (“Liberty Illinois, LP”) with the New York State Common Retirement Fund, selling a 75% equity interest in six industrial properties totaling 2.1 million square feet and 104 acres of developable land. The joint venture valued the buildings and land at $125.0 million.

As of December 31, 2007, the joint venture owned 14 industrial properties totaling 4.6 million square feet and 393 acres of developable land.

The Company recognized $791,000 and $777,000 in fees for services during the years ended December 31, 2007 and 2006, respectively.

Blythe Valley JV Sarl

On September 10, 2007, the Company entered into a joint venture to acquire Blythe Valley Park, West Midlands, UK for $325 million. The park consists of 491,000 square feet of office properties and 98 acres of developable land. The Company holds a $3.9 million note receivable from Blythe Valley JV Sarl and has a 20% interest in the joint venture.

The Company recognized $446,000 in fees for services during the year ended December 31, 2007.

Liberty Washington, LP

On October 4, 2007, the Company acquired Republic Property Trust (“Republic Acquisition”), a Maryland real estate investment trust and Republic Property Limited Partnership, a Delaware limited partnership and Republic’s operating partnership (together, “Republic”) for $913 million. The acquisition of Republic was completed through the merger of Republic with a wholly owned subsidiary of the Company and the merger of Republic’s operating partnership with the Company’s Operating Partnership. Republic operated a portfolio consisting of 2.4 million square feet of office space, six acres of developable land, and a redevelopment property that, when completed, is expected to contain an additional 176,000 square feet of office space in the Northern Virginia and Washington, D.C. markets.

Concurrently, the Company formed a joint venture with New York State Common Retirement Fund to own and manage the Republic portfolio (“Republic Disposition”). The joint venture, in which the Company holds a 25% interest, purchased the Republic real estate assets for $900 million. The acquisition of Republic resulted in the Company recording $13 million in goodwill and other intangibles. In addition, the Company holds a $59.5 million note receivable from Liberty Washington, LP. The note bears interest at 5.25% and is due in September, 2008.

The Company recognized $1.3 million in fees for services during the year ended December 31, 2007.

Other Joint Ventures

As of December 31, 2007, the Company had a 50% ownership interest in three additional unconsolidated joint ventures. One of these joint ventures has one operating property and investments in properties under development and land. The other two joint ventures have investments in properties under development, land or in leaseholds and do not operate or own operating properties.

92

The Company’s share of each of the joint venture’s earnings is included in equity in (loss) earnings of unconsolidated joint ventures in the accompanying consolidated statements of operations.

The condensed balance sheets as of December 31, 2007 and 2006 and statements of operations for Liberty Venture I, LP, Liberty Illinois, LP, Kings Hill Unit Trust, Blythe Valley JV Sarl, Liberty Washington, LP and other unconsolidated joint ventures for the years ended December 31, 2007, 2006 and 2005 are as follows (in thousands):

Balance Sheets:

	December 31, 2007
	Liberty									Blythe
	Venture I,			Kings Hill			Liberty			Valley JV			Liberty
	LP			Unit Trust			Illinois, LP			Sarl			Washington, LP			Other			Total
Real estate assets	$	118,030		$	231,399		$	225,405		$	267,488		$	802,146		$	14,586		$	1,659,054
Accumulated depreciation		(13,115	)		(8,385	)		(6,533	)		(2,004	)		(5,746	)		(60	)		(35,843	)
Real estate assets, net		104,915			223,014			218,872			265,484			796,400			14,526			1,623,211
Development in progress		—			—			—			—			76,483			40,694			117,177
Land held for development		2,733			—			41,008			48,712			7,859			28,201			128,513
Other assets		24,185			17,551			11,871			18,716			19,630			15,513			107,466
Total assets	$	131,833		$	240,565		$	271,751		$	332,912		$	900,372		$	98,934		$	1,976,367
Debt	$	81,216		$	188,765		$	145,400		$	251,654		$	339,120		$	43,249		$	1,049,404
Other liabilities		2,830			50,656			3,677			40,399			8,508			3,834			109,904
Equity		47,787			1,144			122,674			40,859			552,744			51,851			817,059
Total liabilities and equity	$	131,833		$	240,565		$	271,751		$	332,912		$	900,372		$	98,934		$	1,976,367
Company’s net investment in unconsolidated joint ventures (1)	$	11,352		$	6,002		$	24,729		$	11,773		$	197,622		$	26,905		$	278,383

	December 31, 2006
	Liberty Venture I,			Kings Hill Unit			Liberty			Blythe Valley JV		Liberty Washington,
	LP			Trust			Illinois, LP			Sarl		LP		Other		Total
Real estate assets	$	116,324		$	228,120		$	119,787		$	—	$	—	$	—	$	464,231
Accumulated depreciation		(10,183	)		(4,213	)		(1,842	)		—		—		—		(16,238	)
Real estate assets, net		106,141			223,907			117,945			—		—		—		447,993
Development in progress		—			—			28,420			—		—		24,088		52,508
Land held for development		2,733			—			8,246			—		—		31,078		42,057
Other assets		13,723			20,838			6,214			—		—		13,024		53,799
Total assets	$	122,597		$	244,745		$	160,825		$	—	$	—	$	68,190	$	596,357
Debt	$	74,063		$	186,010		$	86,681		$	—	$	—	$	10,600	$	357,354
Other liabilities		1,182			49,584			5,005			—		—		4,420		60,191
Equity		47,352			9,151			69,139			—		—		53,170		178,812
Total liabilities and equity	$	122,597		$	244,745		$	160,825		$	—	$	—	$	68,190	$	596,357
Company’s net investment in unconsolidated joint ventures (1)	$	11,293		$	7,527		$	11,259		$	—	$	—	$	24,644	$	54,723

(1) Differences between the Company’s net investment in unconsolidated joint ventures and its underlying equity in the net assets of the venture is primarily a result of the deferral of gains associated with the sales of properties to joint ventures in which the Company retains an ownership interest and loans made to the joint ventures by the Company. Deferred gains are amortized to equity in earnings (loss) of joint ventures over the average estimated useful lives of the assets sold.

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Statements of Operations:

	Year Ended December 31, 2007
	Liberty Venture I,			Kings Hill Unit			Liberty			Blythe Valley JV			Liberty Washington,
	LP			Trust			Illinois, LP			Sarl			LP			Other			Total
Total revenue	$	18,457		$	19,696		$	17,360		$	5,920		$	18,203		$	397		$	80,033
Operating expense		5,807			2,374			4,433			5,265			4,273			131			22,283
		12,650			17,322			12,927			655			13,930			266			57,750
Interest		(4,240	)		(14,583	)		(6,297	)		(6,009	)		(4,299	)		(253	)		(35,681	)
Depreciation and amortization		(4,228	)		(7,058	)		(6,316	)		(2,201	)		(8,969	)		(70	)		(28,842	)
Other income/(expense)		(76	)		(645	)		(266	)		(220	)		(1,337	)		359			(2,185	)
Gain on sale		524			—			—			—			—			867			1,391
Net income (loss)	$	4,630		$	(4,964	)	$	48		$	(7,775	)	$	(675	)	$	1,169		$	(7,567	)
Company’s equity in earnings (loss) of unconsolidated joint ventures	$	1,320		$	(732	)	$	399		$	(1,514	)	$	(232	)	$	533		$	(226	)

	Year Ended December 31, 2006
	Liberty Venture I,			Kings Hill Unit			Liberty			Blythe Valley JV		Liberty Washington,
	LP			Trust			Illinois, LP			Sarl		LP		Other			Total
Total revenue	$	18,395		$	18,183		$	7,471		$	—	$	—	$	—		$	44,049
Operating expense		5,364			2,181			1,833			—		—		171			9,549
		13,031			16,002			5,638			—		—		(171	)		34,500
Interest		(4,501	)		(13,455	)		(2,527	)		—		—		—			(20,483	)
Depreciation and amortization		(4,544	)		(6,267	)		(2,502	)		—		—		—			(13,313	)
Other income/(expense)		(127	)		(604	)		5			—		—		392			(334	)
Gain on sale		2,644			—			—			—		—		138			2,782
Net income (loss)	$	6,503		$	(4,324	)	$	614		$	—	$	—	$	359		$	3,152
Company’s equity in earnings (loss) of unconsolidated joint ventures	$	1,651		$	(657	)	$	259		$	—	$	—	$	179		$	1,432

	Year Ended December 31, 2005
	Liberty Venture I,			Kings Hill Unit			Liberty		Blythe Valley JV		Liberty Washington,
	LP			Trust			Illinois, LP		Sarl		LP		Other			Total
Total revenue	$	18,592		$	745		$	—	$	—	$	—	$	—		$	19,337
Operating expense		5,859			201			—		—		—		32			6,092
		12,733			544			—		—		—		(32	)		13,245
Interest		(4,569	)		(634	)		—		—		—		—			(5,203	)
Depreciation and amortization		(4,933	)		(386	)		—		—		—		—			(5,319	)
Other income/(expense)		(184	)		(33	)		—		—		—		3,066			2,849
Gain on sale		7,555			—			—		—		—		—			7,555
Net income (loss)	$	10,602		$	(509	)	$	—	$	—	$	—	$	3,034		$	13,127
Company’s equity in earnings (loss) of unconsolidated joint ventures	$	2,650		$	(110	)	$	—	$	—	$	—	$	—		$	2,540

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5. DEFERRED FINANCING AND LEASING COSTS

Deferred financing and leasing costs at December 31, 2007 and 2006 are as follows (in thousands):

	December 31,
	2007			2006
Deferred leasing costs	$	174,573		$	145,292
Deferred financing costs		12,077			8,476
In-place lease value and related intangible asset		77,760			71,496
		264,410			225,264
Accumulated amortization		(119,721	)		(97,362	)
Total	$	144,689		$	127,902

6. INDEBTEDNESS

Indebtedness consists of mortgage loans, unsecured notes, borrowings under the credit facility and the Liberty/Commerz 1701 JFK Boulevard, LP financing arrangement. The weighted average interest rates for the years ended December 31, 2007, 2006 and 2005, were 6.4%, 6.6% and 6.6%, respectively. Interest costs during the years ended December 31, 2007, 2006 and 2005 in the amount of $45.7 million, $30.8 million and $17.7 million, respectively, were capitalized. Cash paid for interest for the years ended December 31, 2007, 2006 and 2005, was $172.9 million, $150.2 million and $148.8 million, respectively.

During the year ended December 31, 2007, the Company satisfied a $100 million 7.25% senior unsecured note and issued a $300 million 6.625% senior unsecured note due October 1, 2017. The net proceeds from this issuance were used to pay down outstanding borrowings under the Company’s unsecured credit facility and for general corporate purposes. Amounts repaid under the credit facility were subsequently drawn to pay a portion of the cash merger consideration for the purchase of Republic Property Trust.

During the year ended December 31, 2006, the Company satisfied a $100 million 6.95% medium term note and issued a $300 million 5.50% senior unsecured note due December 15, 2016. The Company used the net proceeds to pay down outstanding borrowings under the Company’s unsecured credit facility and for general corporate purposes.

The Company is subject to financial covenants contained in some of the debt agreements, the most restrictive of which are detailed below under the heading “Credit Facility.” As of December 31, 2007 the Company was in compliance with all financial covenants.

Mortgage Loans, Unsecured Notes

Mortgage loans with maturities ranging from 2008 to 2028 are collateralized by and in some instances cross-collateralized by properties with a net book value of $358.2 million.

The interest rates on $2,398.2 million of mortgage loans and unsecured notes are fixed and range from 4.6% to 8.8%. The weighted average remaining term for the mortgage loans and unsecured notes is 5.8 years.

Credit Facility

$600 Million Unsecured Revolving Credit Facility

During the fourth quarter of 2005, the Company obtained a four-year, $600 million unsecured revolving credit facility (the “$600 million Credit Facility”) replacing a $450 million unsecured revolving credit facility due January 16, 2006. Based on the Company’s present ratings, borrowings under the $600 million Credit Facility are priced at LIBOR plus 65 basis points. The $600 million Credit Facility contains a competitive bid option, whereby participating lenders bid on the interest rate to be charged. This feature is available for up to 50% of the amount of the facility. The interest rate on the $470.0 million of borrowings outstanding as of December 31, 2007 was 5.66%. The current ratings for the Company’s senior unsecured debt are Baa2, BBB, and BBB+ from Moody’s, S&P and Fitch, respectively. The $600 million Credit Facility has an accordion feature for an additional $200 million. There is also a 15 basis point annual facility fee on the current borrowing capacity. The $600 million Credit Facility expires on January 16, 2010 and may be extended for a one-year period. The $600 million Credit Facility contains financial covenants, certain of which are set forth below:

• total debt to total assets may not exceed 0.60:1;

• earnings before interest, taxes, depreciation and amortization to fixed charges may not be less than 1.50:1;

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• unsecured debt to unencumbered asset value must equal or be less than 60%; and

• unencumbered net operating income to unsecured interest expense must equal or exceed 200%.

Liberty/Commerz 1701 JFK Boulevard, LP Financing Arrangement

The equity contribution from the Company’s joint venture partner in Liberty/Commerz 1701 JFK Boulevard, LP is treated as a financing arrangement — see Note 4. This equity contribution is entitled to a return equal to the greater of 5% or the current rate on the $600 million Credit Facility.

The scheduled principal amortization and maturities of the Company’s mortgage loans, the unsecured notes outstanding, the $600 million Credit Facility, and the Liberty/Commerz 1701 JFK Boulevard, LP financing arrangement and the related weighted average interest rates are as follows (in thousands, except percentages):

												Weighted
	Mortgages											Average
	Principal		Principal		Unsecured		Credit					Interest
	Amortization		Maturities		Notes		Facility			Total		Rate
2008	$	8,693	$	34,099	$	—	$	152,960	(1)	$	195,752		5.93	%
2009		6,589		46,313		270,000		—			322,902		7.76	%
2010		5,823		4,736		200,000		470,000			680,559		6.50	%
2011		5,160		10,741		250,000		—			265,901		7.25	%
2012		4,336		32,875		235,000		—			272,211		6.47	%
2013		3,858		4,510		—		—			8,368		5.79	%
2014		3,889		2,684		200,000		—			206,573		5.66	%
2015		3,336		44,469		300,000		—			347,805		5.25	%
2016		2,409		16,880		300,000		—			319,289		5.55	%
2017		1,769		—		300,000		—			301,769		6.62	%
2018 & thereafter		—		—		100,000		—			100,000		7.50	%
	$	45,862	$	197,307	$	2,155,000	$	622,960		$	3,021,129		6.40	%

(1) Liberty/Commerz 1701 JFK Boulevard, LP financing arrangement — see above.

7. LEASING ACTIVITY

Future minimum rental payments due from tenants under noncancelable operating leases as of December 31, 2007 are as follows (in thousands):

2008	$	496,928
2009		452,480
2010		392,691
2011		327,557
2012		265,737
Thereafter		960,489
TOTAL	$	2,895,882

In addition to minimum rental payments, most leases require the tenants to pay for their pro rata share of specified operating expenses. These payments are included as operating expense reimbursement in the accompanying consolidated statements of operations.

8. OWNERS’ EQUITY

Common Units

General and Limited partners’ equity — common units relates to limited partnership interests of the Operating Partnership issued in connection with the formation of the Company and certain subsequent acquisitions. During 2006, 684,432 common units were issued in connection with an acquisition. No common units were issued in connection with acquisitions during 2005 or 2007. The common units outstanding as of December 31, 2007 have the same economic characteristics as common shares of the Trust. The 4,189,967 common units are the common units held by persons and entities other than Liberty Property Trust, the general partner of Liberty Property Limited Partnership, which holds a number of common units equal to the number of outstanding common shares of beneficial interest. Both the common units held by Liberty Property Trust and the common units held by persons and entities other than Liberty Property Trust are counted in the weighted average number of common units outstanding during any given period. The 4,189,967 common units share proportionately in the net income or loss and in any distributions of the Operating Partnership and are exchangeable into the same number of common shares of the Trust. The market value of the 4,189,967 common units based on the closing price of the shares of the Company at December 31, 2007 was $120.7 million.

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Preferred Units

The Company has outstanding the following Cumulative Redeemable Preferred Units of the Operating Partnership, (the “Preferred Units”):

Date of				Liquidation	Dividend	Redeemable
Issue	Issue	Amount	Units	Preference	Rate	As of	Exchangeable After
(in 000’s)
7/28/99	Series B	$95,000	3,800	$25	7.45%	8/31/09	1/1/14 into Series B Cumulative Redeemable Preferred Shares of the Trust
6/16/05	Series E	$20,000	400	$50	7.00%	6/16/10	6/16/15 into Series E Cumulative Redeemable Preferred Shares of the Trust
6/30/05	Series F	$44,000	880	$50	6.65%	6/30/10	6/30/15 into Series F Cumulative Redeemable Preferred Shares of the Trust
8/23/05	Series F	$6,000	120	$50	6.65%	6/30/10	6/30/15 into Series F Cumulative Redeemable Preferred Shares of the Trust
12/15/06	Series G	$27,000	540	$50	6.70%	12/12/11	12/12/16 into Series G Cumulative Redeemable Preferred Shares of the Trust
8/21/07	Series H	$100,000	4,000	$25	7.40%	8/21/12	8/21/17 into Series H Cumulative Redeemable Preferred Shares of the Trust

During the year ended December 31, 2005, the Company redeemed for $20 million its outstanding 9.125% Series C Cumulative Redeemable Preferred Units. The redemption resulted in a $0.5 million write off of Series C issuance costs.

During the year ended, December 31, 2007, the Company raised $100 million through the placement of 7.40% Series H Cumulative Redeemable Preferred Units.

During the year ended December 31, 2007, the Company redeemed for $23.7 million its outstanding 7.625% Series D Cumulative Redeemable Preferred Units. The redemption resulted in a $0.7 million write off of Series D issuance costs.

The Company paid the following Preferred Unit distributions for the year ended December 31:

	2007		2006		2005
Distributions (in millions)	$	17.1	$	13.7	$	12.1
Distribution per unit:
Series B	$	1.86	$	1.86	$	1.86
Series C		—		—	$	1.05
Series D	$	1.74	$	3.81	$	3.81
Series E	$	3.50	$	3.50	$	1.90
Series F	$	3.33	$	3.33	$	1.61
Series G	$	3.35	$	0.16		—
Series H	$	0.67		—		—

Minority Interest

Minority interest includes third-party ownership interests in consolidated joint venture investments.

9. COMMITMENTS AND CONTINGENCIES

Substantially all of the Properties and land were subject to Phase I Environmental Assessments and when appropriate Phase II Environmental Assessments (collectively, the “Environmental Assessments”) obtained in contemplation of their acquisition by the Company. The Environmental Assessments consisted of, among other activities, a visual inspection of each Property and its neighborhood and a check of pertinent public records. The Environmental Assessments did not reveal, nor is the Company aware of, any non-compliance with environmental laws, environmental liability or other environmental claim that the Company believes would likely have a material adverse effect on the Company.

The Company is obligated to make additional capital contributions to unconsolidated joint ventures of $4.2 million.

The Company has letter of credit obligations of $2.3 million related to development requirements.

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The Company maintains cash and cash equivalents at financial institutions. The combined account balances at each institution typically exceed FDIC insurance coverage and, as a result, there is a concentration of credit risk related to amounts on deposit in excess of FDIC insurance coverage. The Company believes the risk is not significant.

Litigation

The Company has been substituted for Republic as a party to certain litigation as a result of the Company’s acquisition of Republic on October 4, 2007. The litigation is summarized below. The litigation arises out of a dispute between Republic and certain parties, two of whom were members of Republic’s Board of Trustees and “founders” of Republic. The dispute includes claims arising from the termination of a development arrangement in West Palm Beach, Florida and an attempt by Republic to acquire a certain office property from an entity controlled by the aforementioned related parties pursuant to an option agreement entered into at the time of Republic’s formation.

On November 17, 2006, Republic disclosed in a Form 8-K that Steven A. Grigg, its President and Chief Development Officer, had notified it that he was terminating his employment, purportedly for “good reason,” as such term is defined in his employment agreement, dated December 20, 2005. Mr. Grigg also asserted that, as a result of such termination, he was entitled to the severance payments provided for under the terms of the employment agreement. The cash portion of such severance payments could be valued at up to approximately $1.8 million. The Company disagrees with Mr. Grigg that there is a basis for termination by Mr. Grigg for good reason; therefore, we believe that Mr. Grigg terminated his employment without good reason as of November 13, 2006, the date of his termination letter. Accordingly, we believe that no severance payments are due and we have not remitted any such payments to Mr. Grigg under the terms of his employment agreement.

On December 22, 2006, Mr. Grigg filed a lawsuit against Republic in the Superior Court of the District of Columbia. Mr. Grigg alleges, among other things, that (i) Republic breached his employment agreement, (ii) Republic breached its duties of good faith and fair dealing and (iii) the Noncompetition Agreement dated December 20, 2005 between Mr. Grigg and Republic is unenforceable and void. Mr. Grigg seeks, among other remedies, (i) the severance payment allegedly due under the employment agreement, (ii) other damages in an amount to be finally determined at trial and (iii) the voiding of the Noncompetition Agreement. The Company believes that Mr. Grigg’s lawsuit is without merit, generally denies the allegations in the complaint and denies that Mr. Grigg is entitled to any of the relief sought in his complaint. Republic originally asserted various counterclaims against Mr. Grigg, including claims for common law fraud, state securities fraud, breach of his employment agreement, breach of fiduciary duties and unjust enrichment. Republic subsequently voluntarily dismissed without prejudice its common law fraud, state securities fraud and unjust enrichment claims in order to pursue those claims in the litigation described below pending in the United States District Court for the District of Columbia. The Company’s counterclaims against Mr. Grigg for breach of his employment agreement and breach of his fiduciary duties remain pending in the District of Columbia Superior Court litigation. On March 30, 2007, the Court denied, in its entirety, Mr. Grigg’s motion to dismiss these counterclaims. The Company seeks damages and other appropriate relief on these counterclaims.

On March 6, 2007, Mr. Richard Kramer, Republic’s former Non-executive Chairman of the Board, filed a lawsuit against Republic in the United States District Court for the District of Maryland Southern Division, in which he seeks advancement for legal fees incurred by him purportedly in connection with an independent counsel’s investigation with respect to certain matters involving Republic’s course of dealing in a West Palm Beach development project, as well as those fees incurred in filing and prosecuting this lawsuit. On May 3, 2007, Mr. Kramer voluntarily dismissed this case, and filed an almost identical lawsuit against Republic in the Circuit Court of Baltimore County, Maryland. We believe that Mr. Kramer’s lawsuit is without merit and filed a motion to dismiss or, in the alternative, motion for summary judgment, seeking the dismissal of Mr. Kramer’s lawsuit. Mr. Kramer filed a motion for summary judgment against the Company. On November 2, 2007 the Court denied Mr. Kramer’s motion for summary judgment and granted the Company’s motion to dismiss. Mr. Kramer has appealed the Court’s judgment.

On March 28, 2007, Republic filed a lawsuit against Messrs. Kramer and Grigg and Republic Properties Corporation in the United States District Court of the District of Columbia. This lawsuit asserts, among other things, claims against (i) all three defendants for (a) federal and state securities fraud and (b) common law fraud; (ii) Messrs. Kramer and Grigg for (a) federal and state control person liability and (b) unjust enrichment; and (iii) Republic Properties Corporation for (a) breach of contract and (b) indemnification. The Company seeks, among other remedies, (i) damages in an amount not less than $1.2 million, the approximate value (at the time of issuance) of the partnership units issued by Republic Property Limited Partnership to Republic Properties Corporation in connection with the West Palm Beach City Center Development Contribution Agreement, (ii) additional damages incurred by us as a result of the termination of the West Palm Beach Professional Services Agreement, (iii) recovery of the costs, including attorneys fees, associated with a previously-disclosed independent investigation, (iv) reimbursement for Republic’s expenses in this litigation, including attorneys’ fees, and (v) other damages, including

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punitive damages, in an amount to be finally determined at trial. On April 27, 2007, Republic filed an Amended Complaint in the District of Columbia District Court action, adding to the claims set forth immediately above a claim for declaratory judgment that Mr. Kramer was not entitled to advancement or reimbursement of any of the fees sought in his Maryland litigation. Republic Property Corporation, Messrs. Kramer and Grigg have filed motions to dismiss this lawsuit, which are currently pending.

On May 21, 2007, Republic proffered a lease (the “Lease”) to 25 Massachusetts Avenue Property LLC (the “Owner”) for certain space in Republic Square I, an office building in Washington, D.C. (the “Option Property”). Two of Republic’s founders and Trustees, Richard L. Kramer and Steven A. Grigg, currently control the Owner and Mark R. Keller, Republic’s former Chief Executive Officer, holds an ownership interest in the Owner. Based on information provided by the Owner, immediately prior to the proffer of the Lease, approximately 50% of the Option Property’s net rentable area was under lease and approximately 37% of the Option Property’s net rentable area was rent paying space. Had the Owner accepted the Lease, more than 85% of the space in the Option Property would have been rent paying space. The base rents and other material terms of the Lease proffer were based on the Owner’s lease up projections for the Property and the Lease was on the Owner’s form lease agreement.

On May 22, 2007, the Owner rejected the proffer of the Lease, asserting, among other things, that it was “not a bona fide business proposal for Republic’s own occupancy and leasing of space”. On May 29, 2007, Republic (i) re-tendered the Lease to the Owner for certain space at the Option Property and (ii) exercised its exclusive option to purchase the fee interest in the Option Property pursuant to the Option Agreement among the Owner, 660 North Capitol Street Property LLC and Republic dated as of November 28, 2005 (the “Option Agreement”). On May 30, 2007, the Owner rejected the Lease and claimed that “there has been no effective exercise of the Option.” The Company believes that the Lease was properly tendered for an appropriate purpose and, accordingly, the Company re-proffered the Lease to the Owner. The Owner rejected the Lease proffer and disputed whether the Lease entitled Republic to purchase the Property, pursuant to its exercise of the option, at the Purchase Price (as defined in the Option Agreement).

In response to the Owner’s rejection, on June 15, 2007, Republic filed a lawsuit against the Owner in the Court of Chancery in the State of Delaware. This lawsuit asserts, among other things, that (i) by refusing to accept Republic’s option exercise the Owner has breached the Option Agreement and (ii) by deciding not to refinance a construction loan on the Property and rejecting the Lease, the Owner has breached the covenant of good faith and fair dealing implied in every contract governed by the laws of the District of Columbia. Republic sought, among other remedies, to obtain (I) an injunction against the Owner’s sale of the Option Property to any party other than Republic, (II) a declaration that the Lease and option exercise are effective and (III) an order that the Owner specifically perform its obligation to sell the Option Property to Republic pursuant to the Option Agreement. Also on June 15, 2007, Republic filed a Notice of Pendency of Action (Lis Pendens) in the Office of the Recorder of Deeds in the District of Columbia, in order to record Republic’s interest in the Option Property as reflected in the Delaware Chancery Court action. On July 2, 2007, the Owner answered the complaint and counterclaimed, seeking monetary damages related to the Owner’s purported attempts to sell the Option Property to a third party. The matter has been tried, the parties have filed post trial briefs and post trial arguments have been held. At this point, the outcome of the lawsuit is uncertain. However, it seems unlikely that the Company will have the opportunity to purchase the Option Property.

While management currently believes that resolving these matters will not have a material adverse impact on our financial position or our results of operations, the litigation noted above is subject to inherent uncertainties and management’s view of these matters may change in the future. Were an unfavorable final outcome to occur, there exists the possibility of a material adverse impact on our financial position and the results of operations for the period in which the effect becomes capable of being reasonably estimated.

Although the Company is engaged in litigation incidental to its business, there is no additional legal proceeding to which it is a party which, in the opinion of management, will materially adversely affect the results of the Company’s operations.

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10. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

A summary of quarterly results of operations for the years ended December 31, 2007 and 2006 follows. Certain amounts have been reclassified to conform to the current presentation of discontinued operations (in thousands, except per share amounts).

	Quarter Ended
	Dec. 31,		Sept. 30,		June 30,		Mar. 31,		Dec. 31,		Sept. 30,		June 30,		Mar. 31,
	2007		2007		2007		2007		2006		2006		2006		2006
Operating revenue	$	188,501	$	176,822	$	168,498	$	164,926	$	163,501	$	154,895	$	151,748	$	148,215
Income from continuing operations		31,741		37,541		39,921		40,244		38,645		36,250		53,752		33,449
Discontinued operations		10,673		5,584		19,383		5,122		28,459		16,224		21,311		63,960
Income available to common unitholders		37,161		38,879		54,834		41,513		63,616		49,073		71,662		94,008
Income per common unit – basic (1)		0.39		0.41		0.57		0.44		0.67		0.52		0.77		1.02
Income per common unit – diluted (1)		0.39		0.41		0.57		0.43		0.67		0.52		0.76		1.01

(1) The sum of quarterly financial data may vary from the annual data due to rounding.

11. PRO FORMA INFORMATION

The following unaudited pro forma information was prepared assuming the Republic Acquisition and the Republic Disposition described in Note 4 had occurred on January 1, 2006. The transaction provided the Company with a new platform of quality properties in a dynamic market.

	Year Ended December 31,
	2007		2006
	(in thousands, except per unit amounts)
Total revenue	$	712,221	$	678,163
Net income		170,415		272,391
Net income per diluted unit		1.58		2.73

This pro forma information is not necessarily indicative of what actual results of operations of the Company would have been, assuming the Company had completed the Republic Acquisition and the Republic Disposition as of January 1, 2006, nor do they purport to represent the results of operations of the Company for future periods. There were no material, nonrecurring items included in the reported pro forma results of operations.

12. SEGMENT INFORMATION

The Company operates its portfolio of properties primarily throughout the Mid-Atlantic, Southeastern, Midwestern and Southwestern United States. Additionally, the Company owns certain assets in the United Kingdom. The Company reviews the performance of the portfolio on a geographical basis. As such, the following regions are considered the Company’s reportable segments:

Reportable Segments	Markets
Delaware Valley	Southeastern Pennsylvania; New Jersey
Midwest	Lehigh Valley, Pennsylvania; Minnesota; Milwaukee; Chicago
Mid-Atlantic	Maryland; Piedmont Triad, NC; Greenville, SC; Richmond; Virginia Beach
Florida	Jacksonville; Orlando; Boca Raton; Tampa; Texas
Arizona	Phoenix
Philadelphia	Philadelphia; Northern Virginia/Washington, D.C.
United Kingdom	County of Kent; West Midlands

The Company’s reportable segments are distinct business units which are each managed separately in order to concentrate market knowledge within a geographic area. Within these reportable segments, the Company derives its revenues from its two product types: industrial properties and office properties.

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The Company began to report the results of the Arizona and Philadelphia segments during the year ended December 31, 2007. As required by SFAS No. 131 (“SFAS No. 131”) “Disclosures about Segments of an Enterprise and Related Information,” consolidated financial statements issued by the Company in the future will reflect modifications to the Company’s reportable segments resulting from the change described above, including reclassification of all comparative prior period segment information.

The Company evaluates performance of the reportable segments based on property level operating income, which is calculated as rental revenue and operating expense reimbursement less rental property expenses and real estate taxes. The accounting policies of the reportable segments are the same as those for the Company on a consolidated basis. The operating information by segment is as follows (in thousands):

YEAR ENDED DECEMBER 31, 2007

	Delaware Valley				midwest
	Southeastern				Lehigh										phila-		united
	Pennsylvania		Other		Valley		Other		mid-atlantic		florida		arizona		delphia		kingdom		total
Operating revenue	$	173,633	$	55,388	$	91,630	$	82,419	$	134,903	$	143,064	$	8,166	$	6,829	$	2,715	$	698,747
Rental property expenses and real estate taxes		57,348		18,082		23,615		28,616		41,332		49,042		1,604		1,438		33		221,110
Property level operating income	$	116,285	$	37,306	$	68,015	$	53,803	$	93,571	$	94,022	$	6,562	$	5,391	$	2,682		477,637
Interest and other income																				11,748
Interest expense																				(129,301	)
General and administrative																				(54,116	)
Depreciation and amortization																				(158,355	)
Income before property dispositions, income taxes, minority interest and equity in (loss) of unconsolidated joint ventures																				147,613
Gain on property dispositions																				1,452
Income taxes																				709
Minority interest																				(101	)
Equity in (loss) of unconsolidated joint ventures																				(226	)
Discontinued operations, net of minority interest																				40,762
Net income																			$	190,209

YEAR ENDED DECEMBER 31, 2006

	Delaware Valley				midwest
	Southeastern				Lehigh										phila-			united
	Pennsylvania		Other		Valley		Other		mid-atlantic		florida		arizona		delphia			kingdom		total
Operating revenue	$	169,297	$	52,644	$	83,849	$	77,420	$	120,168	$	111,551	$	2,263	$	—		$	1,167	$	618,359
Rental property expenses and real estate taxes		54,278		15,882		20,434		27,335		36,439		36,953		57		13			261		191,652
Property level operating income	$	115,019	$	36,762	$	63,415	$	50,085	$	83,729	$	74,598	$	2,206	$	(13	)	$	906		426,707
Interest and other income																					8,714
Interest expense																					(111,514	)
General and administrative																					(46,157	)
Depreciation and amortization																					(134,433	)
Income before property dispositions, income taxes, minority interest and equity in earnings of unconsolidated joint ventures																					143,317
Gain on property dispositions																					17,628
Income taxes																					(288	)
Minority interest																					7
Equity in earnings of unconsolidated joint ventures																					1,432
Discontinued operations, net of minority interest																					129,954
Net income																				$	292,050

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YEAR ENDED DECEMBER 31, 2005

	Delaware Valley				midwest
	Southeastern				Lehigh										phila-		united
	Pennsylvania		Other		Valley		Other		mid-atlantic		florida		arizona		delphia		kingdom		total
Operating revenue	$	171,238	$	51,205	$	76,082	$	71,461	$	102,928	$	94,767	$	—	$	166	$	20,329	$	588,176
Rental property expenses and real estate taxes		51,751		16,085		18,741		25,254		30,491		30,994		—		11		3,678		177,005
Property level operating income	$	119,487	$	35,120	$	57,341	$	46,207	$	72,437	$	63,773	$	—	$	155	$	16,651		411,171
Interest and other income																				6,961
Interest expense																				(110,995	)
General and administrative																				(38,113	)
Depreciation and amortization																				(125,703	)
Income before property dispositions, income taxes, minority interest and equity in earnings of unconsolidated joint ventures																				143,321
Gain on property dispositions																				86,114
Income taxes																				(14,827	)
Minority interest																				(357	)
Equity in earnings of unconsolidated joint ventures																				2,540
Discontinued operations, net of minority interest																				55,168
Net income																			$	271,959

	Real Estate Related Revenues
	Year Ended December 31,
Product Type Information	2007		2006		2005
Industrial	$	278,972	$	257,423	$	244,091
Office		419,775		360,936		344,085
Total operating revenue	$	698,747	$	618,359	$	588,176

ROLLFORWARD OF OPERATING REAL ESTATE ASSETS BY REPORTABLE SEGMENT

	Delaware Valley					Midwest
	Southeastern					Lehigh						Mid-								Phila-		United
	Pennsylvania			Other		Valley			Other			Atlantic			Florida			Arizona		Delphia		Kingdom		Total
January 1, 2007	$	1,048,142		$	215,405	$	582,475		$	702,188		$	888,718		$	922,155		$	31,653	$	—	$	11,435	$	4,402,171
Additions		67,645			94,481		103,750			64,050			114,748			92,323			152,994		360,324		40,097		1,090,412
Dispositions		(12,415	)		—		(9,262	)		(220,190	)		(10,591	)		(8,893	)		—		—		—		(261,351	)
December 31, 2007	$	1,103,372		$	309,886	$	676,963		$	546,048		$	992,875		$	1,005,585		$	184,647	$	360,324	$	51,532		5,231,232
Accumulated depreciation																									(863,609	)
Development in progress																									328,138
Land held for development																									247,124
Other assets																									695,864
Total assets at December 31, 2007																								$	5,638,749

102

ROLLFORWARD OF OPERATING REAL ESTATE ASSETS BY REPORTABLE SEGMENT

	Delaware Valley						Midwest
	Southeastern						Lehigh						Mid-							Phila-		United
	Pennsylvania			Other			Valley			Other			Atlantic			Florida		Arizona		Delphia		Kingdom		Total
January 1, 2006	$	1,060,198		$	183,020		$	637,301		$	755,799		$	901,213		$	646,681	$	—	$	—	$	9,838	$	4,194,050
Additions		43,199			36,807			15,006			37,853			104,185			275,474		31,653		—		1,597		545,774
Dispositions		(55,255	)		(4,422	)		(69,832	)		(91,464	)		(116,680	)		—		—		—		—		(337,653	)
December 31, 2006	$	1,048,142		$	215,405		$	582,475		$	702,188		$	888,718		$	922,155	$	31,653	$	—	$	11,435		4,402,171
Accumulated depreciation																									(786,778	)
Development in progress																									538,521
Land held for development																									195,332
Assets held for sale																									113,150
Other assets																									448,515
Total assets at December 31, 2006																								$	4,910,911

13. SFAS NO. 144 “ACCOUNTING FOR THE IMPAIRMENT OR DISPOSAL OF LONG-LIVED ASSETS”

Discontinued Operations

In accordance with SFAS No. 144, the operating results and gain/(loss) on disposition of real estate for properties sold and held for sale are reflected in the consolidated statements of operations as discontinued operations. Prior year financial statements have been adjusted for discontinued operations. The proceeds from dispositions of operating properties with no continuing involvement were $369.5 million and $395.9 million for the years ended December 31, 2007 and 2006, respectively.

Below is a summary of the results of operations of the properties disposed of through the respective disposition dates (in thousands):

	Year Ended December 31,
	2007			2006			2005
Revenues	$	31,393		$	74,718		$	106,349
Operating expenses		(12,607	)		(27,141	)		(38,327	)
Interest expense		(4,714	)		(12,732	)		(24,433	)
Depreciation and amortization		(6,932	)		(17,511	)		(24,517	)
Income before property dispositions and minority interest	$	7,140		$	17,334		$	19,072

Interest expense is allocated to discontinued operations as permitted under EITF Issue 87-24, “Allocation of Interest to Discontinued Operations,” and such interest expense has been included in computing income from discontinued operations. The allocation of interest expense to discontinued operations was based on the ratio of net assets sold (without continuing involvement) to the sum of total net assets plus consolidated debt.

Asset Impairment

In accordance with SFAS No. 144, during the years ended December 31, 2007, 2006 and 2005, the Company recognized impairment losses of $0.2 million, $4.2 million, and $5.3 million, respectively. The 2007 impairment loss of $0.2 million was related to various land parcels. The 2006 impairment loss of $4.2 million was primarily related to a 352,000 square foot portfolio of operating properties in the Midwest segment. The 2005 impairment loss of $5.3 million was primarily related to a portfolio of operating properties equaling 615,000 square feet in the Midwest segment. For the years ended December 31, 2006 and 2005, respectively, $4.2 million and $4.2 million in impairment related to properties sold or held for sale were included in the caption discontinued operations in the Company’s statements of operations. For the years ended December 31, 2007 and 2005, respectively, $0.2 million and $1.1 million in impairments were included in the caption gain on property dispositions as a component of income from continuing operations. The Company determined these impairments through a comparison of the aggregate future cash flows (including quoted offer prices) to be generated by the properties to the carrying value of the properties. The Company has evaluated each of the properties and land held for development and has determined that there are no additional valuation adjustments necessary at December 31, 2007.

103

LIBERTY PROPERTY LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2007

								Costs
								Capitalized										Date of
								Subsequent		Gross Amount Carried at End of Period						Accumulated		Construction		Depreciable
				Initial Cost				to		Land and		Building and		Total		Depreciation		or		life
Project	Location	Encumbrances		Land		Building		Acquisition		Improvements		Improvements		12/31/2007		12/31/07		Acquisition		(years)
OPERATING PROPERTIES
1501 Perryman Road	Aberdeen, MD		—		5,813,324		18,874,059		4,947,893		5,816,839		23,818,436		29,635,275		687,603		2005	40 yrs.
200 Boulder Drive	Allentown, PA		—		4,722,683		18,922,645		237,680		4,722,683		19,160,325		23,883,008		1,591,301		2004	40 yrs.
2196 Avenue C	Allentown, PA		—		101,159		—		1,347,970		107,307		1,341,822		1,449,129		787,442		1980	40 yrs.
2202 Hanger Place	Allentown, PA		*		137,439		—		1,341,155		138,127		1,340,466		1,478,594		857,669		1981	40 yrs.
250 Boulder Drive	Allentown, PA		—		3,599,936		12,099,145		2,105,137		3,719,772		14,084,446		17,804,218		1,127,923		2004	40 yrs.
400 Nestle Way	Allentown, PA		21,818,177		8,065,500		—		27,420,765		8,184,096		27,302,169		35,486,265		8,070,744		1997	40 yrs.
650 Boulder Drive	Allentown, PA		—		5,208,248				31,404,856		9,961,788		26,651,316		36,613,104		3,404,407		2002	40 yrs.
651 Boulder Drive	Allentown, PA		*		4,308,646		—		13,284,432		4,308,646		13,284,432		17,593,078		2,816,045		2000	40 yrs.
6923 Schantz Spring Road	Allentown, PA		*		1,127,805		3,309,132		348,419		1,127,805		3,657,551		4,785,355		956,536		1993	40 yrs.
700 Nestle Way	Allentown, PA		—		3,473,120		—		19,691,854		4,174,970		18,990,004		23,164,974		4,640,376		1998	40 yrs.
705 Boulder Drive	Allentown, PA		—		4,484,096		—		14,878,034		4,486,836		14,875,294		19,362,130		2,768,023		2001	40 yrs.
7165 Ambassador Drive	Allentown, PA		*		792,999		—		4,533,868		804,848		4,522,019		5,326,867		729,476		2002	40 yrs.
7248 Industrial Boulevard	Allentown, PA		—		2,670,849		13,307,408		1,131,982		2,670,673		14,439,565		17,110,239		4,118,325		1988	40 yrs.
7277 Williams Avenue	Allentown, PA		—		462,964		1,449,009		436,448		463,123		1,885,298		2,348,421		600,790		1989	40 yrs.
7339 Industrial Boulevard	Allentown, PA		*		1,187,776		—		6,971,256		1,197,447		6,961,585		8,159,032		2,205,304		1996	40 yrs.
7355 Williams Avenue	Allentown, PA		—		489,749		1,658,091		314,252		489,749		1,972,343		2,462,092		524,131		1998	40 yrs.
7437 Industrial Boulevard	Allentown, PA		—		717,488		5,022,413		3,000,788		726,651		8,014,038		8,740,688		2,719,883		1976	40 yrs.
7562 Penn Drive	Allentown, PA		—		269,614		844,069		213,047		269,614		1,057,116		1,326,730		290,299		1989	40 yrs.
794 Roble Road	Allentown, PA		—		1,147,541		6,088,041		1,125,815		1,147,541		7,213,857		8,361,398		2,041,246		1985	40 yrs.
8014 Industrial Boulevard	Allentown, PA		—		4,019,258		—		9,506,062		3,645,117		9,880,203		13,525,320		2,656,227		1999	40 yrs.
8150 Industrial Boulevard	Allentown, PA		—		2,564,167				8,906,935		2,571,466		8,899,637		11,471,103		1,670,272		2002	40 yrs.
8250 Industrial Boulevard	Allentown, PA		—		1,025,667				5,346,179		1,035,854		5,335,991		6,371,846		791,768		2002	40 yrs.
8400 Industrial Boulevard	Allentown, PA		—		6,725,948		—		27,138,633		7,534,937		26,329,645		33,864,581		635,282		2005	40 yrs.
2041 Avenue C	Allentown, PA		—		213,599		1,095,217		83,135		213,879		1,178,072		1,391,951		383,386		1990	40 yrs.
2201 Hanger Place	Allentown, PA		—		128,454		—		1,906,472		129,142		1,905,783		2,034,926		1,197,287		1987	40 yrs.
3174 Airport Road	Allentown, PA		—		98,986		—		1,160,754		98,986		1,160,754		1,259,740		753,182		1979	40 yrs.
6330 Hedgewood Drive	Allentown, PA		—		531,268		—		4,920,859		532,047		4,920,080		5,452,127		2,485,843		1988	40 yrs.
6350 Hedgewood Drive	Allentown, PA		*		360,027		—		3,470,090		560,691		3,269,426		3,830,117		1,474,174		1989	40 yrs.
6370 Hedgewood Drive	Allentown, PA		—		540,795		—		3,655,876		541,459		3,655,212		4,196,671		1,524,981		1990	40 yrs.
6390 Hedgewood Drive	Allentown, PA		—		707,203		—		2,765,090		707,867		2,764,425		3,472,293		1,380,990		1990	40 yrs.
6520 Stonegate Drive	Allentown, PA		—		453,315		—		1,787,903		484,361		1,756,857		2,241,218		660,871		1996	40 yrs.
6540 Stonegate Drive	Allentown, PA		—		422,042		—		3,893,307		422,730		3,892,620		4,315,349		1,931,365		1988	40 yrs.
6560 Stonegate Drive	Allentown, PA		—		458,281		—		2,833,097		458,945		2,832,433		3,291,378		1,234,645		1989	40 yrs.
6580 Snowdrift Road	Allentown, PA		—		388,328		—		3,326,007		389,081		3,325,255		3,714,335		1,584,533		1988	40 yrs.
7144 Daniels Drive	Allentown, PA		—		2,390,217		2,342,761		3,725,676		1,579,169		6,879,485		8,458,654		2,020,215		1975	40 yrs.
744 Roble Road	Allentown, PA		—		159,771		1,734,229		271,718		161,371		2,004,347		2,165,718		722,635		1986	40 yrs.
754 Roble Road	Allentown, PA		—		162,115		1,731,885		475,768		163,735		2,206,033		2,369,768		773,334		1986	40 yrs.
7620 Cetronia Road	Allentown, PA		—		1,091,806		3,851,456		357,621		1,093,724		4,207,160		5,300,883		1,464,324		1990	40 yrs.
764 Roble Road	Allentown, PA		—		141,069		—		864,405		141,746		863,728		1,005,474		468,515		1985	40 yrs.
944 Marcon Boulevard	Allentown, PA		—		118,521		1,435,479		505,283		119,711		1,939,572		2,059,283		701,331		1986	40 yrs.
954 Marcon Boulevard	Allentown, PA		—		103,665		—		1,112,063		104,453		1,111,276		1,215,728		613,564		1981	40 yrs.
964 Marcon Boulevard	Allentown, PA		—		138,816		—		2,102,031		139,480		2,101,367		2,240,847		1,029,383		1985	40 yrs.
974 Marcon Boulevard	Allentown, PA		—		143,500		—		2,477,417		144,248		2,476,670		2,620,917		1,370,079		1987	40 yrs.
180,190 Cochrane Drive	Annapolis, MD		—		3,670,256		—		22,676,935		3,752,293		22,594,897		26,347,191		9,618,734		1988	40 yrs.
4606 Richlynn Drive	Belcamp, MD		—		299,600		1,818,861		712,787		299,600		2,531,649		2,831,249		534,038		1985	40 yrs.
1455 Valley Center Parkway	Bethlehem, PA		—		670,290		—		3,747,802		545,172		3,872,920		4,418,092		1,826,544		1997	40 yrs.
1525 Valley Center Parkway	Bethlehem, PA		—		475,686		—		7,741,487		804,104		7,413,069		8,217,173		2,125,924		1999	40 yrs.
1605 Valley Center Parkway	Bethlehem, PA		—		729,751				11,067,222		1,766,196		10,030,777		11,796,973		2,192,489		2000	40 yrs.
1640 Valley Center Parkway	Bethlehem, PA		—		359,000		—		4,306,626		190,728		4,474,898		4,665,626		1,258,606		1996	40 yrs.
1650 Valley Center Parkway	Bethlehem, PA		—		359,000		—		2,219,777		188,896		2,389,881		2,578,777		990,820		1997	40 yrs.
1655 Valley Center Parkway	Bethlehem, PA		—		214,431		—		2,042,407		215,095		2,041,743		2,256,838		989,869		1993	40 yrs.
1660 Valley Center Parkway	Bethlehem, PA		—		359,000		—		2,296,163		188,721		2,466,442		2,655,163		808,118		1998	40 yrs.
3400 High Point Boulevard	Bethlehem, PA		—		298,227		—		3,053,506		662,809		2,688,924		3,351,733		449,303		2002	40 yrs.
3500 High Point Boulevard	Bethlehem, PA		—		289,529		—		4,459,422		916,280		3,832,670		4,748,950		108,988		2006	40 yrs.
74 West Broad Street	Bethlehem, PA		—		1,096,127				13,381,415		1,099,079		13,378,463		14,477,542		3,135,259		2002	40 yrs.
83 South Commerce Way	Bethlehem, PA		—		143,661		888,128		524,120		212,744		1,343,165		1,555,909		557,484		1989	40 yrs.
85 South Commerce Way	Bethlehem, PA		—		236,708		987,949		189,712		237,078		1,177,291		1,414,369		343,450		1989	40 yrs.
87 South Commerce Way	Bethlehem, PA		—		253,886		1,062,881		260,292		253,886		1,323,173		1,577,059		417,846		1989	40 yrs.
89 South Commerce Way	Bethlehem, PA		—		320,000		—		2,021,186		367,706		1,973,481		2,341,186		782,215		1998	40 yrs.
1495 Valley Center Parkway	Bethlehem, PA		—		434,640		—		4,921,517		435,303		4,920,854		5,356,157		1,836,182		1990	40 yrs.
1510 Valley Center Parkway	Bethlehem, PA		—		312,209		—		3,760,466		312,873		3,759,802		4,072,675		1,828,761		1988	40 yrs.
1530 Valley Center Parkway	Bethlehem, PA		—		211,747		—		3,008,631		212,492		3,007,886		3,220,378		1,369,757		1988	40 yrs.
1550 Valley Center Parkway	Bethlehem, PA		—		196,954		—		3,909,749		197,700		3,909,003		4,106,703		1,616,561		1988	40 yrs.
1560 Valley Center Parkway	Bethlehem, PA		—		240,069		—		4,633,235		240,732		4,632,572		4,873,304		2,262,361		1988	40 yrs.
1685 Valley Center Parkway	Bethlehem, PA		—		244,029		—		2,283,325		198,482		2,328,872		2,527,354		934,388		1996	40 yrs.
57 South Commerce Way	Bethlehem, PA		—		390,839		2,701,161		779,354		395,459		3,475,895		3,871,354		1,339,138		1986	40 yrs.
10801 Nesbitt Avenue South	Bloomington, MN		—		784,577				4,105,182		786,382		4,103,377		4,889,759		1,091,348		2001	40 yrs.
5705 Old Shakopee Road	Bloomington, MN		—		2,113,223		—		5,184,252		2,148,571		5,148,905		7,297,475		2,619		2001	40 yrs.
5715 Old Shakopee Road West	Bloomington, MN		—		1,263,226		2,360,782		1,978,204		1,264,758		4,337,454		5,602,213		1,150,920		2002	40 yrs.
5735 Old Shakopee Road West	Bloomington, MN		—		1,263,226		2,360,782		1,086,930		1,264,758		3,446,180		4,710,938		557,577		2002	40 yrs.
5775 West Old Shakopee Road	Bloomington, MN		—		2,052,018		3,849,649		3,308,479		2,060,644		7,149,501		9,210,145		2,777,548		2002	40 yrs.
6161 Green Valley Drive	Bloomington, MN		—		740,378		3,311,602		732,919		741,194		4,043,704		4,784,898		848,178		1992	40 yrs.
6601-6625 W. 78th Street	Bloomington, MN		—		2,263,060		—		38,629,236		2,310,246		38,582,050		40,892,296		8,925,168		1998	40 yrs.

104

LIBERTY PROPERTY LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2007

								Costs
								Capitalized										Date of
								Subsequent		Gross Amount Carried at End of Period						Accumulated		Construction		Depreciable
				Initial Cost				to		Land and		Building and		Total		Depreciation		or		life
Project	Location	Encumbrances		Land		Building		Acquisition		Improvements		Improvements		12/31/2007		12/31/07		Acquisition		(years)
OPERATING PROPERTIES
1701 Clint Moore Boulevard	Boca Raton, FL		—		1,430,884		3,043,553		1,295,979		1,430,937		4,339,480		5,770,416		991,881		1985	40 yrs.
1801 Clint Moore Road	Boca Raton, FL		—		1,065,068		4,481,644		684,192		1,065,068		5,165,837		6,230,905		1,441,672		1986	40 yrs.
777 Yamato Road	Boca Raton, FL		—		4,101,247		16,077,347		5,120,296		4,501,247		20,797,643		25,298,890		5,715,945		1987	40 yrs.
951 Broken Sound Parkway	Boca Raton, FL		—		1,426,251		6,098,952		1,667,358		1,426,251		7,766,310		9,192,561		2,301,086		1986	40 yrs.
400 Boulder Drive	Breinigsville, PA		*		—				13,393,061		2,865,575		10,527,486		13,393,061		892,992		2003	40 yrs.
8201 Industrial Boulevard	Breinigsville, PA		—		2,089,719		—		8,308,557		2,226,432		8,171,844		10,398,276		148,441		2006	40 yrs.
860 Nestle Way	Breinigsville, PA		—		8,118,881		18,885,486		2,210,022		8,118,881		21,095,508		29,214,388		1,262,203		2004	40 yrs.
602 Heron Drive	Bridgeport, NJ		—		524,728		2,240,478		7,650		524,728		2,248,128		2,772,856		547,495		1996	40 yrs.
15800 West Bluemound Road	Brookfield, WI		—		1,289,204		8,128,035		1,696,181		1,306,811		9,806,609		11,113,420		1,711,059		1994	40 yrs.
16620-16650 W Bluemound Road	Brookfield, WI		—		586,665		4,289,907		861,668		586,665		5,151,576		5,738,240		1,182,904		1999	40 yrs.
20700 Swenson Drive	Brookfield, WI		5,953,229		830,008		12,276,445		535,391		830,999		12,810,845		13,641,844		826,905		2005	40 yrs.
20800 Swenson Drive	Brookfield, WI		5,153,464		1,023,466		10,729,219		429,637		1,025,082		11,157,239		12,182,321		874,446		2005	40 yrs.
20825 Swenson Drive	Brookfield, WI		—		644,563		3,640,734		77,808		646,518		3,716,589		4,363,106		244,030		2006	40 yrs.
20935 Swenson Drive	Brookfield, WI		4,571,331		571,389		10,238,547		648,573		572,158		10,886,350		11,458,508		771,812		2005	40 yrs.
20975 Swenson Drive	Brookfield, WI		6,357,511		675,422		8,910,651		926,640		678,637		9,834,076		10,512,713		800,591		2005	40 yrs.
245 Executive Drive	Brookfield, WI		—		577,067		5,197,903		3,967,167		577,067		9,165,070		9,742,137		2,046,418		1984	40 yrs.
1485 W. Commerce Avenue	Carlisle, PA		—		4,249,868		13,886,039		188,648		4,253,027		14,071,528		18,324,555		1,055,694		2004	40 yrs.
3773 Corporate Parkway	Center Valley, PA		—		738,108				7,666,893		794,874		7,610,126		8,405,000		1,855,096		2001	40 yrs.
1309 Executive Boulevard	Cheaspeake, VA		—		926,125				5,086,632		955,374		5,057,383		6,012,757		862,156		2001	40 yrs.
7 Carnegie Plaza	Cherry Hill, NJ		*		2,000,000		3,493,983		3,237,448		2,005,475		6,725,956		8,731,431		878,111		2004	40 yrs.
1301 Executive Boulevard	Chesapeake, VA		—		—		—		5,050,665		997,570		4,053,095		5,050,665		270,460		2005	40 yrs.
1305 Executive Boulevard	Chesapeake, VA		—		861,020				4,891,985		1,129,850		4,623,155		5,753,005		846,963		2002	40 yrs.
1313 Executive Boulevard	Chesapeake, VA		—		1,180,036				4,629,615		1,708,050		4,101,602		5,809,652		665,487		2002	40 yrs.
500 Independence Parkway	Chesapeake, VA		3,490,527		864,150		4,427,285		101,852		866,609		4,526,678		5,393,287		478,978		2004	40 yrs.
501 Independence Parkway	Chesapeake, VA		4,436,051		1,202,556		5,975,538		1,165,292		1,292,273		7,051,113		8,343,386		527,693		2005	40 yrs.
505 Independence Parkway	Chesapeake, VA		5,099,477		1,292,062		6,456,515		1,233,177		1,292,254		7,689,499		8,981,754		631,052		2005	40 yrs.
510 Independence Parkway	Chesapeake, VA		—		2,012,149		7,546,882		392,320		2,014,689		7,936,662		9,951,352		657,791		2005	40 yrs.
700 Independence Parkway	Chesapeake, VA		6,738,723		1,950,375		7,236,994		624,744		1,951,135		7,860,978		9,812,113		928,030		2004	40 yrs.
6230 Old Dobbin Lane	Colombia, MD		—		3,004,075		—		7,645,770		2,746,455		7,903,390		10,649,845		510,321		2004	40 yrs.
5950 Symphony Woods Road	Columbia, MD		—		1,462,762		11,310,187		1,838,307		1,467,623		13,143,634		14,611,256		2,314,163		1986	40 yrs.
6200 Old Dobbin Lane	Columbia, MD		—		958,105				3,736,325		1,295,000		3,399,431		4,694,431		650,345		2002	40 yrs.
6210 Old Dobbin Lane	Columbia, MD		—		958,105				3,923,532		1,307,300		3,574,337		4,881,637		753,776		2002	40 yrs.
6250 Old Dobbin Lane	Columbia, MD		—		958,105				3,681,791		1,295,000		3,344,897		4,639,897		721,932		2002	40 yrs.
6250 Old Dobbin Lane	Columbia, MD		—		958,105				3,791,588		1,599,259		3,150,435		4,749,693		480,916		2000	40 yrs.
7178-80 Columbia Gateway	Columbia, MD		—		1,569,237		4,786,887		2,107,576		1,571,105		6,892,595		8,463,700		2,597,443		1987	40 yrs.
8945-8975 Guilford Road	Columbia, MD		—		2,428,795		7,493,740		1,200,759		2,427,065		8,696,230		11,123,294		2,283,862		1986	40 yrs.
9050 Red Branch Road	Columbia, MD		—		290,950		2,577,153		802,682		290,950		3,379,835		3,670,785		833,392		1972	40 yrs.
9101,9111,9115 Guilford Road	Columbia, MD		—		758,951		—		4,125,174		765,952		4,118,173		4,884,125		2,040,144		1984	40 yrs.
9125,9135,9145 Guilford Road	Columbia, MD		—		900,154		—		6,028,546		920,439		6,008,261		6,928,700		3,622,675		1983	40 yrs.
9755 Patuxent Woods Drive	Columbia, MD		—		3,917,094		16,219,721		1,112,258		3,922,382		17,326,691		21,249,072		710,069		2006	40 yrs.
9770 Patuxent Woods Drive	Columbia, MD		—		341,663		3,033,309		1,320,609		341,663		4,353,918		4,695,581		993,656		1986	40 yrs.
9780 Patuxent Woods Drive	Columbia, MD		—		218,542		1,940,636		411,079		218,542		2,351,715		2,570,256		580,109		1986	40 yrs.
9790 Patuxent Woods Drive	Columbia, MD		—		243,791		2,164,094		257,882		243,791		2,421,976		2,665,767		730,615		1986	40 yrs.
9800 Patuxent Woods Drive	Columbia, MD		—		299,099		2,654,069		531,960		299,099		3,186,029		3,485,129		917,577		1988	40 yrs.
9810 Patuxent Woods Drive	Columbia, MD		—		266,684		2,366,901		791,999		266,684		3,158,900		3,425,584		922,833		1986	40 yrs.
9820 Patuxent Woods Drive	Columbia, MD		—		237,779		2,110,835		789,767		237,779		2,900,602		3,138,381		718,326		1988	40 yrs.
9830 Patuxent Woods Drive	Columbia, MD		—		296,262		2,628,933		254,428		296,262		2,883,361		3,179,624		810,339		1986	40 yrs.
6220 Old Dobbin Lane	Columbis, MD		—		3,865,848		—		7,343,696		3,166,951		8,042,593		11,209,544		53,364		2006	40 yrs.
5150 International Drive	Cudahy, WI		—		739,673		5,108,025		250,327		741,858		5,356,167		6,098,024		587,699		2003	40 yrs.
1250 Hall Court	Deer Park, TX		3,025,882		829,570		4,778,327		47,398		831,611		4,823,685		5,655,296		140,189		2006	40 yrs.
170 Parkway West	Duncan, SC		—		598,348		3,643,756		83,886		598,918		3,727,071		4,325,990		195,036		2006	40 yrs.
190 Parkway West	Duncan, SC		—		551,663		3,463,858		93,187		552,211		3,556,496		4,108,707		210,204		2006	40 yrs.
265 Parkway East	Duncan, SC		—		901,444		5,751,389		18,391		902,374		5,768,850		6,671,224		383,915		2006	40 yrs.
285 Parkway East	Duncan, SC		—		975,433		6,149,465		23,682		976,393		6,172,187		7,148,580		575,543		2006	40 yrs.
3255 Neil Armstrong Boulevard	Eagan, MN		—		1,131,017		—		3,393,423		1,131,017		3,393,423		4,524,441		762,520		1998	40 yrs.
10301-10305 West 70th Street	Eden Prairie, MN		—		120,622		1,085,226		119,591		118,300		1,207,139		1,325,439		332,141		1984	40 yrs.
10321 West 70th Street	Eden Prairie, MN		—		145,198		1,305,700		369,479		142,399		1,677,978		1,820,377		558,826		1984	40 yrs.
10333 West 70th Street	Eden Prairie, MN		—		110,746		995,868		92,008		108,610		1,090,012		1,198,622		315,150		1984	40 yrs.
10349-10357 West 70th Street	Eden Prairie, MN		—		275,903		2,481,666		383,669		270,584		2,870,654		3,141,238		853,964		1985	40 yrs.
10365-10375 West 70th Street	Eden Prairie, MN		—		291,077		2,618,194		289,014		285,464		2,912,821		3,198,284		876,096		1985	40 yrs.
10393-10394 West 70th Street	Eden Prairie, MN		—		269,618		2,423,318		607,121		264,419		3,035,638		3,300,058		882,584		1985	40 yrs.
10400 Viking Drive	Eden Prairie, MN		—		2,912,391		—		22,904,939		2,938,372		22,878,958		25,817,330		6,536,668		1999	40 yrs.
6321-6325 Bury Drive	Eden Prairie, MN		—		462,876		4,151,790		325,250		462,876		4,477,040		4,939,916		1,349,835		1988	40 yrs.
7075 Flying Cloud Drive	Eden Prairie, MN		—		10,232,831		10,855,851		51,817		10,243,977		10,896,522		21,140,499		227,932		2007	40 yrs.
7078 Shady Oak Road	Eden Prairie, MN		—		343,093		3,085,795		1,404,867		336,481		4,497,274		4,833,755		904,873		1985	40 yrs.
7400 Flying Cloud Drive	Eden Prairie, MN		—		195,982		1,762,027		157,281		195,982		1,919,309		2,115,290		490,349		1987	40 yrs.
7615 Smetana Lane	Eden Prairie, MN		—		1,011,517				8,669,553		3,000,555		6,680,516		9,681,071		1,573,069		2001	40 yrs.
7625 Smetana Lane	Eden Prairie, MN		—		4,500,641		—		2,981,957		1,916,609		5,565,990		7,482,599		155,745		2006	40 yrs.
7660-7716 Golden Triangle Drive	Eden Prairie, MN		—		568,706		5,115,177		2,846,759		1,289,215		7,241,427		8,530,642		2,714,856		1988	40 yrs.
7695-7699 Anagram Drive	Eden Prairie, MN		—		760,525		3,254,758		625,146		760,525		3,879,903		4,640,429		1,012,076		1997	40 yrs.
7777 Golden Triangle Drive	Eden Prairie, MN		—		993,101		2,136,862		1,176,757		993,101		3,313,619		4,306,720		673,317		2000	40 yrs.
7800 Equitable Drive	Eden Prairie, MN		—		2,188,525		3,788,762		159,582		2,188,525		3,948,343		6,136,868		1,039,466		1993	40 yrs.
7905 Fuller Road	Eden Prairie, MN		—		1,229,862		4,075,167		1,326,860		1,230,965		5,400,924		6,631,889		1,048,471		1994	40 yrs.

105

LIBERTY PROPERTY LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2007

								Costs
								Capitalized										Date of
								Subsequent		Gross Amount Carried at End of Period						Accumulated		Construction		Depreciable
				Initial Cost				to		Land and		Building and		Total		Depreciation		or		life
Project	Location	Encumbrances		Land		Building		Acquisition		Improvements		Improvements		12/31/2007		12/31/07		Acquisition		(years)
OPERATING PROPERTIES
8855 Columbine Road	Eden Prairie, MN		—		1,400,925				5,226,016		1,599,757		5,027,185		6,626,941		453,254		2000	40 yrs.
8911 Columbine Road (B2)	Eden Prairie, MN		—		916,687				3,608,469		1,718,407		2,806,748		4,525,156		456,132		2000	40 yrs.
8937 Columbine Road	Eden Prairie, MN		—		1,325,829				4,287,274		1,739,966		3,873,137		5,613,103		774,985		2001	40 yrs.
8967 Columbine Road	Eden Prairie, MN		—		1,450,000		—		3,575,107		1,450,000		3,575,107		5,025,107		818,836		2000	40 yrs.
8995 Columbine Road	Eden Prairie, MN		—		1,087,594				3,664,053		2,055,296		2,696,352		4,751,648		512,478		2001	40 yrs.
9023 Columbine Road	Eden Prairie, MN		—		1,956,273		—		4,873,578		1,956,273		4,873,578		6,829,851		1,204,307		1999	40 yrs.
7351 Coca Cola Drive	Elkridge, MD		—		1,897,044		—		6,890,617		3,023,417		5,764,245		8,787,662		11,375		2006	40 yrs.
180 Sheree Boulevard	Exton, PA		5,267,293		2,647,861		11,334,403		1,508,962		2,649,000		12,842,226		15,491,226		409,970		2007	40 yrs.
7028 Snowdrift Road	Fogelville, PA		—		520,473		959,279		292,813		524,390		1,248,175		1,772,565		333,717		1982	40 yrs.
1100 Virginia Drive	Fort Washington, PA		—		22,612,437		—		55,675,633		23,339,943		54,948,127		78,288,069		156,155		2006	40 yrs.
1100 Virginia Drive	Fort Washington, PA		—		13,007,509		11,480,744		53,906		13,035,013		11,507,146		24,542,159		555,696		2006	40 yrs.
1250 Virginia Drive	Fort Washington, PA		—		1,639,166		1,928,574		457,176		1,650,703		2,374,213		4,024,916		135,775		2005	40 yrs.
275 Commerce Drive	Fort Washington, PA		—		1,775,894		2,160,855		7,005,581		1,790,041		9,152,289		10,942,330		—		2005	40 yrs.
414 Commerce Drive	Fort Washington, PA		—		1,267,194		2,217,460		306,336		1,267,937		2,523,052		3,790,989		138,924		2004	40 yrs.
420 Delaware Drive	Fort Washington, PA		—		2,766,931		—		8,286,637		2,826,994		8,226,574		11,053,569		330,138		2005	40 yrs.
106 Southchase Boulevard	Fountain Inn, SC		—		201,944		—		5,133,389		684,003		4,651,330		5,335,333		242,145		2005	40 yrs.
9601 Cosner Drive	Fredericksburg, VA		—		475,262		3,917,234		214,221		475,262		4,131,454		4,606,716		1,284,229		1995	40 yrs.
200 W Cypress Creek Road	Ft Lauderdale, FL		—		3,414,989		2,399,738		10,533,155		3,414,989		12,932,893		16,347,882		1,096,818		2003	40 yrs.
5410 - 5430 Northwest 33rd Avenue	Ft. Lauderdale, FL		—		603,776		4,176,238		1,098,513		625,111		5,253,416		5,878,527		1,471,554		1985	40 yrs.
6500 NW 12th Avenue	Ft. Lauderdale, FL		—		7,099		3,046,309		482,220		—		3,535,627		3,535,627		1,017,122		1989	40 yrs.
6600 NW 12th Avenue	Ft. Lauderdale, FL		—		7,102		3,047,462		624,497		—		3,679,062		3,679,062		1,024,949		1989	40 yrs.
4121 Cox Road	Glen Allen, VA		—		1,083,006		6,035,653		775,551		1,083,006		6,811,204		7,894,210		676,207		2004	40 yrs.
4198 Cox Road	Glen Allen, VA		—		670,292		3,839,245		988,412		670,292		4,827,657		5,497,949		1,469,466		1984	40 yrs.
4510 Cox Road	Glen Allen, VA		—		1,010,024		7,151,729		1,726,041		1,010,044		8,877,750		9,887,794		2,779,789		1990	40 yrs.
4801 Cox Road	Glen Allen, VA		—		1,072,896		—		10,188,699		1,075,620		10,185,975		11,261,595		2,852,130		1998	40 yrs.
4880 Cox Road	Glen Allen, VA		—		743,898		4,499,807		3,173,720		743,898		7,673,527		8,417,425		1,511,058		1995	40 yrs.
5000 Cox Road	Glen Allen, VA		—		770,214		3,685,248		314,712		771,029		3,999,145		4,770,174		1,188,161		1990	40 yrs.
5500 Cox Road	Glen Allen, VA		—		443,485		—		3,518,766		483,263		3,478,988		3,962,251		973,902		1999	40 yrs.
2 Independence Point	Greenville, SC		—		371,600		—		3,292,933		682,881		2,981,651		3,664,533		134,705		2005	40 yrs.
200 Southchase Boulevard	Greenville, SC		—		512,911				6,273,615		515,542		6,270,984		6,786,525		635,369		2003	40 yrs.
4 Independence Pointe	Greenville, SC		—		—				3,652,819		467,438		3,185,382		3,652,819		706,511		2002	40 yrs.
45 Brookfield Oaks Drive	Greenville, SC		—		818,114		—		3,548,409		825,529		3,540,994		4,366,523		34,402		2006	40 yrs.
5 Independence Pointe	Greenville, SC		—		—				3,459,943		467,438		2,992,506		3,459,943		716,077		2002	40 yrs.
6 Independence Pointe	Greenville, SC		—		—		—		3,061,966		545,698		2,516,268		3,061,966		275,180		2003	40 yrs.
7 Research Drive	Greenville, SC		—		—		17,091,882		—		—		17,091,882		17,091,882		266,608		2007	40 yrs.
One Independence Pointe	Greenville, SC		—		780,881		6,199,230		6,509,229		784,617		12,704,723		13,489,340		2,689,700		1982	40 yrs.
1 Enterprise Parkway	Hampton, VA		—		974,675		5,579,869		1,222,782		974,675		6,802,651		7,777,326		1,986,470		1987	40 yrs.
1317 Executive Boulevard	Hampton, VA		—		1,650,423		—		6,423,235		1,128,829		6,944,829		8,073,658		64,319		2006	40 yrs.
21 Enterprise Parkway	Hampton, VA		445,218		263,668		8,167,118		314,618		265,719		8,479,685		8,745,404		1,675,348		1999	40 yrs.
22 Enterprise Parkway	Hampton, VA		—		1,097,368		6,760,778		1,021,564		1,097,368		7,782,342		8,879,710		2,270,977		1990	40 yrs.
5 Manhattan Square	Hampton, VA		—		207,368		—		1,749,035		212,694		1,743,708		1,956,403		486,652		1999	40 yrs.
521 Butler Farm Road	Hampton, VA		—		750,769		2,911,149		257,271		710,486		3,208,702		3,919,188		363,789		2003	40 yrs.
7317 Parkway Drive	Hanover, MD		—		1,104,359		1,959,671		79,319		1,104,359		2,038,990		3,143,349		521,582		1983	40 yrs.
500 McCarthy Drive	Harrisburg, PA		—		5,194,872		19,991,436		4,234,765		5,687,013		23,734,060		29,421,073		2,098,987		2005	40 yrs.
600 Industrial Drive	Harrisburg, PA		—		7,743,800		—		28,300,323		9,368,557		26,675,566		36,044,122		567,610		2005	40 yrs.
4050 Piedmont Parkway	High Point , NC		—		801,902		—		20,004,504		2,042,159		18,764,248		20,806,406		4,527,418		1998	40 yrs.
4170 Mendenhall Oaks Parkway	High Point , NC		—		143,699		—		2,210,943		373,502		1,981,140		2,354,642		599,491		1999	40 yrs.
4180 Mendenhall Oaks Parkway	High Point , NC		—		121,329		—		1,835,505		315,614		1,641,220		1,956,834		548,282		1999	40 yrs.
1400 Mendenhall Oaks Parkway	High Point, NC		—		172,320				7,112,571		984,672		6,300,219		7,284,891		1,246,828		2002	40 yrs.
1498 Eagle Hill Drive	High Point, NC		—		94,274		—		5,702,221		791,880		5,004,614		5,796,494		79,836		2005	40 yrs.
2427 Penny Road	High Point, NC		—		1,165,664		—		3,467,001		655,240		3,977,424		4,632,665		1,692,315		1990	40 yrs.
400 Mendenhall Oaks Parkway	High Point, NC		—		—		—		1,860,199		665,239		1,194,960		1,860,199		47,894		2004	40 yrs.
4000 Piedmont Parkway	High Point, NC		—		592,885		4,825,615		906,054		597,368		5,727,186		6,324,555		1,922,944		1989	40 yrs.
4015 Meeting Way	High Point, NC		—		510,000		—		2,787,760		511,869		2,785,890		3,297,759		219,904		2003	40 yrs.
4020 Meeting Way	High Point, NC		—		94,232				1,682,549		378,101		1,398,680		1,776,781		345,896		2001	40 yrs.
4135 Mendenall Oaks Parkway	High Point, NC		—		499,500		—		3,498,774		500,980		3,497,293		3,998,274		694,206		2000	40 yrs.
4160 Mendenhall Oaks Parkway	High Point, NC		—		285,882		—		3,332,553		545,627		3,072,808		3,618,435		862,011		1998	40 yrs.
4183 Eagle Hill Drive	High Point, NC		—		122,203				3,881,793		526,266		3,477,730		4,003,996		1,273,230		2001	40 yrs.
4189 Eagle Hill Drive	High Point, NC		—		100,106				3,430,006		431,106		3,099,006		3,530,112		810,388		2001	40 yrs.
4191 Mendenhall Oaks Parkway	High Point, NC		—		217,943				3,114,774		611,166		2,721,550		3,332,716		514,048		2002	40 yrs.
4194 Mendenhall Oaks Parkway	High Point, NC		—		102,372		—		2,597,683		265,991		2,434,064		2,700,055		738,898		1999	40 yrs.
4195 Eagle Hill Drive	High Point, NC		—		107,586		—		3,349,592		505,700		2,951,478		3,457,178		211,243		2004	40 yrs.
4196 Mendenhall Oaks Parkway	High Point, NC		—		66,731		—		2,253,083		173,889		2,145,925		2,319,814		776,035		1999	40 yrs.
4300 Federal Drive	High Point, NC		—		264,038		—		2,090,460		276,038		2,078,460		2,354,498		419,899		1998	40 yrs.
4328, 4336 Federal Drive	High Point, NC		4,272,471		521,122		—		7,238,387		825,092		6,934,416		7,759,509		3,611,506		1995	40 yrs.
4344 Federal Drive	High Point, NC		—		484,001		—		2,780,946		173,623		3,091,325		3,264,948		1,128,727		1996	40 yrs.
4380 Federal Drive	High Point, NC		—		282,996		—		2,204,882		283,368		2,204,510		2,487,878		794,430		1997	40 yrs.
4388 Federal Drive	High Point, NC		—		143,661		—		1,210,692		132,655		1,221,699		1,354,353		464,620		1997	40 yrs.
4500 Green Point Drive	High Point, NC		—		230,622		—		2,308,319		231,692		2,307,249		2,538,941		1,153,111		1989	40 yrs.
4501 Green Point Drive	High Point, NC		—		319,289		—		2,607,625		320,450		2,606,465		2,926,914		1,232,211		1989	40 yrs.
4523 Green Point Drive	High Point, NC		—		234,564		—		2,704,781		235,698		2,703,647		2,939,345		1,133,110		1988	40 yrs.
4524 Green Point Drive	High Point, NC		—		182,810		—		2,361,828		183,888		2,360,749		2,544,638		1,117,064		1989	40 yrs.
1 Walnut Grove Drive	Horsham, PA		—		1,058,901		5,343,606		1,041,557		1,058,901		6,385,163		7,444,064		2,202,363		1986	40 yrs.

106

LIBERTY PROPERTY LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2007

								Costs
								Capitalized										Date of
								Subsequent		Gross Amount Carried at End of Period						Accumulated		Construction		Depreciable
				Initial Cost				to		Land and		Building and		Total		Depreciation		or		life
Project	Location	Encumbrances		Land		Building		Acquisition		Improvements		Improvements		12/31/2007		12/31/07		Acquisition		(years)
OPERATING PROPERTIES
100 Gibraltar Road	Horsham, PA		—		38,729		349,811		9,589		38,729		359,400		398,129		90,395		1975	40 yrs.
100 Witmer Road	Horsham, PA		5,168,589		3,102,784		—		12,134,349		3,764,784		11,472,350		15,237,133		3,164,372		1996	40 yrs.
100-107 Lakeside Drive	Horsham, PA		—		239,528		2,163,498		673,861		255,528		2,821,359		3,076,887		910,465		1982	40 yrs.
101 Gibraltar Road	Horsham, PA		—		651,990		5,888,989		1,445,256		732,552		7,253,683		7,986,235		2,020,530		1977	40 yrs.
101-111 Rock Road	Horsham, PA		—		350,561		3,166,389		640,212		452,251		3,704,911		4,157,162		1,060,904		1975	40 yrs.
102 Rock Road	Horsham, PA		—		1,110,209		2,301,302		1,133,191		1,114,985		3,429,717		4,544,702		568,678		1985	40 yrs.
103-109 Gibraltar Road	Horsham, PA		—		270,906		2,448,500		803,059		270,906		3,251,558		3,522,465		1,158,159		1978	40 yrs.
104 Rock Road	Horsham, PA		—		330,111		2,981,669		209,604		330,111		3,191,273		3,521,384		824,709		1974	40 yrs.
104 Witmer Road	Horsham, PA		*		1,248,148		—		1,137,753		189,793		2,196,108		2,385,901		833,657		1975	40 yrs.
110 Gibraltar Road	Horsham, PA		—		673,041		5,776,369		2,364,036		673,041		8,140,405		8,813,446		2,228,932		1979	40 yrs.
111-159 Gibraltar Road	Horsham, PA		—		489,032		4,126,151		1,171,671		489,032		5,297,822		5,786,854		1,463,329		1981	40 yrs.
113-123 Rock Road	Horsham, PA		—		351,072		3,171,001		592,177		451,731		3,662,519		4,114,250		914,341		1975	40 yrs.
120 Gibraltar Road	Horsham, PA		—		533,142		4,830,515		2,210,194		558,142		7,015,709		7,573,851		1,605,641		1980	40 yrs.
123-135 Rock Road	Horsham, PA		—		292,360		2,411,677		880,183		393,019		3,191,201		3,584,220		1,042,075		1975	40 yrs.
132 Welsh Road	Horsham, PA		—		1,333,642		—		4,406,888		1,408,041		4,332,488		5,740,529		1,467,255		1998	40 yrs.
161-175 Gibraltar Road	Horsham, PA		—		294,673		2,663,722		987,299		294,673		3,651,020		3,945,694		981,289		1976	40 yrs.
181-187 Gibraltar Road	Horsham, PA		—		360,549		3,259,984		787,154		360,549		4,047,138		4,407,687		1,224,290		1982	40 yrs.
2 Walnut Grove Drive	Horsham, PA		—		1,281,870		7,767,374		1,829,877		1,265,363		9,613,758		10,879,121		3,078,839		1989	40 yrs.
200 Gibraltar Road	Horsham, PA		—		638,513		5,811,323		1,894,468		638,513		7,705,790		8,344,304		2,488,569		1990	40 yrs.
200-264 Lakeside Drive	Horsham, PA		—		502,705		4,540,597		928,316		502,705		5,468,913		5,971,618		1,647,169		1982	40 yrs.
201 Gibraltar Road	Horsham, PA		—		380,127		3,433,433		1,997,494		380,802		5,430,252		5,811,054		1,456,222		1983	40 yrs.
210-223 Witmer Road	Horsham, PA		—		270,282		2,441,276		1,929,282		270,282		4,370,558		4,640,840		1,111,988		1972	40 yrs.
220 Gibraltar Road	Horsham, PA		—		629,944		5,733,228		1,307,530		629,944		7,040,758		7,670,702		2,440,862		1990	40 yrs.
231-237 Gibraltar Road	Horsham, PA		*		436,952		3,948,963		736,123		436,952		4,685,086		5,122,038		1,336,135		1981	40 yrs.
240 Gibraltar Road	Horsham, PA		—		629,944		5,733,234		1,757,008		629,944		7,490,243		8,120,186		2,648,515		1990	40 yrs.
255 Business Center Drive	Horsham, PA		—		1,154,289		2,007,214		541,080		1,140,597		2,561,985		3,702,582		296,851		2003	40 yrs.
261-283 Gibraltar Road	Horsham, PA		*		464,871		3,951,972		829,558		464,871		4,781,530		5,246,401		1,049,039		1978	40 yrs.
300 Welsh Road	Horsham, PA		—		696,061		3,339,991		570,429		696,061		3,910,420		4,606,480		990,440		1985	40 yrs.
300 Welsh Road — Building 3	Horsham, PA		—		180,459		1,441,473		375,923		180,459		1,817,396		1,997,855		618,169		1983	40 yrs.
300 Welsh Road — Building 4	Horsham, PA		—		282,493		2,256,508		1,418,790		282,493		3,675,298		3,957,791		1,225,002		1983	40 yrs.
300-309 Lakeside Drive	Horsham, PA		—		369,475		3,338,761		1,841,434		376,475		5,173,195		5,549,670		1,820,269		1982	40 yrs.
335 Commerce Drive	Horsham, PA		—		—		—		8,754,421		182,400		8,572,022		8,754,421		767,210		2002	40 yrs.
355 Business Center Drive	Horsham, PA		—		483,045		898,798		252,036		471,171		1,162,708		1,633,879		186,417		2003	40 yrs.
4 Walnut Grove	Horsham, PA		*		2,515,115		—		7,379,933		2,515,115		7,379,933		9,895,049		1,589,204		1999	40 yrs.
400-445 Lakeside Drive	Horsham, PA		—		543,628		4,910,226		2,760,384		583,628		7,630,610		8,214,238		2,267,628		1981	40 yrs.
455 Business Center Drive	Horsham, PA		—		1,351,011		2,503,449		1,892,811		1,322,317		4,424,954		5,747,271		783,460		2003	40 yrs.
5 Walnut Grove Drive	Horsham, PA		—		1,065,951		—		9,910,030		1,939,712		9,036,269		10,975,981		1,994,511		2000	40 yrs.
506 Prudential Road	Horsham, PA		—		208,140		895,470		652,633		208,140		1,548,102		1,756,243		397,359		1973	40 yrs.
555 Business Center Drive	Horsham, PA		—		727,420		1,353,650		181,096		709,967		1,552,200		2,262,167		297,092		2003	40 yrs.
680 Blair Mill Road	Horsham, PA		—		3,527,151				12,160,383		4,138,577		11,548,957		15,687,534		2,839,043		2001	40 yrs.
7 Walnut Grove Drive	Horsham, PA		—		2,631,696		—		18,304,278		2,631,956		18,304,018		20,935,974		145,951		2006	40 yrs.
700 Dresher Road	Horsham, PA		—		2,551,777		3,020,638		4,668,770		2,565,140		7,676,045		10,241,185		3,469,256		1987	40 yrs.
719 Dresher Road	Horsham, PA		*		493,426		2,812,067		251,335		495,112		3,061,716		3,556,828		755,442		1987	40 yrs.
507 Prudential Road	Horsham, PA		—		644,900		5,804,100		8,818,780		1,131,380		14,136,400		15,267,780		4,162,995		1988	40 yrs.
747 Dresher Road	Horsham, PA		—		1,607,238		—		5,139,699		1,607,977		5,138,960		6,746,937		2,428,966		1988	40 yrs.
767 Electronic Drive	Horsham, PA		*		1,229,685		—		3,442,013		1,241,970		3,429,728		4,671,697		1,593,901		1996	40 yrs.
10735 West Little York Road	Houston, TX		—		1,110,988		6,351,946		1,676,410		1,135,483		8,003,861		9,139,344		934,064		2000	40 yrs.
10739 West Little York Road	Houston, TX		—		797,931		5,950,894		242,625		799,560		6,191,890		6,991,450		960,100		1999	40 yrs.
11201 Greens Crossing Boulevard	Houston, TX		—		1,006,194		5,412,584		770,438		1,008,542		6,180,674		7,189,215		—		2007	40 yrs.
16405 Air Center Boulevard	Houston, TX		—		438,853		3,030,396		430,422		438,853		3,460,818		3,899,671		944,891		1997	40 yrs.
16445 Air Center Boulevard	Houston, TX		—		363,339		2,509,186		618,845		363,339		3,128,031		3,491,370		1,073,194		1997	40 yrs.
1646 Rankin Road	Houston, TX		—		329,961		—		4,895,914		592,234		4,633,640		5,225,874		182,817		2005	40 yrs.
16580 Air Center Boulevard	Houston, TX		—		289,000		3,559,857		269,417		289,000		3,829,274		4,118,275		952,367		1997	40 yrs.
16602 Central Green Boulevard	Houston, TX		—		284,403		—		4,496,262		503,779		4,276,886		4,780,665		252,986		2005	40 yrs.
16605 Air Center Boulevard	Houston, TX		—		298,999				3,770,315		496,186		3,573,128		4,069,314		915,831		2002	40 yrs.
16685 Air Center Boulevard	Houston, TX		—		—		—		2,935,268		414,691		2,520,577		2,935,268		261,429		2004	40 yrs.
1755 Trans Central Drive	Houston, TX		—		293,534		3,036,269		190,651		306,147		3,214,306		3,520,453		668,580		1999	40 yrs.
5200 N. Sam Houston Parkway	Houston, TX		—		1,519,458		7,135,548		1,170,936		1,520,074		8,305,868		9,825,942		—		2007	40 yrs.
5250 N. Sam Houston Parkway	Houston, TX		—		2,173,287		8,868,256		1,116,010		2,173,942		9,983,611		12,157,553		—		2007	40 yrs.
850 Greens Parkway	Houston, TX		—		2,893,405		11,593,197		1,708,393		2,899,861		13,295,133		16,194,994		—		2007	40 yrs.
860 Greens Parkway	Houston, TX		—		1,399,365		6,344,650		997,635		1,374,012		7,367,639		8,741,650		—		2007	40 yrs.
8801-19 & 8821-49 Fallbrook Drive	Houston, TX		—		2,290,001		15,297,141		1,590,836		2,290,002		16,887,976		19,177,978		2,022,295		2000	40 yrs.
8802-8824 Fallbrook Drive	Houston, TX		—		1,114,406		6,364,767		663,613		1,114,433		7,028,353		8,142,786		840,089		2004	40 yrs.
8825-8839 N Sam Houston Pkwy	Houston, TX		—		638,453		3,258,815		565,274		638,477		3,824,064		4,462,542		362,142		2004	40 yrs.
8850-8872 Fallbrook Drive	Houston, TX		—		504,317		2,878,351		1,014,679		504,341		3,893,006		4,397,347		395,260		2004	40 yrs.
10 North Park Drive	Hunt Valley, MD		—		2,211,969		7,816,042		234,730		2,211,969		8,050,771		10,262,741		847,619		2003	40 yrs.
20 Wright Avenue	Hunt Valley, MD		—		1,205,946		—		9,631,918		1,861,025		8,976,839		10,837,864		1,708,149		2001	40 yrs.
307 International Circle	Hunt Valley, MD		—		3,538,319		14,190,832		12,949,813		3,542,881		27,136,083		30,678,964		1,680,609		2004	40 yrs.
309 International Circle	Hunt Valley, MD		—		613,667		2,458,204		651,283		615,096		3,108,057		3,723,154		210,540		2004	40 yrs.
311 International Circle	Hunt Valley, MD		—		313,365		1,281,093		76,922		314,572		1,356,808		1,671,381		71,468		2004	40 yrs.
4 North Park Drive	Hunt Valley, MD		—		3,269,948		13,551,370		545,606		3,269,948		14,096,976		17,366,924		1,773,089		2003	40 yrs.
6 North Park Drive	Hunt Valley, MD		—		2,077,949		8,770,566		981,110		2,077,949		9,751,676		11,829,625		1,325,458		2003	40 yrs.
10245 Centurion Parkway North	Jacksonville, FL		—		852,644		3,510,889		967,927		853,704		4,477,755		5,331,460		1,152,505		1996	40 yrs.

107

LIBERTY PROPERTY LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2007

								Costs
								Capitalized											Date of
								Subsequent			Gross Amount Carried at End of Period						Accumulated		Construction		Depreciable
				Initial Cost				to			Land and		Building and		Total		Depreciation		or		life
Project	Location	Encumbrances		Land		Building		Acquisition			Improvements		Improvements		12/31/2007		12/31/07		Acquisition		(years)
OPERATING PROPERTIES
11777 Central Highway	Jacksonville, FL		—		92,207		429,997		1,275,050			140,426		1,656,828		1,797,254		1,088,524		1985	40 yrs.
4190 Belfort Road	Jacksonville, FL		—		821,000		5,866,000		3,319,759			827,420		9,179,339		10,006,759		4,235,466		1986	40 yrs.
4345 Southpoint Parkway	Jacksonville, FL		—		—		—		8,791,159			418,093		8,373,065		8,791,159		2,559,557		1998	40 yrs.
4801 Executive Park Court - 100	Jacksonville, FL		—		554,993		2,993,277		1,321,576			554,542		4,315,303		4,869,846		1,507,461		1990	40 yrs.
4801 Executive Park Court - 200	Jacksonville, FL		—		370,017		1,995,518		367,780			370,039		2,363,276		2,733,315		678,769		1990	40 yrs.
4810 Executive Park Court	Jacksonville, FL		—		369,694		3,045,639		937,609			370,039		3,982,903		4,352,942		1,059,805		1990	40 yrs.
4815 Executive Park Court - 100	Jacksonville, FL		—		366,317		1,975,393		409,677			366,339		2,385,048		2,751,387		793,562		1995	40 yrs.
4815 Executive Park Court - 200	Jacksonville, FL		—		462,522		2,494,397		457,548			462,549		2,951,918		3,414,467		965,374		1995	40 yrs.
4820 Executive Park Court	Jacksonville, FL		—		555,173		2,693,130		777,348			555,213		3,470,439		4,025,651		1,007,193		1997	40 yrs.
4825 Executive Park Court	Jacksonville, FL		—		601,278		3,242,491		282,810			601,401		3,525,178		4,126,579		1,076,657		1996	40 yrs.
4887 Belfort Road	Jacksonville, FL		—		1,299,202				7,916,788			1,665,915		7,550,074		9,215,989		1,728,371		2002	40 yrs.
4899 Belfort Road	Jacksonville, FL		—		1,299,201		—		8,325,889			1,207,751		8,417,339		9,625,090		2,064,295		2000	40 yrs.
4901 Belfort Road	Jacksonville, FL		—		877,964		2,360,742		2,899,717			877,964		5,260,459		6,138,423		1,886,142		1986	40 yrs.
4905 Belfort Street	Jacksonville, FL		—		638,154		—		3,465,151			641,272		3,462,033		4,103,305		992,077		2000	40 yrs.
5201 Gate Parkway	Jacksonville, FL		—		3,836,532		—		21,414,727			4,269,346		20,981,913		25,251,260		1,229,452		2005	40 yrs.
6600 Southpoint Parkway	Jacksonville, FL		—		998,432		4,055,727		828,152			1,002,704		4,879,607		5,882,311		1,599,460		1986	40 yrs.
6601 Executive Park Circle North	Jacksonville, FL		—		551,250		3,128,361		106,408			551,250		3,234,768		3,786,018		782,910		1992	40 yrs.
6602 Executive Park Court - 100	Jacksonville, FL		—		388,519		2,095,293		299,475			388,541		2,394,745		2,783,287		707,625		1993	40 yrs.
6602 Executive Park Court - 200	Jacksonville, FL		—		296,014		1,596,347		437,796			296,032		2,034,126		2,330,157		583,710		1993	40 yrs.
6620 Southpoint Drive	Jacksonville, FL		—		614,602		4,267,477		1,001,006			614,602		5,268,482		5,883,085		1,698,587		1984	40 yrs.
6631 Executive Park Court - 100	Jacksonville, FL		—		251,613		1,356,849		482,785			251,627		1,839,620		2,091,247		711,295		1994	40 yrs.
6631 Executive Park Court - 200	Jacksonville, FL		—		406,561		2,195,070		272,425			407,043		2,467,013		2,874,056		748,398		1994	40 yrs.
6700 Southpoint Parkway	Jacksonville, FL		—		620,719		2,989,746		750,311			624,215		3,736,561		4,360,776		1,443,345		1987	40 yrs.
7014 AC Skinner Parkway	Jacksonville, FL		—		574,198		—		3,568,668			780,486		3,362,380		4,142,866		1,268,559		1999	40 yrs.
7016 AC Skinner Parkway	Jacksonville, FL		—		597,181		—		2,373,250			602,633		2,367,799		2,970,431		1,091,943		1996	40 yrs.
7018 AC Skinner Parkway	Jacksonville, FL		—		840,996		—		4,669,430			846,461		4,663,965		5,510,426		2,049,068		1997	40 yrs.
7020 AC Skinner Parkway	Jacksonville, FL		—		398,257		—		2,775,001			749,811		2,423,448		3,173,258		1,099,538		1996	40 yrs.
7022 AC Skinner Parkway	Jacksonville, FL		—		706,934		—		3,572,340			853,981		3,425,294		4,279,274		1,416,112		1996	40 yrs.
7077 Bonneval Road	Jacksonville, FL		—		768,000		5,789,000		3,434,464			774,020		9,217,444		9,991,464		3,743,688		1988	40 yrs.
7251 Salisbury Road	Jacksonville, FL		—		—		—		3,567,820			662,559		2,905,261		3,567,820		819,896		2000	40 yrs.
7255 Salisbury Road	Jacksonville, FL		—		392,060				2,975,677			680,766		2,686,971		3,367,737		595,294		2002	40 yrs.
7970 Bayberry Road	Jacksonville, FL		—		127,520		—		1,366,849			129,979		1,364,391		1,494,369		1,061,963		1978	40 yrs.
7980 Bayberry Road	Jacksonville, FL		—		330,726		1,338,101		17,776			330,726		1,355,877		1,686,603		366,188		1978	40 yrs.
8665,8667,8669 Baypine Road	Jacksonville, FL		—		966,552		—		5,882,947			974,959		5,874,540		6,849,499		2,827,413		1987	40 yrs.
8775 Baypine Road	Jacksonville, FL		—		906,804		—		9,967,357			913,013		9,961,148		10,874,161		1,807,389		1989	40 yrs.
151 South Warner Road	King of Prussia, PA		—		1,218,086		6,937,866		280,315			1,186,972		7,249,295		8,436,267		2,047,040		1980	40 yrs.
2100 Renaissance Boulevard	King of Prussia, PA		—		1,110,111		—		9,339,057			1,132,519		9,316,649		10,449,169		2,815,873		1999	40 yrs.
2201 Renaissance Boulevard	King of Prussia, PA		—		—		—		15,578,624			2,413,514		13,165,110		15,578,624		3,555,287		2000	40 yrs.
2300 Renaissance Boulevard	King of Prussia, PA		—		509,580		—		3,042,297			574,152		2,977,725		3,551,877		861,386		1999	40 yrs.
2301 Renaissance Boulevard	King of Prussia, PA		—		1,645,246		—		30,063,879			4,581,649		27,127,475		31,709,124		5,061,184		2002	40 yrs.
2500 Renaissance Boulevard	King of Prussia, PA		—		509,580		—		2,877,654			592,886		2,794,347		3,387,234		1,017,641		1999	40 yrs.
2520 Renaissance Boulevard	King of Prussia, PA		—		1,020,000		—		5,005,045			978,402		5,046,643		6,025,045		2,011,014		1999	40 yrs.
2540 Renaissance Boulevard	King of Prussia, PA		—		—		—		1,625,497			274,341		1,351,156		1,625,497		397,414		2000	40 yrs.
2560 Renaissance Boulevard	King of Prussia, PA		—		—		—		3,729,254			649,792		3,079,462		3,729,254		870,817		2000	40 yrs.
2700 Horizon Drive	King of Prussia, PA		—		764,370		—		3,682,628			867,815		3,579,183		4,446,998		1,262,969		1998	40 yrs.
2900 Horizon Drive	King of Prussia, PA		—		679,440		—		3,503,074			774,096		3,408,418		4,182,514		1,003,808		1998	40 yrs.
3200 Horizon Drive	King of Prussia, PA		—		928,637		—		7,045,235			1,210,137		6,763,734		7,973,871		2,642,202		1996	40 yrs.
3400 Horizon Drive	King of Prussia, PA		—		776,496		3,139,068		1,277,980			776,496		4,417,048		5,193,544		1,210,636		1995	40 yrs.
3600 Horizon Drive	King of Prussia, PA		—		236,432		1,856,252		735,267			236,432		2,591,519		2,827,950		621,673		1989	40 yrs.
3602 Horizon Drive	King of Prussia, PA		—		217,734		1,759,489		338,288			217,809		2,097,701		2,315,510		611,029		1989	40 yrs.
3604 Horizon Drive	King of Prussia, PA		—		397,178		—		1,628,512			350,874		1,674,816		2,025,690		719,391		1998	40 yrs.
3606 Horizon Drive	King of Prussia, PA		—		789,409		—		1,940,816			815,855		1,914,370		2,730,225		830,564		1997	40 yrs.
440 East Swedesford Road	King of Prussia, PA		—		717,001		4,816,121		2,782,658			717,001		7,598,780		8,315,780		2,974,117		1988	40 yrs.
460 East Swedesford Road	King of Prussia, PA		—		705,317		4,737,487		4,033,879			705,317		8,771,367		9,476,683		2,146,214		1988	40 yrs.
650 Swedesford Road	King of Prussia, PA		—		952,911		6,722,830		9,553,119			952,911		16,275,948		17,228,859		6,443,680		1971	40 yrs.
680 Swedesford Road	King of Prussia, PA		—		952,361		6,722,830		8,367,206			952,361		15,090,036		16,042,397		6,125,567		1971	40 yrs.
170 South Warner Road	King of Prussia, PA		—		547,800		3,137,400		3,998,873			458,232		7,225,841		7,684,073		3,247,927		1980	40 yrs.
190 South Warner Road	King of Prussia, PA		—		552,200		3,162,600		1,646,925			461,909		4,899,816		5,361,725		2,328,044		1980	40 yrs.
3000 Horizon Drive	King of Prussia, PA		—		1,191,449		—		2,309,358			946,703		2,554,103		3,500,806		624,001		1997	40 yrs.
3100 Horizon Drive	King of Prussia, PA		—		601,956		—		2,068,047			611,436		2,058,568		2,670,003		796,533		1995	40 yrs.
3500 Horizon Drive	King of Prussia, PA		—		1,204,839		—		2,630,229			1,223,875		2,611,193		3,835,068		761,849		1996	40 yrs.
11425 State Highway 225	LaPorte, TX		—		975,974		3,409,036		8,956			977,542		3,416,424		4,393,966		153,025		2006	40 yrs.
11503 State Highway 225	LaPorte, TX		—		2,561,931		9,779,023		22,961			2,566,047		9,797,868		12,363,915		349,382		2006	40 yrs.
7528 Walker Way	Lehigh Valley, PA		—		893,441		—		5,514,510			779,330		5,628,622		6,407,952		369,596		2004	40 yrs.
8301 Industrial Boulevard	Lehigh, PA		—		11,249,550		—		44,289,683			11,254,716		44,284,517		55,539,233		2,424,466		2005	40 yrs.
1201 East Whitcomb Avenue	Madison Heights, MI		—		302,567		1,213,232		(167,324	)		302,567		1,045,908		1,348,475		302,059		1980	40 yrs.
31700 Research Park Drive	Madison Heights, MI		—		373,202		1,824,721		(157,588	)		373,203		1,667,132		2,040,335		428,692		1988	40 yrs.
31811 Sherman Avenue	Madison Heights, MI		—		207,599		1,179,010		(129,901	)		207,599		1,049,109		1,256,708		285,295		1983	40 yrs.
1901 Summit Tower Boulevard	Maitland, FL		—		6,078,791		12,348,567		1,672,377			6,083,206		14,016,530		20,099,736		3,235,464		1998	40 yrs.
1 Country View Road	Malvern, PA		—		400,000		3,600,000		1,004,647			406,421		4,598,226		5,004,647		1,603,681		1982	40 yrs.
1 Great Valley Parkway	Malvern, PA		—		419,460		3,792,570		330,704			419,460		4,123,273		4,542,734		1,167,180		1982	40 yrs.
10 Great Valley Parkway	Malvern, PA		—		823,540		1,341,376		290,237			832,244		1,622,908		2,455,152		191,633		2003	40 yrs.
100 Chesterfield Parkway	Malvern, PA		—		1,320,625		—		6,708,774			1,450,534		6,578,865		8,029,399		2,515,682		1998	40 yrs.

108

LIBERTY PROPERTY LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2007

								Costs
								Capitalized										Date of
								Subsequent		Gross Amount Carried at End of Period						Accumulated		Construction		Depreciable
				Initial Cost				to		Land and		Building and		Total		Depreciation		or		life
Project	Location	Encumbrances		Land		Building		Acquisition		Improvements		Improvements		12/31/2007		12/31/07		Acquisition		(years)
OPERATING PROPERTIES
1001 Cedar Hollow Road	Malvern, PA		—		1,436,814		—		16,077,184		1,676,470		15,837,528		17,513,998		5,562,516		1998	40 yrs.
11 Great Valley Parkway	Malvern, PA		—		496,297		—		3,226,924		708,331		3,014,890		3,723,221		741,324		2001	40 yrs.
11,15 Great Valley Parkway	Malvern, PA		*		1,837,050		—		15,005,064		1,837,878		15,004,237		16,842,114		10,164,683		1986	40 yrs.
18 Great Valley Parkway	Malvern, PA		—		394,036		3,976,221		99,539		397,293		4,072,504		4,469,796		928,009		1980	40 yrs.
2 West Liberty Boulevard	Malvern, PA		—		5,405,041		—		11,329,711		5,405,042		11,329,711		16,734,753		802,169		2003	40 yrs.
200 Chesterfield Parkway	Malvern, PA		—		495,893		2,739,093		600,377		588,123		3,247,240		3,835,363		2,004,532		1989	40 yrs.
27-43 Great Valley Parkway	Malvern, PA		—		448,775		—		2,545,542		449,447		2,544,870		2,994,317		1,617,224		1977	40 yrs.
3 Country View Road	Malvern, PA		*		814,278		—		4,946,433		1,128,881		4,631,830		5,760,711		1,126,106		1998	40 yrs.
375 Technology Drive	Malvern, PA		—		191,114		—		1,961,140		234,922		1,917,331		2,152,254		761,972		1998	40 yrs.
40 Liberty Boulevard	Malvern, PA		—		4,241,137		17,737,090		2,182,842		4,241,167		19,919,901		24,161,068		5,756,934		1989	40 yrs.
425 Technology Drive	Malvern, PA		—		191,114		—		2,112,927		321,473		1,982,568		2,304,041		772,261		1998	40 yrs.
45 Liberty Boulevard	Malvern, PA		—		4,380,221		—		15,314,868		4,749,748		14,945,341		19,695,089		5,007,849		1999	40 yrs.
45-67 Great Valley Parkway	Malvern, PA		—		795,143		—		3,388,579		795,831		3,387,891		4,183,722		2,268,978		1974	40 yrs.
5 Great Valley Parkway	Malvern, PA		—		684,200		6,181,661		1,366,504		684,200		7,548,165		8,232,365		2,112,094		1983	40 yrs.
50 Morehall Road	Malvern, PA		—		849,576		—		13,043,717		1,337,076		12,556,217		13,893,293		4,795,872		1997	40 yrs.
600 Chesterfield Parkway	Malvern, PA		—		2,013,750		—		8,255,128		2,170,359		8,098,519		10,268,878		2,668,623		1999	40 yrs.
700 Chesterfield Parkway	Malvern, PA		—		2,013,750		—		8,215,954		2,157,617		8,072,087		10,229,704		2,641,192		1999	40 yrs.
10 Valley Stream Parkway	Malvern, PA		*		509,075		—		3,142,498		509,899		3,141,674		3,651,573		1,797,109		1984	40 yrs.
10, 20 Liberty Boulevard	Malvern, PA		—		724,058		—		5,760,414		724,846		5,759,626		6,484,472		2,659,056		1985	40 yrs.
12,14,16 Great Valley Parkway	Malvern, PA		—		130,689		—		1,560,924		128,767		1,562,846		1,691,613		947,476		1982	40 yrs.
14 Lee Boulevard	Malvern, PA		—		664,282		—		6,022,257		643,892		6,042,647		6,686,539		2,889,745		1988	40 yrs.
155 Great Valley Parkway	Malvern, PA		—		625,147		—		2,627,280		626,068		2,626,359		3,252,427		1,612,026		1981	40 yrs.
20 Valley Stream Parkway	Malvern, PA		—		465,539		—		5,710,974		466,413		5,710,099		6,176,513		3,109,162		1987	40 yrs.
205 Great Valley Parkway	Malvern, PA		—		1,368,259		—		10,971,028		1,369,003		10,970,284		12,339,287		6,993,606		1981	40 yrs.
256 Great Valley Parkway	Malvern, PA		—		161,098		—		1,785,717		161,949		1,784,866		1,946,815		1,199,487		1980	40 yrs.
257-275 Great Valley Parkway	Malvern, PA		—		504,611		—		5,173,127		505,458		5,172,280		5,677,738		3,167,414		1983	40 yrs.
277-293 Great Valley Parkway	Malvern, PA		—		530,729		—		2,331,543		531,534		2,330,737		2,862,272		1,408,487		1984	40 yrs.
30 Great Valley Parkway	Malvern, PA		—		128,126		—		385,634		128,783		384,977		513,760		323,191		1975	40 yrs.
300 Technology Drive	Malvern, PA		—		368,626		—		1,344,816		374,497		1,338,945		1,713,442		738,244		1985	40 yrs.
300-400 Chesterfield Parkway	Malvern, PA		—		937,212		—		5,547,950		1,012,395		5,472,767		6,485,162		2,782,618		1988	40 yrs.
311 Technology Drive	Malvern, PA		—		397,131		—		2,804,635		397,948		2,803,818		3,201,766		1,530,740		1984	40 yrs.
333 Phoenixville Pike	Malvern, PA		—		523,530		—		3,100,124		524,230		3,099,424		3,623,654		1,655,142		1985	40 yrs.
40 Valley Stream Parkway	Malvern, PA		—		322,918		—		3,190,655		325,775		3,187,798		3,513,573		1,504,112		1987	40 yrs.
420 Lapp Road	Malvern, PA		—		1,054,418		—		6,995,902		1,055,243		6,995,077		8,050,320		3,321,024		1989	40 yrs.
5 Country View Road	Malvern, PA		*		785,168		4,678,632		793,019		786,235		5,470,583		6,256,819		2,084,693		1985	40 yrs.
50 Valley Stream Parkway	Malvern, PA		—		323,971		—		2,792,354		323,792		2,792,533		3,116,325		1,263,422		1987	40 yrs.
500 Chesterfield Parkway	Malvern, PA		—		472,364		—		3,322,845		519,463		3,275,746		3,795,209		1,735,165		1988	40 yrs.
508 Lapp Road	Malvern, PA		—		331,392		—		2,021,104		332,216		2,020,280		2,352,496		1,281,611		1984	40 yrs.
510 Lapp Road	Malvern, PA		*		356,950		—		926,587		357,751		925,786		1,283,537		594,192		1983	40 yrs.
55 Valley Stream Parkway	Malvern, PA		—		215,005		—		4,393,160		215,818		4,392,348		4,608,165		2,100,807		1983	40 yrs.
60 Morehall Road	Malvern, PA		—		865,424		9,285,000		4,971,296		884,974		14,236,746		15,121,720		6,986,069		1989	40 yrs.
65 Valley Stream Parkway	Malvern, PA		—		381,544		—		7,189,981		382,361		7,189,164		7,571,525		4,191,547		1983	40 yrs.
7 Great Valley Parkway	Malvern, PA		—		176,435		—		5,102,721		177,317		5,101,840		5,279,156		3,030,399		1985	40 yrs.
75 Great Valley Parkway	Malvern, PA		279,414		143,074		—		772,076		143,811		771,338		915,150		608,527		1977	40 yrs.
77-123 Great Valley Parkway	Malvern, PA		—		887,664		—		5,983,795		888,359		5,983,100		6,871,459		3,602,353		1978	40 yrs.
7550 Meridian Circle	Maple Grove, MN		—		513,250		2,901,906		294,337		513,250		3,196,242		3,709,492		817,635		1989	40 yrs.
10 Stow Road	Marlton, NJ		—		147,000		1,451,536		787,707		147,318		2,238,925		2,386,243		1,032,155		1988	40 yrs.
12 Stow Road	Marlton, NJ		—		103,300		1,021,036		354,854		103,618		1,375,573		1,479,190		632,219		1988	40 yrs.
14 Stow Road	Marlton, NJ		—		93,100		920,336		444,304		93,418		1,364,323		1,457,740		628,804		1988	40 yrs.
301 Lippincott Drive	Marlton, NJ		—		1,069,837		4,780,163		1,577,896		1,069,838		6,358,058		7,427,896		2,328,404		1988	40 yrs.
303 Lippincott Drive	Marlton, NJ		—		1,069,837		4,780,163		3,012,067		1,069,838		7,792,229		8,862,067		2,642,524		1988	40 yrs.
400 Lippincott Drive	Marlton, NJ		—		69,402				3,653,411		317,799		3,405,014		3,722,813		1,059,150		1999	40 yrs.
402 Lippincott Drive	Marlton, NJ		—		131,896		—		1,941,830		131,896		1,941,830		2,073,726		749,536		1997	40 yrs.
404 Lippincott Drive	Marlton, NJ		—		131,896		—		1,814,934		131,896		1,814,934		1,946,830		698,698		1997	40 yrs.
406 Lippincott Drive	Marlton, NJ		—		321,455		1,539,871		1,078,839		327,554		2,612,611		2,940,165		1,043,767		1990	40 yrs.
701A Route 73 South	Marlton, NJ		—		264,387		3,772,000		3,979,178		271,743		7,743,822		8,015,565		3,565,618		1987	40 yrs.
701C Route 73 South	Marlton, NJ		—		84,949		1,328,000		451,599		96,161		1,768,387		1,864,548		721,854		1987	40 yrs.
8 Stow Road	Marlton, NJ		—		172,600		1,704,436		275,284		172,945		1,979,375		2,152,320		733,173		1988	40 yrs.
9 Stow Road	Marlton, NJ		—		652,642		1,765,065		940,082		654,779		2,703,010		3,357,789		862,641		1989	40 yrs.
901 Route 73	Marlton, NJ		—		334,411		2,733,314		822,683		334,411		3,555,997		3,890,408		1,187,738		1985	40 yrs.
65 Brookfield Oaks Drive	Mauldin, SC		—		557,174		—		2,745,259		506,318		2,796,116		3,302,434		169,900		2004	40 yrs.
75 Brookfield Oaks Drive	Mauldin, SC		—		419,731		—		2,476,356		430,909		2,465,178		2,896,087		172,319		2003	40 yrs.
10855 West Park Place	Milwaukee, WI		—		122,894				3,043,854		424,710		2,742,038		3,166,748		541,626		2002	40 yrs.
11050 West Liberty Drive	Milwaukee, WI		—		—		—		3,955,702		914,760		3,040,942		3,955,702		97,769		2005	40 yrs.
11100 West Liberty Drive	Milwaukee, WI		—		1,800,000				7,537,760		1,801,024		7,536,736		9,337,760		1,032,265		2003	40 yrs.
11301 W. Lake Park Drive	Milwaukee, WI		—		614,477		2,626,456		123,888		619,465		2,745,357		3,364,821		610,435		1987	40 yrs.
11400 W. Lake Park Drive	Milwaukee, WI		—		439,595		2,357,904		255,382		443,101		2,609,780		3,052,881		593,216		1986	40 yrs.
11414 West Park Place	Milwaukee, WI		—		234,443				10,613,283		491,531		10,356,196		10,847,727		2,698,542		2001	40 yrs.
11425 W. Lake Park Drive	Milwaukee, WI		—		382,256		2,350,619		978,198		385,305		3,325,768		3,711,073		1,141,533		1987	40 yrs.
11520 West Calumet Road	Milwaukee, WI		—		341,698		1,527,548		78,494		341,698		1,606,042		1,947,740		326,648		1995	40 yrs.
11900 W. Lake Park Drive	Milwaukee, WI		—		347,853		2,396,887		1,077,279		350,628		3,471,392		3,822,020		1,064,356		1987	40 yrs.
11950 W. Lake Park Drive	Milwaukee, WI		—		391,813		2,340,118		570,702		394,938		2,907,695		3,302,633		848,494		1986	40 yrs.
12100 West Park Place	Milwaukee, WI		—		534,470		3,239,389		572,084		532,370		3,813,573		4,345,943		943,035		1984	40 yrs.

109

LIBERTY PROPERTY LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2007

								Costs
								Capitalized										Date of
								Subsequent		Gross Amount Carried at End of Period						Accumulated		Construction		Depreciable
				Initial Cost				to		Land and		Building and		Total		Depreciation		or		life
Project	Location	Encumbrances		Land		Building		Acquisition		Improvements		Improvements		12/31/2007		12/31/07		Acquisition		(years)
OPERATING PROPERTIES
7800 N. 113th Street	Milwaukee, WI		—		1,711,964		6,847,857		429,943		1,711,964		7,277,800		8,989,764		1,959,403		1991	40 yrs.
4600 Nathan Lane	Minneapolis, MN		—		1,063,558				6,777,642		1,038,197		6,803,003		7,841,200		1,775,458		2002	40 yrs.
4700 Nathan Lane North	Minneapolis, MN		—		1,501,308		8,446,083		225,056		1,501,308		8,671,139		10,172,447		1,839,196		1996	40 yrs.
12501 & 12701 Whitewater Drive	Minnegonka, MN		—		2,175,209		3,948,085		7,266,874		2,177,953		11,212,215		13,390,168		1,153,911		1986	40 yrs.
5400-5500 Feltl Road	Minnetonka, MN		—		883,895		7,983,345		2,232,815		883,895		10,216,160		11,100,055		2,875,930		1985	40 yrs.
5600 & 5610 Rowland Road	Minnetonka, MN		—		828,650		7,399,409		1,601,312		829,263		9,000,107		9,829,370		3,259,190		1988	40 yrs.
3350 SW 148th Avenue	Miramar, FL		—		2,960,511		—		19,572,260		2,980,689		19,552,081		22,532,771		5,101,252		2000	40 yrs.
3400 Lakeside Drive	Miramar, FL		—		2,022,153		11,345,881		1,490,617		2,022,153		12,836,497		14,858,651		3,511,199		1990	40 yrs.
3450 Lakeside Drive	Miramar, FL		—		2,022,152		11,357,143		2,300,951		2,022,152		13,658,094		15,680,246		3,968,825		1990	40 yrs.
324 Park Knoll Drive	Morrisville, NC		—		1,449,092		4,424,932		173,445		1,449,450		4,598,019		6,047,469		32,711		2007	40 yrs.
619 Distribution Drive	Morrisville, NC		—		1,031,430		5,655,167		189,953		1,031,685		5,844,865		6,876,550		60,731		2007	40 yrs.
627 Distribution Drive	Morrisville, NC		—		1,061,370		5,152,110		192,986		1,061,632		5,344,834		6,406,466		34,509		2007	40 yrs.
701 Distribution Drive	Morrisville, NC		—		1,300,889		5,313,226		167,064		1,301,211		5,479,968		6,781,179		28,598		2007	40 yrs.
300 Fellowship Road	Mt Laurel, NJ		—		—		—		7,338,755		1,098,904		6,239,851		7,338,755		629,250		2004	40 yrs.
3001 Leadenhall Road	Mt Laurel, NJ		—		1,925,719		191,390		10,965,396		1,936,489		11,146,016		13,082,505		1,304,946		2003	40 yrs.
302 Fellowship Road	Mt Laurel, NJ		—		1,512,120		—		2,920,827		539,060		3,893,887		4,432,947		220,401		2001	40 yrs.
350 Fellowship Road	Mt Laurel, NJ		—		2,960,159		1,449,611		4,550,124		2,970,687		5,989,207		8,959,894		180,619		2006	40 yrs.
4001 Leadenhall Road	Mt. Laurel, NJ		—		3,207,885		391,167		18,844,592		2,784,694		19,658,950		22,443,644		3,445,467		2002	40 yrs.
1000 Briggs Road	Mt. Laurel, NJ		—		288,577		2,546,537		1,457,682		288,577		4,004,219		4,292,796		1,595,432		1986	40 yrs.
1001 Briggs Road	Mt. Laurel, NJ		—		701,705		3,505,652		2,110,296		701,705		5,615,948		6,317,654		2,106,384		1986	40 yrs.
1015 Briggs Road	Mt. Laurel, NJ		—		356,987		—		3,668,207		470,659		3,554,535		4,025,194		933,413		2000	40 yrs.
1020 Briggs Road	Mt. Laurel, NJ		—		494,334		—		3,162,455		569,184		3,087,606		3,656,789		923,496		1999	40 yrs.
1025 Briggs Road	Mt. Laurel, NJ		536,925		430,990		3,714,828		1,212,452		430,990		4,927,280		5,358,270		1,665,511		1987	40 yrs.
11000, 15000 Commerce Parkway	Mt. Laurel, NJ		—		310,585		4,394,900		383,778		311,950		4,777,313		5,089,263		2,180,113		1985	40 yrs.
12000, 14000 Commerce Parkway	Mt. Laurel, NJ		—		361,800		3,285,817		977,119		362,855		4,261,881		4,624,736		1,585,428		1985	40 yrs.
1300 Route 73 North	Mt. Laurel, NJ		—		449,400		3,074,850		2,117,661		450,558		5,191,353		5,641,911		1,738,175		1988	40 yrs.
16000, 18000 Commerce Parkway	Mt. Laurel, NJ		—		289,700		2,512,683		753,744		290,545		3,265,582		3,556,127		1,220,192		1985	40 yrs.
17000 Commerce Parkway	Mt. Laurel, NJ		—		144,515				3,445,866		144,515		3,445,866		3,590,381		814,659		2001	40 yrs.
2000 Crawford Place	Mt. Laurel, NJ		—		310,831		2,797,744		2,845,000		310,831		5,642,744		5,953,575		2,302,923		1986	40 yrs.
3000 Atrium Way	Mt. Laurel, NJ		—		500,000		4,500,000		4,885,795		512,018		9,373,777		9,885,795		4,217,090		1987	40 yrs.
5000 Dearborn Court	Mt. Laurel, NJ		—		1,057,763		4,191,827		1,619,444		1,057,763		5,811,271		6,869,034		1,359,893		1988	40 yrs.
6000 Commerce Parkway	Mt. Laurel, NJ		—		234,151		2,022,683		913,691		234,151		2,936,374		3,170,525		962,597		1985	40 yrs.
7000 Commerce Parkway	Mt. Laurel, NJ		—		260,014		2,236,684		427,949		260,014		2,664,633		2,924,647		828,409		1984	40 yrs.
8000 Commerce Parkway	Mt. Laurel, NJ		—		234,814		1,995,098		518,122		234,814		2,513,220		2,748,034		682,267		1983	40 yrs.
9000 Commerce Parkway	Mt. Laurel, NJ		—		286,587		2,474,820		986,021		286,587		3,460,840		3,747,428		1,116,743		1983	40 yrs.
6 Terry Drive	Newtown, PA		—		622,029		2,228,851		846,148		622,205		3,074,822		3,697,027		991,218		1981	40 yrs.
550-590 Hale Avenue	Oakdale, MN		—		765,535		3,488,754		557,745		766,390		4,045,644		4,812,034		1,009,344		1996	40 yrs.
1879 Lamont Avenue	Odenton, MD		—		1,976,000		8,099,579		2,469,160		2,011,030		10,533,709		12,544,739		873,140		2004	40 yrs.
350 Winmeyer Avenue	Odenton, MD		—		1,778,400		7,289,165		1,867,935		1,809,927		9,125,573		10,935,500		675,355		2004	40 yrs.
10003 Satellite Boulevard	Orlando, FL		—		680,312		2,120,754		1,487,165		680,312		3,607,919		4,288,231		544,415		2003	40 yrs.
10511 & 10611 Satellite Boulevard	Orlando, FL		—		517,554		2,568,186		486,338		522,991		3,049,087		3,572,078		934,847		1985	40 yrs.
10771 Palm Bay Drive	Orlando, FL		—		664,605				2,362,814		685,383		2,342,035		3,027,419		358,052		2001	40 yrs.
1090 Gills Drive	Orlando, FL		—		878,320		2,558,833		1,371,034		878,320		3,929,867		4,808,187		425,791		2003	40 yrs.
1400-1440 Central Florida Parkway	Orlando, FL		—		518,043		2,561,938		532,512		518,043		3,094,451		3,612,493		805,450		1962	40 yrs.
1902 Cypress Lake Drive	Orlando, FL		—		523,512		3,191,790		880,341		538,512		4,057,131		4,595,643		1,229,775		1989	40 yrs.
1950 Summit Park Drive	Orlando, FL		—		2,573,700		17,478,646		551,660		2,583,667		18,020,339		20,604,006		1,280,052		2005	40 yrs.
1958 Summit Park Drive	Orlando, FL		—		2,573,961		11,206,937		8,841,420		2,583,216		20,039,102		22,622,318		1,460,000		2005	40 yrs.
2202 Taft-Vineland Road	Orlando, FL		—		—		—		6,630,654		1,283,713		5,346,941		6,630,654		818,689		2004	40 yrs.
2216 Directors Row	Orlando, FL		—		453,918		2,572,202		27,479		453,918		2,599,681		3,053,599		621,042		1998	40 yrs.
2256 Taft-Vineland Road	Orlando, FL		—		467,296		—		2,494,210		825,673		2,135,833		2,961,506		168,879		2005	40 yrs.
2351 Investors Row	Orlando, FL		—		2,261,924		7,496,249		411,516		2,263,211		7,906,478		10,169,689		580,050		2004	40 yrs.
2400 South Lake Orange Drive	Orlando, FL		—		385,964		—		2,408,252		642,427		2,151,789		2,794,216		428,649		2001	40 yrs.
2416 Lake Orange Drive	Orlando, FL		—		535,964				3,157,069		704,800		2,988,233		3,693,033		860,785		2002	40 yrs.
3701-3727 Vineland Road	Orlando, FL		—		767,929		2,096,504		412,624		767,929		2,509,128		3,277,057		636,115		1985	40 yrs.
6200 Lee Vista Boulevard	Orlando, FL		—		1,423,584		6,399,510		65,322		1,435,301		6,453,115		7,888,416		305,622		2006	40 yrs.
6501 Lee Vista Boulevard	Orlando, FL		—		903,701				5,560,142		925,671		5,538,172		6,463,843		885,582		2001	40 yrs.
6923 Lee Vista Boulevard	Orlando, FL		—		903,701		—		3,790,657		830,953		3,863,405		4,694,358		87,873		2006	40 yrs.
7022 TPC Drive	Orlando, FL		—		1,443,510		6,845,559		537,018		1,457,286		7,368,802		8,826,087		313,517		2006	40 yrs.
7100 TPC Drive	Orlando, FL		—		1,431,489		7,948,341		467,474		1,445,807		8,401,496		9,847,303		295,955		2006	40 yrs.
7101 TPC Drive	Orlando, FL		—		1,553,537		5,301,499		780,510		1,570,863		6,064,683		7,635,546		218,818		2006	40 yrs.
7315 Kingspointe Parkway	Orlando, FL		—		1,931,697		6,388,203		2,218,758		1,932,004		8,606,654		10,538,658		956,926		2004	40 yrs.
9550 Satellite Boulevard	Orlando, FL		—		574,831		—		2,331,726		587,319		2,319,238		2,906,557		656,120		1999	40 yrs.
9600 Satellite Boulevard	Orlando, FL		—		252,850		1,297,923		62,116		252,850		1,360,039		1,612,889		376,669		1989	40 yrs.
9700 Satellite Boulevard	Orlando, FL		—		405,362		1,146,546		350,999		405,362		1,497,545		1,902,907		430,141		1989	40 yrs.
South Center Land-Phase II	Orlando, FL		—		838,853		—		4,081,850		767,953		4,152,751		4,920,703		167,128		2006	40 yrs.
N26 W23445 Paul Road	Pewaukee, WI		—		561,904		1,928,064		113,241		561,904		2,041,305		2,603,209		416,363		1985	40 yrs.
1 Crescent Drive	Philadelphia, PA		—		567,280		—		13,553,937		347,892		13,773,325		14,121,217		456,979		2004	40 yrs.
17th & JFK Tower	Philadelphia, PA		—		—				360,323,148		17,722,105		342,601,043		360,323,148		1,780,004		2005	40 yrs.
3 Franklin Plaza	Philadelphia, PA		—		2,483,144		—		32,150,134		2,514,519		32,118,759		34,633,278		6,965,923		1999	40 yrs.
4751 League Island Boulevard	Philadelphia, PA		—		992,965		331,924		6,753,197		1,022,081		7,056,006		8,078,087		781,613		2003	40 yrs.
4775 League Island Boulevard	Philadelphia, PA		—		891,892		—		5,297,375		366,982		5,822,285		6,189,267		11,338		2006	40 yrs.
8801 Tinicum Boulevard	Philadelphia, PA		—		2,474,031		—		43,598,952		125,087		45,947,896		46,072,983		13,773,560		1997	40 yrs.
4207 E. Cotton Center Boulevard	Phoenix, AZ		—		1,409,908		4,680,808		1,092,527		1,410,248		5,772,995		7,183,243		147,155		2007	40 yrs.

110

LIBERTY PROPERTY LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2007

								Costs
								Capitalized										Date of
								Subsequent		Gross Amount Carried at End of Period						Accumulated		Construction		Depreciable
				Initial Cost				to		Land and		Building and		Total		Depreciation		or		life
Project	Location	Encumbrances		Land		Building		Acquisition		Improvements		Improvements		12/31/2007		12/31/07		Acquisition		(years)
OPERATING PROPERTIES
4217 E. Cotton Center Boulevard	Phoenix, AZ		—		4,831,925		10,045,599		969,985		4,833,088		11,014,421		15,847,509		193,521		2007	40 yrs.
4303 E. Cotton Center Boulvard	Phoenix, AZ		*		2,619,964		9,675,711		—		2,619,964		9,675,711		12,295,675		156,380		2007	40 yrs.
4313 E. Cotton Center Boulevard	Phoenix, AZ		*		3,895,539		16,724,283		567,679		3,895,539		17,291,962		21,187,501		264,137		2007	40 yrs.
4405 E. Cotton Center Boulevard	Phoenix, AZ		*		2,646,318		9,697,439		—		2,646,318		9,697,439		12,343,757		142,330		2007	40 yrs.
4410 E. Cotton Center Boulevard	Phoenix, AZ		—		4,758,484		10,559,563		900,340		4,765,172		11,453,215		16,218,387		—		2007	40 yrs.
4415 E. Cotton Center Boulevard	Phoenix, AZ		*		1,749,957		3,767,213		—		1,749,957		3,767,213		5,517,170		83,884		2007	40 yrs.
4425 E. Cotton Center Boulvard	Phoenix, AZ		*		7,318,457		24,549,401		—		7,318,457		24,549,401		31,867,858		390,360		2007	40 yrs.
4435 E. Cotton Center Boulevard	Phoenix, AZ		—		1,910,584		1,954,020		194,883		1,911,045		2,148,443		4,059,487		—		2007	40 yrs.
4750 S. 44th Place	Phoenix, AZ		—		3,756,307		8,336,400		608,733		3,761,587		8,939,853		12,701,440		—		2007	40 yrs.
9801 80th Avenue	Pleasant Prairie, WI		—		1,692,077		7,934,794		62,495		1,689,726		7,999,640		9,689,366		1,818,205		1994	40 yrs.
2250 Hickory Road	Plymouth Meeting, PA		—		1,015,851		9,175,555		2,653,138		1,032,507		11,812,038		12,844,545		3,348,814		1985	40 yrs.
14630-14650 28th Avenue North	Plymouth, MN		—		198,205		1,793,422		791,374		198,205		2,584,796		2,783,001		781,110		1978	40 yrs.
2800 Campus Drive	Plymouth, MN		—		395,366		3,554,512		1,114,936		395,366		4,669,447		5,064,814		1,587,548		1985	40 yrs.
2800 Northwest Boulevard	Plymouth, MN		—		1,934,438		10,952,503		487,190		1,934,438		11,439,693		13,374,130		2,977,242		1995	40 yrs.
2905 Northwest Boulevard	Plymouth, MN		—		516,920		4,646,342		1,830,557		516,920		6,476,899		6,993,819		2,266,092		1983	40 yrs.
2920 Northwest Boulevard	Plymouth, MN		—		392,026		3,433,678		656,167		384,235		4,097,636		4,481,871		1,235,384		1997	40 yrs.
2955 Xenium Lane	Plymouth, MN		—		151,238		1,370,140		500,457		151,238		1,870,597		2,021,835		671,827		1985	40 yrs.
9600 54th Avenue	Plymouth, MN		—		332,317		3,077,820		1,020,792		332,317		4,098,612		4,430,929		1,194,422		1998	40 yrs.
1400 SW 6th Court	Pompano Beach, FL		—		1,157,049		4,620,956		287,361		1,157,049		4,908,317		6,065,366		1,298,386		1986	40 yrs.
1405 SW 6th Court	Pompano Beach, FL		—		392,138		1,565,787		121,640		392,138		1,687,427		2,079,565		461,163		1985	40 yrs.
1500 SW 5th Court	Pompano Beach, FL		—		972,232		3,892,085		238,659		972,232		4,130,744		5,102,975		1,104,263		1957	40 yrs.
1501 SW 5th Court	Pompano Beach, FL		—		203,247		811,093		36,963		203,247		848,057		1,051,304		226,020		1990	40 yrs.
1601 SW 5th Court	Pompano Beach, FL		—		203,247		811,093		402,780		203,247		1,213,873		1,417,120		364,809		1990	40 yrs.
1651 SW 5th Court	Pompano Beach, FL		—		203,247		811,093		126,108		203,247		937,202		1,140,449		310,094		1990	40 yrs.
595 SW 13th Terrace	Pompano Beach, FL		—		359,933		1,437,116		95,731		359,933		1,532,847		1,892,780		419,213		1984	40 yrs.
601 SW 13th Terrace	Pompano Beach, FL		—		164,413		655,933		119,530		164,413		775,463		939,875		233,732		1984	40 yrs.
605 SW 16th Terrace	Pompano Beach, FL		—		310,778		1,238,324		292,785		310,178		1,531,710		1,841,888		382,277		1965	40 yrs.
100 Westgate Parkway	Richmond, VA		—		1,140,648		101,824		8,408,649		1,456,084		8,195,037		9,651,121		1,453,495		2001	40 yrs.
1001 Boulders Parkway	Richmond, VA		—		2,073,739		5,634,796		1,504,929		2,079,643		7,133,821		9,213,463		499,923		2005	40 yrs.
10800 Nuckols Boulevard	Richmond, VA		—		1,432,462		—		14,420,839		1,794,162		14,059,139		15,853,301		2,779,955		2000	40 yrs.
1100 Boulders Parkway	Richmond, VA		—		1,276,936		12,052,192		1,061,040		1,280,662		13,109,507		14,390,169		600,025		2005	40 yrs.
200 Westgate Parkway	Richmond, VA		—		1,623,612				5,914,467		1,072,797		6,465,283		7,538,080		1,147,351		2002	40 yrs.
2300 East Parham Road	Richmond, VA		—		221,947		1,011,088		2,443		221,947		1,013,531		1,235,478		359,675		1988	40 yrs.
301 Hill Carter Parkway	Richmond, VA		—		659,456		4,836,010		625		659,456		4,836,635		5,496,091		1,552,015		1989	40 yrs.
3829-3855 Gaskins Road	Richmond, VA		—		364,165		3,264,114		39,764		364,165		3,303,879		3,668,044		812,000		1988	40 yrs.
3900 Westerre Parkway	Richmond, VA		—		392,184		—		11,586,017		1,100,000		10,878,201		11,978,201		286,520		2005	40 yrs.
4001 Carolina Avenue	Richmond, VA		—		29,443		215,914		321,189		29,443		537,103		566,546		146,750		1935	40 yrs.
4101-4127 Carolina Avenue	Richmond, VA		—		310,854		2,279,597		567,636		310,854		2,847,233		3,158,087		866,601		1973	40 yrs.
4201-4261 Carolina Avenue	Richmond, VA		—		693,203		5,083,493		1,557,085		693,203		6,640,578		7,333,781		2,105,677		1975	40 yrs.
4263-4299 Carolina Avenue	Richmond, VA		—		256,203		2,549,649		1,677,325		256,203		4,226,974		4,483,177		1,308,176		1976	40 yrs.
4263F-N. Carolina Avenue	Richmond, VA		—		91,476		—		1,642,725		91,599		1,642,601		1,734,201		488,721		1975	40 yrs.
4300 Carolina Avenue	Richmond, VA		—		2,007,717		14,927,608		496,232		2,009,136		15,422,421		17,431,557		4,912,960		1985	40 yrs.
4301-4335 Carolina Avenue	Richmond, VA		—		223,696		1,640,435		2,521,213		223,696		4,161,648		4,385,344		697,915		1978	40 yrs.
4337-4379 Carolina Avenue	Richmond, VA		—		325,303		2,385,557		1,505,735		325,303		3,891,292		4,216,595		1,416,324		1979	40 yrs.
4401-4445 Carolina Avenue	Richmond, VA		—		615,038		4,510,272		397,983		615,038		4,908,255		5,523,293		1,603,063		1988	40 yrs.
4447-4491 Carolina Avenue	Richmond, VA		—		454,056		2,729,742		293,897		454,056		3,023,639		3,477,695		1,056,031		1987	40 yrs.
4501-4549 Carolina Avenue	Richmond, VA		—		486,166		3,565,211		410,129		486,166		3,975,340		4,461,506		1,307,030		1981	40 yrs.
4551-4593 Carolina Avenue	Richmond, VA		—		474,360		3,478,646		295,023		474,360		3,773,669		4,248,029		1,197,255		1982	40 yrs.
4601-4643 Carolina Avenue	Richmond, VA		—		652,455		4,784,675		622,565		652,455		5,407,240		6,059,695		1,891,184		1985	40 yrs.
4645-4683 Carolina Avenue	Richmond, VA		—		404,616		2,967,187		1,162,867		404,616		4,130,054		4,534,670		1,855,923		1985	40 yrs.
4717-4729 Eubank Road	Richmond, VA		*		449,447		3,294,697		746,131		452,263		4,038,011		4,490,274		1,316,372		1978	40 yrs.
510 Eastpark Court	Richmond, VA		—		261,961		2,110,874		318,159		262,210		2,428,783		2,690,994		863,060		1989	40 yrs.
520 Eastpark Court	Richmond, VA		—		486,118		4,083,582		369,957		486,598		4,453,059		4,939,657		1,342,013		1989	40 yrs.
530 Eastpark Court	Richmond, VA		—		266,883		—		3,094,780		334,772		3,026,891		3,361,663		1,151,352		1999	40 yrs.
5600-5626 Eastport Boulevard	Richmond, VA		—		489,941		3,592,900		306,207		489,941		3,899,107		4,389,048		1,336,992		1989	40 yrs.
5601-5659 Eastport Boulevard	Richmond, VA		*		705,660		—		4,786,645		720,100		4,772,205		5,492,305		1,793,389		1996	40 yrs.
5650-5674 Eastport Boulevard	Richmond, VA		—		644,384		4,025,480		244,746		644,384		4,270,226		4,914,610		1,505,687		1990	40 yrs.
5700 Eastport Boulevard	Richmond, VA		—		408,729		2,697,348		803,670		408,729		3,501,018		3,909,747		1,154,787		1990	40 yrs.
5701-5799 Eastport Boulevard	Richmond, VA		—		694,644		—		5,853,069		700,503		5,847,211		6,547,713		1,790,641		1998	40 yrs.
5900 Eastport Boulevard	Richmond, VA		—		676,661		—		4,818,232		687,898		4,806,995		5,494,893		1,400,359		1997	40 yrs.
7400 Beaufont Springs Drive	Richmond, VA		—		808,581		7,273,850		848,713		810,743		8,120,401		8,931,144		549,911		2005	40 yrs.
2020 US Highway 301 South	Riverview, FL		—		1,233,639		13,608,485		109,898		1,233,800		13,718,223		14,952,022		542,277		2006	40 yrs.
6509 Franz Warner Parkway	Rock Creek, NC		—		360,494				2,829,679		372,494		2,817,679		3,190,173		604,978		2001	40 yrs.
6530 Judge Adams Road	Rock Creek, NC		—		305,821		—		4,482,749		335,061		4,453,509		4,788,570		1,012,903		1999	40 yrs.
6532 Judge Adams Road	Rock Creek, NC		—		354,903		—		3,684,570		399,988		3,639,485		4,039,473		1,094,320		1997	40 yrs.
8501 East Raintree Drive	Scottsdale, AZ		—		4,076,412		—		27,560,620		4,115,137		27,521,895		31,637,032		1,395,674		2005	40 yrs.
Renaissance Blvd & Hwy 20	Sturtevant, WI		—		2,484,450		—		21,092,616		2,487,293		21,089,772		23,577,065		289,752		2006	40 yrs.
6900 Harbor View Boulevard	Suffolk, VA		—		904,052		—		7,713,609		807,006		7,810,655		8,617,661		35,341		2006	40 yrs.
6950 Harbor View Blvd	Suffolk, VA		—		929,844		—		6,199,855		794,848		6,334,852		7,129,699		313,503		2004	40 yrs.
1301 International Parkway	Sunrise, FL		—		5,100,162		24,219,956		5,139,158		5,100,791		29,358,484		34,459,275		365,800		2006	40 yrs.
13630 NW 8th Street	Sunrise, FL		—		659,797		2,596,275		772,671		659,825		3,368,917		4,028,742		1,063,647		1991	40 yrs.
13650 NW 8th Street	Sunrise, FL		—		558,223		2,171,930		107,040		558,251		2,278,942		2,837,193		665,045		1991	40 yrs.
111 Kelsey Lane	Tampa, FL		—		359,540		1,461,850		660,118		359,540		2,121,968		2,481,508		827,031		1990	40 yrs.

111

LIBERTY PROPERTY LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2007

								Costs
								Capitalized										Date of
								Subsequent		Gross Amount Carried at End of Period						Accumulated		Construction		Depreciable
				Initial Cost				to		Land and		Building and		Total		Depreciation		or		life
Project	Location	Encumbrances		Land		Building		Acquisition		Improvements		Improvements		12/31/2007		12/31/07		Acquisition		(years)
OPERATING PROPERTIES
131 Kelsey Lane	Tampa, FL		—		511,463		—		4,455,291		559,527		4,407,227		4,966,754		1,903,048		1985	40 yrs.
150-182 Kelsey Lane	Tampa, FL		—		403,541		—		5,545,972		1,181,609		4,767,905		5,949,513		189,289		2006	40 yrs.
200-34 Kelsey Lane	Tampa, FL		—		330,097		—		3,645,946		933,362		3,042,680		3,976,042		474,230		2005	40 yrs.
3102,3104,3110 Cherry Palm Drive	Tampa, FL		—		503,767		2,787,585		1,785,138		503,767		4,572,723		5,076,490		1,466,211		1986	40 yrs.
4502 Woodland Corporate Boulevard	Tampa, FL		—		—		—		4,005,900		1,071,535		2,934,365		4,005,900		601,604		1999	40 yrs.
4503 Woodland Corporate Boulevard	Tampa, FL		—		—				3,455,368		619,913		2,835,455		3,455,368		501,809		2002	40 yrs.
4505 Woodland Corporate Boulevard	Tampa, FL		—		—				3,386,036		716,594		2,669,442		3,386,036		662,669		2002	40 yrs.
4508 Woodland Corporate Boulevard	Tampa, FL		—		498,598		—		3,057,752		556,887		2,999,463		3,556,350		666,220		2000	40 yrs.
4511 Woodland Corporate Boulevard	Tampa, FL		—		—				2,840,466		686,594		2,153,872		2,840,466		451,181		2002	40 yrs.
4520 Seedling Circle	Tampa, FL		—		854,797		42,131		2,721,233		854,797		2,763,364		3,618,161		254,918		2003	40 yrs.
4630 Woodland Corporate Boulevard	Tampa, FL		—		943,169		—		12,427,823		1,560,099		11,810,893		13,370,992		2,585,819		2000	40 yrs.
501 US Highway 301 South	Tampa, FL		—		898,884		—		3,498,107		900,508		3,496,483		4,396,991		431,370		2004	40 yrs.
5250 Eagle Trail Drive	Tampa, FL		—		952,860		—		3,581,057		952,860		3,581,057		4,533,916		927,289		1998	40 yrs.
5501-5519 Pioneer Park Boulevard	Tampa, FL		—		162,000		1,613,000		876,957		262,416		2,389,541		2,651,957		673,340		1981	40 yrs.
5690-5694 Crenshaw Street	Tampa, FL		—		181,923		1,812,496		217,470		181,923		2,029,967		2,211,890		647,007		1979	40 yrs.
701-725 South US Hwy 301	Tampa, FL		—		419,683		—		3,840,421		661,680		3,598,424		4,260,104		1,247,910		2000	40 yrs.
7621 Bald Cypress Place (Bldg N)	Tampa, FL		—		—		—		1,482,613		447,498		1,035,115		1,482,613		152,747		2001	40 yrs.
7622 Bald Cypress Place	Tampa, FL		—		—		—		1,305,584		300,000		1,005,584		1,305,584		198,160		2000	40 yrs.
7724 Woodland Center Boulevard	Tampa, FL		—		235,893		—		2,344,137		235,894		2,344,136		2,580,030		728,442		1998	40 yrs.
7725 Woodland Center Boulevard	Tampa, FL		—		553,335		—		3,240,449		771,501		3,022,283		3,793,784		723,116		1999	40 yrs.
7802-50 Woodland Center Boulevard	Tampa, FL		—		357,364		—		2,820,324		506,949		2,670,740		3,177,688		1,099,457		1999	40 yrs.
7851-7861 Woodland Center Blvd	Tampa, FL		—		548,905		2,241,627		115,828		548,905		2,357,455		2,906,360		113,405		2006	40 yrs.
7852-98 Woodland Center Boulevard	Tampa, FL		—		357,364		—		2,729,496		506,949		2,579,911		3,086,860		1,061,995		1999	40 yrs.
7920 Woodland Center Boulevard	Tampa, FL		*		1,082,648		2,445,444		23,564		1,082,648		2,469,008		3,551,656		663,487		1997	40 yrs.
7930, 8010-20 Woodland Center Boulevard	Tampa, FL		*		1,408,478		5,247,246		1,141,517		1,408,478		6,388,763		7,797,241		1,912,759		1990	40 yrs.
8001 Woodland Center Boulevard	Tampa, FL		—		350,406		—		2,453,154		438,061		2,365,500		2,803,561		622,092		1999	40 yrs.
8112-42 Woodland Center Boulevard	Tampa, FL		*		513,263		3,230,239		658,168		513,263		3,888,408		4,401,670		1,018,296		1995	40 yrs.
8154-8198 Woodland Center Boulevard	Tampa, FL		*		399,088		2,868,834		452,248		399,088		3,321,082		3,720,170		1,087,323		1988	40 yrs.
8212 Woodland Center Boulevard	Tampa, FL		*		820,882		2,322,720		14,210		820,882		2,336,931		3,157,813		622,179		1996	40 yrs.
8401-8408 Benjamin Road	Tampa, FL		—		789,651		4,454,648		2,174,068		769,789		6,648,578		7,418,367		2,471,009		1986	40 yrs.
8705 Henderson Road	Tampa, FL		—		4,303,870		23,688,409		519,669		4,304,102		24,207,846		28,511,948		1,836,933		2006	40 yrs.
8715 Henderson Road	Tampa, FL		—		3,343,910		18,325,599		113,023		3,344,090		18,438,441		21,782,532		789,087		2006	40 yrs.
8725 Henderson Road	Tampa, FL		—		3,167,787		19,126,318		9,095		3,167,958		19,135,243		22,303,200		953,382		2006	40 yrs.
8735 Henderson Road	Tampa, FL		—		3,166,130		18,735,573		744,334		3,166,300		19,479,737		22,646,038		951,131		2006	40 yrs.
8745 Henderson Road	Tampa, FL		—		2,050,439		11,173,008		287,153		2,050,548		11,460,051		13,510,600		565,095		2006	40 yrs.
8900-34 Brittany Was	Tampa, FL		—		537,194		—		4,267,109		978,019		3,826,284		4,804,303		287,568		2005	40 yrs.
8921 Brittany Way	Tampa, FL		—		224,369		1,063,882		972,276		254,493		2,006,034		2,260,527		505,264		1998	40 yrs.
9001-9015 Brittany Way	Tampa, FL		—		209,841		—		1,884,803		364,514		1,730,131		2,094,645		378,921		2000	40 yrs.
9002-9036 Brittany Way	Tampa, FL		—		492,320		—		3,964,055		899,284		3,557,092		4,456,375		506,973		2004	40 yrs.
901-933 US Highway 301 South	Tampa, FL		—		500,391				4,040,059		840,314		3,700,136		4,540,450		1,110,267		2001	40 yrs.
910-926 Chad Lane	Tampa, FL		—		201,771		—		3,381,832		628,237		2,955,366		3,583,603		107,554		2006	40 yrs.
8313 West Pierce Street	Tolleson, AZ		—		2,295,090		9,079,811		2,412,761		2,295,090		11,492,572		13,787,662		17		2007	40 yrs.
3701 Corporate Parkway	Upper Saucon, PA		—		1,078,674		—		9,555,371		901,968		9,732,077		10,634,045		224,082		2005	40 yrs.
1457 Miller Store Road	Virginia Beach, VA		—		473,689		2,663,045		817,767		474,746		3,479,756		3,954,501		434,659		2003	40 yrs.
200 Golden Oak Court	Virginia Beach, VA		—		1,116,693		6,770,480		1,252,748		1,116,693		8,023,228		9,139,920		2,264,749		1988	40 yrs.
208 Golden Oak Court	Virginia Beach, VA		—		965,177		6,728,717		1,329,024		965,177		8,057,741		9,022,918		2,342,699		1989	40 yrs.
2809 South Lynnhaven Road	Virginia Beach, VA		—		953,590		6,142,742		1,232,548		953,590		7,375,290		8,328,880		2,040,121		1987	40 yrs.
484 Viking Drive	Virginia Beach, VA		—		891,753		3,607,890		524,371		891,753		4,132,261		5,024,014		1,167,877		1987	40 yrs.
5700 Cleveland Street	Virginia Beach, VA		—		700,112		9,592,721		2,138,368		700,564		11,730,636		12,431,201		3,416,125		1989	40 yrs.
629 Phoenix Drive	Virginia Beach, VA		—		371,694		2,108,097		238,683		371,694		2,346,780		2,718,474		652,271		1996	40 yrs.
11020 West Plank Court	Wauwatosa, WI		—		464,246		2,681,255		49,877		464,246		2,731,132		3,195,378		612,819		1985	40 yrs.
1200 Liberty Ridge Drive	Wayne, PA		—		6,215,667				8,735,869		5,223,660		9,727,876		14,951,536		2,783,096		2001	40 yrs.
1500 Liberty Ridge	Wayne, PA		—		8,287,555				31,381,983		11,636,499		28,033,040		39,669,539		5,241,616		2002	40 yrs.
825 Duportail Road	Wayne, PA		—		5,536,619		16,179,213		2,937,214		5,539,281		19,113,765		24,653,046		3,324,266		1979	40 yrs.
11300-90 West Theodore Trecker Way	West Allis, WI		*		500,565		1,591,678		614,413		505,972		2,200,683		2,706,656		153,261		2005	40 yrs.
11420 West Theodore Trecker Way	West Allis, WI		—		348,146		2,057,483		27,202		350,008		2,082,824		2,432,831		133,024		2005	40 yrs.
11548 West Theodore Trecker Way	West Allis, WI		*		660,068		4,640,578		53,871		663,766		4,690,752		5,354,517		299,140		2005	40 yrs.
400-500 Brandywine Parkway	West Chester, PA		—		845,846		6,809,025		438,609		845,846		7,247,634		8,093,480		1,921,119		1988	40 yrs.
600 Brandywine Parkway	West Chester, PA		—		664,899		5,352,410		842,826		664,899		6,195,236		6,860,135		1,759,649		1988	40 yrs.
905 Airport Road	West Chester, PA		—		1,715,000		5,185,000		1,103,105		1,735,012		6,268,093		8,003,105		2,463,813		1988	40 yrs.
1 Kings Hill Aveune	West Malling, UK		—		—		—		16,892,742		4,288,389		12,604,353		16,892,742		241,857		2006	40 yrs.
42 Kings Hill Avenue	West Malling, UK		—		—		—		22,904,886		5,397,739		17,507,147		22,904,886		280,180		2005	40 yrs.
Liberty Square Retail Blocks	West Malling, UK		—		559,590		5,113,902		6,060,994		1,429,824		10,304,661		11,734,485		667,305		2006	40 yrs.
3612 La Grange Parkway	Williamsburg, VA		—		—		—		5,722,994		887,234		4,835,761		5,722,994		406,964		2003	40 yrs.
7805 Hudson Road	Woodbury, MN		—		1,279,834				10,338,324		1,385,739		10,232,420		11,618,158		2,382,922		2002	40 yrs.
777 Township Line Road	Yardley, PA		—		3,436,013		—		16,449,511		3,166,323		16,719,201		19,885,524		196,127		2005	40 yrs.
Subtotal Operating Real Estate		$	82,614,282	$	711,398,128	$	1,822,689,613	$	2,697,144,793	$	796,501,253	$	4,434,731,280	$	5,231,232,534	$	863,609,256

112

LIBERTY PROPERTY LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2007

								Costs
								Capitalized										Date of
								Subsequent		Gross Amount Carried at End of Period						Accumulated		Construction		Depreciable
				Initial Cost				to		Land and		Building and		Total		Depreciation		or		life
Project	Location	Encumbrances		Land		Building		Acquisition		Improvements		Improvements		12/31/2007		12/31/07		Acquisition		(years)
DEVELOPMENT PROPERTIES
3450 High Point Boulevard	Bethlehem, PA		—		303,197		—		3,213,090		—		3,516,287		3,516,287		—		2006		N/A
750 Park of Commerce Boulevard	Boca Raton, FL		—		2,430,000		—		11,469,957		—		13,899,957		13,899,957		—		2007		N/A
8500 Industrial Bouldvard	Breinigsville, PA		—		8,752,708		—		22,879,391		—		31,632,099		31,632,099		—		2007		N/A
95 Kriner Road	Chambersburg, PA		—		8,695,501		—		25,570,178		—		34,265,679		34,265,679		—		2006		N/A
676 Independence Parkway	Chesapeake, VA		—		1,527,303		—		3,887,406		—		5,414,710		5,414,710		—		2006		N/A
116 Pleasant Ridge Road	Greenville, SC		—		1,547,811		—		11,586,942		—		13,134,753		13,134,753		—		2006		N/A
7 Independence Pointe	Greenville, SC		—		932,484		—		9,781,292		—		10,713,776		10,713,776		—		2006		N/A
1487 South Highway 101	Greer, SC		—		464,237		—		4,540,189		—		5,004,426		5,004,426		—		2007		N/A
7361 Coca Cola Drive	Hanover, MD		—		2,245,187		—		3,858,483		—		6,103,670		6,103,670		—		2004		N/A
4475 Premier Drive	High Point, NC		—		748,693		—		4,809,800		—		5,558,493		5,558,493		—		2006		N/A
16680 Central Green Boulevard	Houston, TX		—		311,952		—		2,380,086		—		2,692,038		2,692,038		—		2001		N/A
8301 Fallbrook Drive	Houston, TX		—		4,515,862		—		3,171,777		—		7,687,639		7,687,639		—		2006		N/A
4875 Belfort Road	Jacksonville, FL		—		2,089,347		—		6,163,558		—		8,252,905		8,252,905		—		1998		N/A
3100 SW 145th Avenue	Miramar, FL		—		6,204,407		—		1,797,395		—		8,001,803		8,001,803		—		2007		N/A
330 Fellowship Road	Mount Laurel, NJ		—		3,730,570		—		11,680,261		—		15,410,831		15,410,831		—		2006		N/A
27th Street	Oak Creek, Wi		—		348,280		—		1,639,415		—		1,987,695		1,987,695		—		2007		N/A
Corporate Preserve Drive	Oak Creek, Wi		—		516,016		—		2,092,046		—		2,608,062		2,608,062		—		2007		N/A
1000 Gills Drive	Orlando, FL		—		333,873		—		2,308,480		—		2,642,353		2,642,353		—		2006		N/A
851 Gills Drive	Orlando, FL		—		267,313		—		2,357,588		—		2,624,901		2,624,901		—		2006		N/A
950 Gills Drive	Orlando, FL		—		356,418		—		2,435,279		—		2,791,697		2,791,697		—		2006		N/A
17th & JFK Tower	Philadelphia, PA		—		22,430,038				82,221,258		—		104,651,296		104,651,296		—		2005		N/A
4550 South 44th Street	Phoenix, AZ		—		5,380,972		—		820,860		—		6,201,833		6,201,833		—		2007		N/A
4610 South 44th Street	Phoenix, AZ		—		6,539,310		—		1,005,199		—		7,544,509		7,544,509		—		2007		N/A
3901 Westerre Parkway	Richmond, VA		—		634,231		—		4,722,718		—		5,356,949		5,356,949		—		2003		N/A
540 Eastpark Court	Richmond, VA		—		742,300		—		1,015,459		—		1,757,759		1,757,759		—		2007		N/A
6000 Eastport Blvd	Richmond, VA		—		872,901		—		6,356,184		—		7,229,085		7,229,085		—		1997		N/A
4631 Woodland Corporate Blvd	Tampa, FL		—		1,453,367		—		7,083,923		—		8,537,290		8,537,290		—		2006		N/A
9306-24 East Broadway Avenue	Tampa, FL		—		450,440		—		2,465,119		—		2,915,559		2,915,559		—		2007		N/A
Subtotal Development in Progress		$	—	$	84,824,719	$	—	$	243,313,335	$	—	$	328,138,055	$	328,138,055	$	—

113

LIBERTY PROPERTY LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2007

									Costs
									Capitalized										Date of
									Subsequent		Gross Amount Carried at End of Period						Accumulated		Construction		Depreciable
				Initial Cost					to		Land and		Building and		Total		Depreciation		or		life
Project	Location	Encumbrances		Land			Building		Acquisition		Improvements		Improvements		12/31/2007		12/31/07		Acquisition		(years)
LAND HELD FOR DEVELOPMENT
Perryman Road Land	Aberdeen, MD		—		12,052,635			—		222,249		12,274,884		—		12,274,884		—		2005		N/A
2 Womack Drive Land	Annapolis, MD		—		5,796,667			—		6,444		5,803,111		—		5,803,111		—		2007		N/A
LVCC Phase 2 Land	Bethlehem, PA		—		—			—		3,616,272		3,616,272		—		3,616,272		—		1998		N/A
Lehigh Valley Corporate Center Land	Bethlehem, PA		—		—			—		265,842		265,842		—		265,842		—		1987		N/A
Boca Colannade Yamato Road	Boca Raton, FL		—		2,039,735			—		566,124		2,605,859		—		2,605,859		—		1998		N/A
Flying Cloud Drive Land	Eden Pairie, MN		—		2,336,933			—		2,475,658		4,812,591		—		4,812,591		—		2007		N/A
Camelback 303 Business Center Land	Goodyear, AZ		—		16,857,556			—		1,998,015		18,855,571		—		18,855,571		—		2007		N/A
Pleasant Ridge Road Land	Greensboro, NC		—		564,535			—		2,862,532		3,427,067		—		3,427,067		—		2006		N/A
Southchase Business Park Land	Greenville, SC		—		1,308,325			—		757,227		2,065,552		—		2,065,552		—		1998		N/A
Caliber Ridge Ind. Park Land	Greer, SC		—		2,297,492			—		3,554,811		5,852,303		—		5,852,303		—		2007		N/A
Hunters Green Land	Hagerstown, MD		—		8,845,793			—		10,284,365		19,130,158		—		19,130,158		—		2006		N/A
Lakefront Plaza II Land	Hampton, VA		229,950		138,101			—		88,708		226,810		—		226,810		—		2001		N/A
Mendenhall Land	High Point, NC		—		1,757,675			—		4,525,346		6,283,021		—		6,283,021		—		1995		N/A
Piedmond Centre Land	High Point, NC		—		913,276			—		630,877		1,544,153		—		1,544,153		—		2006		N/A
Commonwealth Corporate Center Land	Horsham, PA		—		3,043,938			—		23,755		3,067,693		—		3,067,693		—		2005		N/A
10970 Windfern Road Land	Houston, TX		—		1,626,185			—		22,132		1,648,317		—		1,648,317		—		2007		N/A
Beltway 8 @Bammel Bus Park Land	Houston, TX		—		1,072,634			—		8,882		1,081,517		—		1,081,517		—		2007		N/A
Central Green Land — Tract 5	Houston, TX		—		4,169,183			—		188,818		4,358,001		—		4,358,001		—		2007		N/A
Greens Crossing Land	Houston, TX		—		2,476,892			—		11,987		2,488,880		—		2,488,880		—		2007		N/A
Rankin Road Land	Houston, TX		—		5,756,865			—		6,144		5,763,008		—		5,763,008		—		2007		N/A
Windfern Drive Land	Houston, TX		—		1,223,132			—		21,533		1,244,665		—		1,244,665		—		2006		N/A
Noxell Land	Hunt Valley, MD		—		2,040,690			—		0		2,040,690		—		2,040,690		—		2001		N/A
7024 AC Skinner Parkway	Jacksonville, FL		—		751,448			—		73,504		824,952		—		824,952		—		1995		N/A
Belfort Road	Jacksonville, FL		—		492,908			—		85,585		578,493		—		578,493		—		1998		N/A
Liberty Business Park Land	Jacksonville, FL		—		456,269			—		81,847		538,116		—		538,116		—		1995		N/A
Salisbury Road Land	Jacksonville, FL		—		1,402,337			—		191,977		1,594,314		—		1,594,314		—		2000		N/A
Skinner Land Parcel B	Jacksonville, FL		—		2,295,790			—		1,230,144		3,525,934		—		3,525,934		—		2005		N/A
Kent County, UK	Kent County, UK		—		—			—		33,743,050		33,743,050		—		33,743,050		—		2006		N/A
Boulders Business Center Land	Lehigh, PA		—		6,398,815			—		5,189,466		11,588,281		—		11,588,281		—		2004		N/A
Commodore Business Park	Logan, NJ		—		792,118			—		873,151		1,665,269		—		1,665,269		—		1995		N/A
Quarry Ridge Land	Malvern, PA		—		4,774,994			—		6,092,321		10,867,315		—		10,867,315		—		2001		N/A
Park Place South Land	Milwaukee, WI		—		1,290,032			—		2,483,774		3,773,806		—		3,773,806		—		1999		N/A
Monarch Towne Center Land	Mirarar, FL		—		6,085,337			—		124,502		6,209,839		—		6,209,839		—		2006		N/A
South 27th Street Land	Oak Creek, WI		—		2,169,232			—		1,476,056		3,645,288		—		3,645,288		—		2006		N/A
Beachline Industrial Park Land	Orlando, FL		—		1,306,285			—		134,382		1,440,667		—		1,440,667		—		2006		N/A
Maitland Summit Park Land	Orlando, FL		—		4,415,496			—		20,425		4,435,921		—		4,435,921		—		2005		N/A
JFK & Arch Parking Lots/Land (West)	Philadelphia, PA		—		4,792,286			—		5,538,129		10,330,415		—		10,330,415		—		2000		N/A
Cotton Center Land	Phoenix, AZ		—		4,449,689			—		40		4,449,729		—		4,449,729		—		2007		N/A
Eastport IX	Richmond, VA		—		211,627			—		3,325		214,952		—		214,952		—		1997		N/A
Eastport VIII	Richmond, VA		—		382,698			—		3,325		386,023		—		386,023		—		1997		N/A
IRS Distribution Ctr Land	Richmond, VA		—		12,981	#		—		—		12,981		—		12,981		—		1995		N/A
Woodlands Center Land	Sandston, VA		—		148,314			—		13,879		162,193		—		162,193		—		1996		N/A
Northsight Land (LPLP)	Scottsdale, AZ		—		6,176,464			—		2,204,597		8,381,061		—		8,381,061		—		2005		N/A
Old Scotland Road Land	Shippensburg, PA		—		8,322,686			—		1,897,285		10,219,971		—		10,219,971		—		2007		N/A
Bridgeway II Land	Suffolk, VA		—		603,391			—		1,981,044		2,584,435		—		2,584,435		—		2005		N/A
Suffolk Land	Suffolk, VA		—		2,715,714			—		571,339		3,287,053		—		3,287,053		—		2006		N/A
6119 W. Linebaugh Avenue	Tampa, FL		—		180,136			—		18,070		198,205		—		198,205		—		2000		N/A
Renaissance Park Land	Tampa, FL		—		1,995,375			—		420,882		2,416,257		—		2,416,257		—		2007		N/A
Tampa Triangle Land	Tampa, FL		—		10,358,826			—		1,234,140		11,592,966		—		11,592,966		—		2006		N/A
Subtotal Land Held for Development		$	229,950	$	81,716,995		$	—	$	67,543,831	$	247,123,454	$	—	$	247,123,454	$	—
Total All Properties		$	82,844,232	$	877,939,842		$	1,822,689,613	$	3,008,001,959	$	1,043,624,707	$	4,762,869,335	$	5,806,494,042	$	863,609,256

* Denotes property is collateralized under mortgages with American General, USG Annuity and Life, Metropolitan Life and LaSalle Bank totaling $159.8 million.

114

SCHEDULE III

LIBERTY PROPERTY LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
(In thousands)

A summary of activity for real estate and accumulated depreciation is as follows:

	Year Ended December 31,
	2007			2006			2005
REAL ESTATE:
Balance at beginning of year	$	5,136,024		$	4,680,178		$	4,332,444
Additions		945,663			823,880			653,167
Disposition of property		(275,193	)		(368,034	)		(305,433	)
Balance at end of year	$	5,806,494		$	5,136,024		$	4,680,178
ACCUMULATED DEPRECIATION:
Balance at beginning of year	$	786,778		$	715,983		$	664,652
Depreciation expense		127,762			121,778			120,496
Disposition of property		(50,931	)		(50,983	)		(69,165	)
Balance at end of year	$	863,609		$	786,778		$	715,983

115

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The Company’s management, with the participation of its Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of its disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based on this evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures, as of the end of the period covered by this report, were functioning effectively to provide reasonable assurance that information required to be disclosed by the Company in its reports filed or submitted under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in SEC’s rules and forms and (ii) accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, or persons performing similar function, as appropriate to allow timely decisions regarding required disclosure.

Management’s Annual Reports on Internal Control Over Financial Reporting

Management’s Annual Reports on Internal Control Over Financial Reporting, which appear on pages 38 and 80, are incorporated by reference herein.

Attestation Reports of the Registered Public Accounting Firm

The Attestation Reports of the Registered Public Accounting Firm, which appear on pages 39, 40, 81, and 82, are incorporated by reference herein.

Changes in Internal Controls

There were no changes in the Company’s internal control over financial reporting during the quarter ended December 31, 2007 that have materially affected or are reasonable likely to materially affect the Company’s internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

None.

116

PART III

ITEM 10. TRUSTEES, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required by Item 10 shall be included in the Proxy Statement to be filed relating to the Company’s 2008 Annual Meeting of Shareholders and is incorporated herein by reference.

ITEM 11. EXECUTIVE COMPENSATION

The information required by Item 11 shall be included in the Proxy Statement to be filed relating to the Company’s 2008 Annual Meeting of Shareholders and is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS

The information required by Item 12 shall be included in the Proxy Statement to be filed relating to the Company’s 2008 Annual Meeting of Shareholders and is incorporated herein by reference.

Securities Authorized for Issuance Under Equity Compensation Plans

The information required by Item 12 shall be included in the Proxy Statement to be filed relating to the Company’s 2008 Annual Meeting of Shareholders and is incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND TRUSTEE INDEPENDENCE

The information required by Item 13 shall be included in the Proxy Statement to be filed relating to the Company’s 2008 Annual Meeting of Shareholders and is incorporated herein by reference.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required by Item 14 shall be included in the Proxy Statement to be filed relating to the Company’s 2008 Annual Meeting of Shareholders and is incorporated herein by reference.

117

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

The following consolidated financial statements of Liberty Property Trust and Liberty Property Limited Partnership are included in Item 8.

1. REPORTS OF ERNST & YOUNG LLP, INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM AND CONSOLIDATED FINANCIAL STATEMENTS

Management’s Annual Report on Internal Control Over Financial Reporting — Liberty Property Trust

Reports of Independent Registered Public Accounting Firm — Liberty Property Trust

Financial Statements — Liberty Property Trust

Balance Sheets:

Liberty Property Trust Consolidated as of December 31, 2007 and 2006

Statements of Operations:

Liberty Property Trust Consolidated for the years ended December 31, 2007, 2006, and 2005

Statements of Shareholders’ Equity:

Liberty Property Trust Consolidated for the years ended December 31, 2007, 2006, and 2005

Statements of Cash Flows:

Liberty Property Trust Consolidated for the years ended December 31, 2007, 2006, and 2005

Notes to Consolidated Financial Statements — Liberty Property Trust

Management’s Annual Report on Internal Control Over Financial Reporting — Liberty Property Limited Partnership

Reports of Independent Registered Public Accounting Firm — Liberty Property Limited Partnership

Financial Statements — Liberty Property Limited Partnership

Balance Sheets:

Liberty Property Limited Partnership Consolidated as of December 31, 2007 and 2006

Statements of Operations:

Liberty Property Limited Partnership Consolidated for the years ended December 31, 2007, 2006, and 2005

Statements of Owners’ Equity:

Liberty Property Limited Partnership Consolidated for the years ended December 31, 2007, 2006, and 2005

Statements of Cash Flows:

Liberty Property Limited Partnership Consolidated for the years ended December 31, 2007, 2006, and 2005

Notes to Consolidated Financial Statements — Liberty Property Limited Partnership

2. FINANCIAL STATEMENT SCHEDULES:

Schedule III — Real Estate and Accumulated Depreciation as of December 31, 2007 for Liberty Property Trust

All other schedules are omitted because they are either not required or the required information is shown in the financial statements or notes thereto.

Schedule III — Real Estate and Accumulated Depreciation as of December 31, 2007 for Liberty Property Limited Partnership

All other schedules are omitted because they are either not required or the required information is shown in the financial statements or notes thereto.

118

3. EXHIBITS

The following exhibits are filed herewith or are incorporated by reference to exhibits previously filed.

Exhibit No.	Description
2.1	Agreement and Plan Merger, dated as of July 23, 2007, by and among Liberty Property Trust, Liberty Property Limited Partnership, Liberty Acquisition LLC, Republic Property Trust and Republic Property Limited Partnership. (Incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K of the Registrants, filed with the Securities and Exchange Commission on July 24, 2007).
3.1.1	Amended and Restated Declaration of Trust of the Trust (Incorporated by reference to Exhibit 3.1.1 filed with the Registrants’ Current Report on Form 8-K filed with the Commission on June 25, 1997 (the “June 1997 Form 8-K”)).
3.1.3	Articles Supplementary to the Amended and Restated Declaration of Trust of the Trust Relating to Designation, Preferences, and Rights of Series A Junior Participating Preferred Shares of the Trust. (Incorporated by reference to Exhibit 3.1.3 filed with the Registrants’ Annual Report on Form 10-K for the fiscal year ended December 3l, 1997).
3.1.4	Articles Supplementary to the Amended and Restated Declaration of Trust of the Trust relating to the 9.25% Series B Cumulative Redeemable Preferred Shares of Beneficial Interest (Incorporated by reference to Exhibit 3.1.2 filed with the Registrants’ Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 1999 (the “Second Quarter 1999 Form 10-Q”)).
3.1.6	Articles Supplementary to the Amended and Restated Declaration of Trust of the Trust relating to the 7.625% Series D Cumulative Redeemable Preferred Shares of Beneficial Interest. (Incorporated by reference to Exhibit 3.1.1 filed with the Registrants’ Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2002 (the “Second Quarter 2002 Form 10-Q”)).
3.1.7	Articles of Amendment to Amended and Restated Declaration of Trust of the Trust, filed with the State Department of Assessments and Taxation of Maryland on June 21, 2004. (Incorporated by reference to Exhibit 3.1 with Registrants’ Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2004 (the “Second Quarter 2004 Form 10-Q”)).
3.1.8	Restatement of Amended Restated Declaration of Trust of the Trust, filed with the State Department of Assessments and Taxation of Maryland on June 21, 2004. (Incorporated by reference to Exhibit 3.2 to the Second Quarter 2004 Form 10-Q).
3.1.9	Articles Supplementary, as filed with the State Department of Assessments and Taxation of Maryland on September 1, 2004 (Incorporated by reference to Exhibit 3(i) to the Current Report on Form 8-K of the Registrants, filed with the Commission on September 2, 2004 (the “September 2, 2004 Form 8-K”))
3.1.10	Articles Supplementary to the Amended and Restated Declaration of Trust of the Trust relating to the 7.00% Series E Cumulative Redeemable Preferred Shares of Beneficial Interest. (Incorporated by reference to Exhibit 3(i) to the Current Report on Form 8-K of the Registrants, filed with the Securities and Exchange Commission on June 17, 2005 (the “June 17, 2005 Form 8-K”)).
3.1.11	Articles Supplementary to the Amended and Restated Declaration of Trust of the Trust relating to the 6.65% Series F Cumulative Redeemable Preferred Shares of Beneficial Interest. (Incorporated by reference to Exhibit 3(i) to the Current Report on Form 8-K of the Registrants, filed with the Securities and Exchange Commission on June 30, 2005 (the “June 30, 2005 Form 8-K”)).

119

Exhibit No.	Description
3.1.12	Articles Supplementary to the Amended and Restated Declaration of Trust of the Trust relating to the 6.65% Series F Cumulative Redeemable Preferred Shares of Beneficial Interest. (Incorporated by reference to Exhibit 3(i) to the Current Report on Form 8-K of the Registrants, filed with the Securities and Exchange Commission on August 24, 2005.)
3.1.13	Articles Supplementary to the amended and Restated Declaration of Trust of the Trust relating to the 6.70% Series G Cumulative Redeemable Shares of Beneficial Interest. (Incorporated by reference to Exhibit 3(i) to the Current Report on Form 8-K of the Registrants, filed with the Securities and Exchange Commission on December 18, 2006 (the “December 18, 2006 Form 8-K”)).
3.1.14	Articles Supplementary to the Amended and Restated Declaration of Trust of the Trust relating to the 7.40% Series H Cumulative Redeemable Preferred Partnership Interests. (Incorporated by reference to Exhibit 3(i) to the Current Report on Form 8-K of the Registrants, filed with the Securities and Exchange Commission on August 23, 2007 (the “August 23, 2007 Form 8-K”)).
3.1.15	Second Restated and Amended Agreement of Limited Partnership of the Operating Partnership, dated as of October 22, 1997 (Incorporated by reference to Exhibit 3.1.1 filed with the Registrants Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 1997 (the “Third Quarter 1997 Form 10-Q”)).
3.1.16	First Amendment to Second Restated and Amended Agreement of Limited Partnership of the Operating Partnership. (Incorporated by reference to Exhibit 3.1.1 to the Second Quarter 1999 Form 10-Q).
3.1.17	Second Amendment to Second Restated and Amended Agreement of Limited Partnership of the Operating Partnership. (Incorporated by reference to Exhibit 3.1.2 to the First Quarter 2000 Form 10-Q).
3.1.18	Third Amendment to Second Restated and Amended Agreement of Limited Partnership of the Operating Partnership (Incorporated by reference to Exhibit 3.1.2 to the Second Quarter Form 2002 10-Q).
3.1.19	Fourth Amendment to the Second Amended and Restated Agreement of Limited Partnership of the Operating Partnership (Incorporated by reference to Exhibit 10 to the September 2, 2004 Form 8-K).
3.1.20	Fifth Amendment to the Second Amended and Restated Agreement of Limited Partnership of Liberty Property Limited Partnership. (Incorporated by reference to Exhibit 10 to the June 17, 2005 8-K).
3.1.21	Sixth Amendment to the Second Amended and Restated Agreement of Limited Partnership of Liberty Property Limited Partnership. (Incorporated by reference to Exhibit 10 to the June 30, 2005 8-K).
3.1.22	Amendment No. 1 to the Sixth Amendment to the Second Amended and Restated Agreement of Limited Partnership of Liberty Property Limited Partnership. (Incorporated by reference to Exhibit 10 to the Current Report on Form 8-K of the Registrants, filed with the Securities and Exchange Commission on August 24, 2005.)
3.1.23	Amendment No. 2 to the Sixth Amendment to the Second Amended and Restated Agreement of Limited Partnership of Liberty Property Limited Partnership. (Incorporated by reference to Exhibit 10 to the Current Report on Form 8-K of the Registrants, filed with the Securities and Exchange Commission on December 23, 2005.)
3.1.24	Seventh Amendment to the Second Amended and Restated Agreement of Limited Partnership of Liberty Property Limited Partnership. (Incorporated by reference to Exhibit 10 to the December 18, 2006 Form 8-K).

120

Exhibit No.	Description
3.1.25	Eighth Amendment to the Second Amendment and Restated Agreement of Limited Partnership of Liberty Property Limited Partnership. (Incorporated by reference to Exhibit 10 to the August 23, 2007 Form 8-K).
3.1.26*	Amended and Restated Schedule A to the Second Restated and Amended Agreement of Limited Partnership of the Operating Partnership.
3.1.27	Liberty Property Trust First Amended and Restated By-Laws of the Trust, as Amended on December 6, 2007 (Incorporated by reference to Exhibit 3.1 filed with the Commission on December 12, 2007) to the Registrants’ Current Report on Form 8-K.
4.1	Rights Agreement, dated as of December 17, 1997, by and between the Trust and the Rights Agent (Incorporated by reference to Exhibit 1 filed with the Trust’s Registration Statement on Form 8-A filed with the Commission on December 23, 1997).
4.1.1	Amendment, dated April 27, 2006, to the First Amended and Restated Rights Agreement, dated as of September 14, 2004 (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of the Registrant filed with the Commission on May 1, 2006).
4.2	Indenture (the “First Indenture”), dated as of August 14, 1997, between the Operating Partnership, as Obligor, and The First National Bank of Chicago (“First Chicago”), as Trustee (Incorporated by reference to Exhibit 10.1 filed with the Third Quarter 1997 Form 10-Q).
4.3	First Supplemental Indenture, dated as of August 14, 1997, between the Operating Partnership, as Issuer, and First Chicago, as Trustee, supplementing the First Indenture and relating to $100,000,000 principal amount of the 7.10% Senior Notes due 2004 and $100,000,000 principal amount of the 7.25% Senior Notes due 2007 of the Operating Partnership (Incorporated by reference to Exhibit 10.2 filed with the Third Quarter 1997 Form 10-Q).
4.4	Senior Indenture (the “Second Indenture”), dated as of October 24, 1997, between the Operating Partnership, as Obligor, and First Chicago, as Trustee (Incorporated by reference to Exhibit 10.3 filed with the Third Quarter 1997 Form 10-Q).
4.5	First Supplemental Indenture, dated as of October 24, 1997, between the Operating Partnership, as Issuer, and First Chicago, as Trustee, supplementing the Second Indenture and relating to the Fixed Rate and Floating Rate Medium-Term Notes due Nine Months or More from Date of Issue of the Operating Partnership (Incorporated by reference to Exhibit 10.4 filed with the Third Quarter 1997 Form 10-Q).
4.6	Second Supplemental Indenture, dated as of January 12, 1998, between the Operating Partnership, as Issuer, and First Chicago, as Trustee, supplementing the Second Indenture, and relating to the Fixed Rate and Floating Rate Medium-Term Notes due Nine Months or more from Date of Issue of the Operating Partnership (Incorporated by reference to Exhibit 4.1 filed with the Registrants’ Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 1998 (the “First Quarter 1998 Form 10-Q”)).
4.7	Third Supplemental Indenture, dated as of April 20, 1999, between the Operating Partnership, as Issuer, and the First National Bank of Chicago, as Trustee, supplementing the Second Indenture and relating to the $250,000,000 principal amount of 7.75% Senior Notes, due 2009 of the Operating Partnership (Incorporated by reference to Exhibit 4 filed with the Registrants’ Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 1999 (the “First Quarter 1999 Form 10-Q”)).
4.8	Fourth Supplemental Indenture, dated as of July 26, 2000, between the Operating Partnership, as Issuer, and Bank One Trust Company, N.A., as Trustee, supplementing the Senior Indenture, dated as of October 24, 1997, between the Operating Partnership, as Obligor, and Bank One Trust Company, N.A. (as successor to the First National Bank of Chicago), as Trustee, and relating to $200,000,000 principal amount of 8.5% Senior Notes due 2010 of the Operating Partnership. (Incorporated by reference to Exhibit 4 to the Second Quarter 2000 Form 10-Q).

121

Exhibit No.	Description
4.9	Fifth Supplemental Indenture, dated as of March 14, 2001, between the Operating Partnership, as Issuer, and Bank One Trust Company, N.A., as Trustee, supplementing the Senior Indenture, dated as of October 24, 1997, between the Operating Partnership, as Obligor, and Bank One Trust Company, N.A. (as successor to the First National Bank of Chicago), as Trustee, and relating to $250,000,000 principal amount of 7.25% Senior Notes due 2011 of the Operating Partnership. (Incorporated by reference to Exhibit 4.10 filed with the Registrants’ Annual Report on Form 10-K for the fiscal year ended December 31, 2000).
4.10	Sixth Supplemental Indenture, dated as of August 22, 2002, between Liberty Property Limited Partnership, as Issuer, and Bank One Trust Company, N.A., as Trustee, supplementing the Senior Indenture, dated as of October 24, 1997, between Liberty Property Limited Partnership, as Obligor, and Bank One Trust Company, N.A. (as successor to the First National Bank of Chicago), as Trustee, and relating to $150,000,000 principal amount of 6.375% Senior Notes due 2012 of Liberty Property Limited Partnership. (Incorporated by reference to Exhibit 3.1.1 filed with the Registrants’ Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2002 (the “Third Quarter 2002 Form 10-Q”)).
4.11	Seventh Supplemental Indenture, dated as of August 10, 2004, between Liberty Property Limited Partnership, as Issuer, and Bank One Trust Company, N.A., as Trustee, supplementing the Senior Indenture, dated as of October 24, 1997, between Liberty Property Limited Partnership, as Obligor, and Bank One Trust Company, National Association. (as successor to the First National Bank of Chicago), as Trustee, and relating to $200,000,000 principal amount of 5.65% Senior Notes due 2012 of Liberty Property Limited Partnership. (Incorporated by reference to Exhibit 4.1.2 filed with the Registrants’ Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2004 (the “Third Quarter 2004 Form 10-Q”)).
4.12	Eighth Supplemental Indenture, dated as of March 1, 2005, between Liberty Property Limited Partnership, as Issuer, and Bank One Trust Company, as Trustee, supplementing the Senior Indenture, dated as of October 24, 1997, between Liberty Property Limited Partnership, as Obligor, and Bank One Trust Company, National Association (as successor to the First National Bank of Chicago), as Trustee, and relating to $300,000,000 principal amount of 5.125% Senior Notes due 2015 of Liberty Property Limited Partnership. (Incorporated by reference to Exhibit 4.2 filed with the Registrants’ Current Report on Form 8-K/A filed with the Commission on March 1, 2005 (the “March 2005 Form 8-K”)).
4.13	Ninth Supplemental Indenture, dated as of December 18, 2006, between Liberty Property Limited Partnership, as Issuer, and The Bank of New York Trust Company, N.A., as Trustee, supplementing the Senior Indenture, dated as of October 24, 1997, between Liberty Property Limited Partnership, as Obligor, and The Bank of New York Trust Company, N.A., (as successor to J.P. Morgan Trust Company, National Association and the First National Bank of Chicago), as Trustee, and relating to $300,000,000 principal amount of 5.50% Senior Notes due 2016 of Liberty Property Limited Partnership. (Incorporated by reference to Exhibit 4.13 to the Registrants’ Annual Report on Form 10-K for the fiscal year ended December 31, 2006).
4.14	Tenth Supplemental Indenture, dated as of September 25, 2007, between Liberty Property Limited Partnership, as Issuer, and The Bank of New York Trust Company, N.A., as Trustee, supplementing the Senior Indenture, dated as of October 24, 1997, between Liberty Property Limited Partnership, as Obligor, and The Bank of New York Trust Company, N.A., (as successor to J.P. Morgan Trust Company, National Association and the First National Bank of Chicago), as Trustee, and relating to $300,000,000 principal amount of 6.625% Senior Notes due 2017 of Liberty Property Limited Partnership. (Incorporated by reference to Exhibit 4.1 to the Registrants’ Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2007).
4.15	Note, Relating to the Issuance by the Operating Partnership, on January 22, 1998, of $75 Million Principal Amount of its 6.375% Medium-Term Notes due 2013, Putable/Callable 2003 (Incorporated by reference to Exhibit 4.2 filed with the First Quarter 1998 Form 10-Q).
4.16	Note, Relating to the Issuance by the Operating Partnership, on January 23, 1998, of $100 Million Principal Amount of its 7.50% Medium-Term Notes due 2018 (Incorporated by reference to Exhibit 4.3 filed with the First Quarter 1998 Form 10-Q).

122

Exhibit No.	Description
4.17	Note, Relating to the Issuance by the Operating Partnership, on June 5, 1998, of $100 Million Principal Amount of its 6.60% Medium-Term Notes due 2002. (Incorporated by reference to Exhibit 4 filed with the Registrants’ Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 1998 (the “Second Quarter 1998 Form 10-Q”)).
4.18	Note, Relating to the Issuance by the Operating Partnership on November 24, 1998, of $20 Million Principal Amount of its 8.125% Medium-Term Notes due January 15, 2009 (Incorporated by reference to Exhibit 4.11 filed with the Registrants’ Annual Report on Form 10-K for the fiscal year ended December 31, 1998).
4.19	Liberty Property Trust Amended and Restated Share Incentive Plan as amended effective May 17, 2007. (Incorporated by reference to Appendix A to the Registrant’s Definitive Proxy Statement for the Annual Meeting of Shareholders held on May 17, 2007, filed with the Securities and Exchange Commission on April 17, 2007.)
10.2	Contribution Agreement (Incorporated by reference to Exhibit 10.5 filed with the Form S-11).
10.3	Amended and Restated Limited Partnership Agreements of Pre-existing Pennsylvania Partnerships (Incorporated by reference to Exhibit 10.6 filed with the Form S-11).
10.4	Agreement of Sale for the Acquisition Properties (Incorporated by reference to Exhibit 10.7 filed with the Form S-11).
10.5	Option Agreement and Right of First Offer (Incorporated by reference to Exhibit 10.8 filed with the Form S-11).
10.6	Form of Indemnity Agreement (Incorporated by reference to Exhibit 10.9 filed with the Form S-11).
10.7	Contribution Agreement among the Trust, the Operating Partnership and the Contributing Owners described therein, related to the Lingerfelt Properties (Incorporated by reference to Exhibit 10.1 filed with the Registrants’ Current Report on Form 8-K filed with the Commission on March 3, 1995).
10.8	Amended and Restated Credit Agreement, dated as of December 22, 2005, by and among the Operating Partnership, the Trust, certain affiliated co-borrowers, with Bank of America, N.A. as Administrative Agent, JPMorgan Chase Bank, N.A., as Syndication Agent, Wachovia Bank, National Association, SunTrust Bank and Citizens Bank of Pennsylvania, as Documentation Agents, PNC Bank, National Association and Wells Fargo Bank, National Association, as Managing Agents, Banc of America Securities LLC and J.P. Morgan Securities Inc., as Joint Lead Arrangers and Joint Bookrunners, and the lenders a party thereto. (Incorporated by reference to Exhibit 10.8 filed with Registrants’ Annual Report on Form 10-K for the year ended December 31, 2006.
10.9	Liberty Property Trust — Amended Management Severance Plan. (Incorporated by reference to Exhibit 10.9 filed with Registrants’ Annual Report on Form 10-K for the year ended December 31, 2001).
10.10	Liberty Property Trust — Employee Stock Purchase Plan. (Incorporated by reference to Exhibit 10.14 filed with the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2000).
10.11	Description of Compensation of Non-Employee Trustees. (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of the Registrants filed with the Commission on February 23, 2005.)
10.12	Form of Restricted Share Grant under the Liberty Property Trust Amended and Restated Share Incentive Plan. (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of the Registrants filed with the Commission on February 24, 2005 (the “February 24, 2005 8-K”)).

123

Exhibit No.	Description
10.13	Form of Option Grant under the Liberty Property Trust Amended and Restated Share Incentive Plan. (Incorporated by reference to Exhibit 10.2 to the February 24, 2005 8-K).
10.14	Certain Elements of the Liberty Property Trust Executive Compensation Program. (Incorporated by reference to Exhibit 10.1 to the filed with the Registrants’ Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2006).
10.15	Amended and Restated Limited Partnership of Liberty/Commerz 1701 JFK Boulevard Limited Partnership, dated as of April 11, 2006, by and among Liberty Property Philadelphia Corporation IV East, as general partner, and the Operating Partnership and 1701 JFK Boulevard Philadelphia, L.P. as limited partners. (Incorporated by reference to Exhibit 10.3 filed with the Registrants’ Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2006 (the “Second Quarter 2006 Form 10-Q)).
10.16	NOI Support Agreement, dated as of April 11, 2006, by Liberty Property Limited Partnership in favor of Liberty/Commerz 1701 JFK Boulevard, L.P. and 1701 JFK Boulevard Philadelphia, L.P. (Incorporated by reference to Exhibit 10.4 filed with the Registrants’ Second Quarter 2006 Form 10-Q).
10.17	Completion and Payment Agreement and Guaranty, dated as of April 11, 2006, by the Operating Partnership for the benefit of 1701 JFK Boulevard Philadelphia, L.P. and Liberty/Commerz 1701 JFK Boulevard L.P. (Incorporated by reference to Exhibit 10.5 filed with the Registrants’ Second Quarter 2006 Form 10-Q).
10.18* +	Agreement of Limited Partnership of Liberty Washington, L.P. by and between Liberty Washington Venture, LLC and New York State Common Retirement Fund dated as of October 4, 2007.
10.19* +	Contribution Agreement among New York State Common Retirement Fund and Liberty Property Limited Partnership and Liberty Washington, L.P. dated October 4, 2007.
12*	Statement re: Computation of Ratios.
21*	Subsidiaries.
23.1*	Consent of Ernst & Young LLP relating to the Trust.
23.2*	Consent of Ernst & Young LLP relating to the Operating Partnership.
31.1*	Certifications of the Chief Executive Officer of Liberty Property Trust required by Rule 13a-14(a) under the Securities Exchange Act of 1934.
31.2*	Certifications of the Chief Financial Officer of Liberty Property Trust required by Rule 13a-14(a) under the Securities Exchange Act of 1934.
31.3*	Certifications of the Chief Executive Officer of Liberty Property Trust, in its capacity as the general partner of Liberty Property Limited Partnership, required by Rule 13a-14(a) under the Securities Exchange Act of 1934.
31.4*	Certifications of the Chief Financial Officer of Liberty Property Trust, in its capacity as the general partner of Liberty Property Limited Partnership, required by Rule 13a-14(a) under the Securities Exchange Act of 1934.
32.1*	Certifications of the Chief Executive Officer of Liberty Property Trust required under Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended. (This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section. Further, this exhibit shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.)

124

Exhibit No.	Description
32.2*	Certifications of the Chief Financial Officer of Liberty Property Trust required by Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended. (This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section. Further, this exhibit shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.)
32.3*	Certifications of the Chief Executive Officer of Liberty Property Trust, in its capacity as the general partner of Liberty Property Limited Partnership, required by Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended. (This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section. Further, this exhibit shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.)
32.4*	Certifications of the Chief Financial Officer of Liberty Property Trust, in its capacity as the general partner of Liberty Property Limited Partnership, required by Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended. (This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section. Further, this exhibit shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.)

*	Filed herewith
+	Confidential treatment has been requested with respect to portions of this exhibit pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.

125

SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	LIBERTY PROPERTY TRUST
Date: February 28, 2008		By:	/s/ WILLIAM P. HANKOWSKY
			WILLIAM P. HANKOWSKY
			CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

/s/ WILLIAM P. HANKOWSKY	Chairman of the Board of Trustees, President and Chief Executive Officer (Principal Executive Officer)	February 28, 2008
William P. Hankowsky
/s/ GEORGE J. ALBURGER, JR.	Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)	February 28, 2008
George J. Alburger, Jr.
/s/ M. LEANNE LACHMAN	Trustee	February 28, 2008
M. Leanne Lachman
/s/ FREDERICK F. BUCHHOLZ	Trustee	February 28, 2008
Frederick F. Buchholz
/s/ J. ANTHONY HAYDEN	Trustee
J. Anthony Hayden		February 28, 2008
/s/ DAVID L. LINGERFELT	Trustee	February 28, 2008
David L. Lingerfelt
/s/ JOHN A. MILLER, CLU	Trustee	February 28, 2008
John A. Miller, CLU
/s/STEPHEN B. SIEGEL	Trustee	February 28, 2008
Stephen B. Siegel
/s/ THOMAS C. DELOACH, JR.	Trustee
Thomas C. DeLoach, Jr.		February 28, 2008
/s/ DANIEL P. GARTON	Trustee	February 28, 2008
Daniel P. Garton
/s/ JOSE A. MEJIA	Trustee	February 28, 2008
Jose A. Mejia

126

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	LIBERTY PROPERTY LIMITED PARTNERSHIP BY: Liberty Property Trust General Partner
Date: February 28, 2008		By:	/s/ WILLIAM P. HANKOWSKY
			WILLIAM P. HANKOWSKY
			CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

/s/ WILLIAM P. HANKOWSKY	Chairman of the Board of Trustees, President and Chief Executive Officer (Trustee of the General Partner)	February 28, 2008
William P. Hankowsky
/s/ GEORGE J. ALBURGER, JR.	Executive Vice President and Chief Financial Officer (Trustee of the General Partner)	February 28, 2008
George J. Alburger, Jr.
/s/ M. LEANNE LACHMAN	Trustee of the General Partner	February 28, 2008
M. Leanne Lachman
/s/ FREDERICK F. BUCHHOLZ	Trustee of the General Partner	February 28, 2008
Frederick F. Buchholz
/s/ J. ANTHONY HAYDEN	Trustee of the General Partner	February 28, 2008
J. Anthony Hayden
/s/ DAVID L. LINGERFELT	Trustee of the General Partner	February 28, 2008
David L. Lingerfelt
/s/ JOHN A. MILLER, CLU	Trustee of the General Partner	February 28, 2008
John A. Miller, CLU
/s/ STEPHEN B. SIEGEL	Trustee of the General Partner	February 28, 2008
Stephen B. Siegel
/s/ THOMAS C. DELOACH, JR.	Trustee of the General Partner	February 28, 2008
Thomas C. DeLoach, Jr.
/s/ DANIEL P. GARTON	Trustee of the General Partner	February 28, 2008
Daniel P. Garton
/s/ JOSE A. MEJIA	Trustee of the General Partner	February 28, 2008
Jose A. Mejia

127

EXHIBIT INDEX

Exhibit No.	Description
3.1.26	Amended and Restated Schedule A to the Second Restated and Amended Agreement of Limited Partnership of the Operating Partnership.
10.18 +	Agreement of Limited Partnership of Liberty Washington, L.P. by and between Liberty Washington Venture, LLC and New York State Common Retirement Fund dated as of October 4, 2007.
10.19 +	Contribution Agreement among New York State Common Retirement Fund and Liberty Property Limited Partnership and Liberty Washington, L.P. dated October 4, 2007.
12	Statement re: Computation of Ratios.
21	Subsidiaries.
23.1	Consent of Ernst & Young LLP relating to the Trust.
23.2	Consent of Ernst & Young LLP relating to the Operating Partnership.
31.1	Certifications of the Chief Executive Officer of Liberty Property Trust required by Rule 13a-14(a) under the Securities Exchange Act of 1934.
31.2	Certifications of the Chief Financial Officer of Liberty Property Trust required by Rule 13a-14(a) under the Securities Exchange Act of 1934.
31.3	Certifications of the Chief Executive Officer of Liberty Property Trust, in its capacity as the general partner of Liberty Property Limited Partnership, required by Rule 13a-14(a) under the Securities Exchange Act of 1934.
31.4	Certifications of the Chief Financial Officer of Liberty Property Trust, in its capacity as the general partner of Liberty Property Limited Partnership, required by Rule 13a-14(a) under the Securities Exchange Act of 1934.
32.1	Certifications of the Chief Executive Officer of Liberty Property Trust required under Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended. (This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section. Further, this exhibit shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.)
32.2	Certifications of the Chief Financial Officer of Liberty Property Trust required by Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended. (This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section. Further, this exhibit shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.)
32.3	Certifications of the Chief Executive Officer of Liberty Property Trust, in its capacity as the general partner of Liberty Property Limited Partnership, required by Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended. (This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section. Further, this exhibit shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.)

128

Exhibit No.

Description

32.4

Certifications of the Chief Financial Officer of Liberty Property Trust, in its capacity as the general partner of Liberty Property Limited Partnership, required by Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended. (This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section. Further, this exhibit shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.

+ Confidential treatment has been requested with respect to portions of this exhibit pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.

129

EX-3.1.26

Exhibit 3.1.26

SCHEDULE ‘A’

Liberty Property Limited Partnership
Partnership Interests
As of June 30, 2007

	Number of
	Partnership
Limited Partners	Interests		%
Balitsaris, Peter		58,542		0.0613	%
Carr, Clair		115,000		0.1205	%
Castorina, John		14,491		0.0152	%
Denny, Joseph		260,250		0.2727	%
Felix, Jill		195,043		0.2044	%
Fenza, Robert		195,043		0.2044	%
Fitzgerald, Ward		14,491		0.0152	%
Gildea, Larry		93,319		0.0978	%
Goldschmidt, Robert		22,895		0.0240	%
Hagan, Michael		14,491		0.0152	%
Hammers, David		244,426		0.2561	%
Keil, Bob		14,491		0.0152	%
Kline, Earl		19,128		0.0200	%
Lutz, Jim		37,312		0.0391	%
Mazzerralli, James		14,491		0.0152	%
Messaros, Sharron		7,245		0.0076	%
Morrissey, Mary Beth		14,491		0.0152	%
Price, Leslie		87,668		0.0919	%
Reichert, Joseph		27,242		0.0285	%
Marital Trust for Susannah Rouse		460,418		0.4824	%
Trust for Congdon Children		95,347		0.0999	%
Trust for Hammers Children		95,348		0.0999	%
Trust for Mary Rouse		13,621		0.0143	%
Trust for Anne Rouse		13,621		0.0143	%
Trust for Rouse Younger Children		81,726		0.0856	%
Trust for Lori Hammers		5,506		0.0058	%
Weitzmann, Mike		42,312		0.0443	%
Liberty Special Purpose Trust		10,574		0.0111	%
Thomas, Rebecca		8,076		0.0085	%
Trust for J. Ryan Lingerfelt		15,625		0.0164	%
Trust for Justin M. Lingerfelt		15,625		0.0164	%
Trust for Daniel K. Lingerfelt		15,625		0.0164	%
Trust for Catherine E. Lingerfelt		15,625		0.0164	%
Lingerfelt, Alan T.		317,500		0.3327	%
Lingerfelt, L. Harold		164,375		0.1722	%
Lingerfelt, David L.		30,674		0.0321	%

Page 1

Liberty Property Limited Partnership
Partnership Interests — Continued
As of June 30, 2007

	Number of
	Partnership
Limited Partners	Interests		%
Estate of Morris U. Ferguson		6,000		0.0063	%
Lingerfelt, Carl C.		10,900		0.0114	%
Wright, Murray H.		7,500		0.0079	%
Latimer, Erle Marie		12,500		0.0131	%
Samet, Norman G.		14,013		0.0147	%
Mann, Bernard		14,012		0.0147	%
Stender, Stewart R.		57,613		0.0604	%
Rouse & Associates Maryland Ptshp		20,000		0.0210	%
Helwig, A. Carl		224,737		0.2355	%
Sunday, James J.		79,348		0.0831	%
Walters, Charles J.		155,723		0.1632	%
Doyle, Margaret A.		19,380		0.0203	%
Stanford Baratz Revocable Trust		9,044		0.0095	%
F. Greek Logan Properties, LLC		33,682		0.0353	%
Virginia Acquisition I, LLC		228,144		0.2391	%
David Mandelbaum		228,144		0.2391	%
Nathan Mandelbaum		228,144		0.2391	%

Preferred Limited Partners
Belcrest Realty Corporation		400,000	N/A
Bel Alliance Properties, LLC		0	N/A
Belwater Realty Corp.		1,460,000	N/A
Belbrook Realty Corporation		1,540,000	N/A
Clearfork Realty Corporation		400,000	N/A
Montebello Realty Corp. 2002		400,000	N/A
JPM Mosaic VI REIT, Inc.		0	N/A
GSEP Realty Corp. 2005		1,000,000
GSEP 2006 Realty Corp.		540,000
Liberty Property Trust	GP		95.5985	%
Total Ownership			100.0000	%

General Partner — The partnership units for Liberty Property Trust have not been reflected because there is no conversion of units to shares by the general partner.

Page 2

EX-10.18

Exhibit 10.18

AGREEMENT OF LIMITED PARTNERSHIP

OF

LIBERTY WASHINGTON, LP

TABLE OF CONTENTS

	Page
ARTICLE I CERTAIN DEFINITIONS		1
ARTICLE II ORGANIZATION AND PURPOSE		12
2.01 Continuation of the Company		12
2.02 Name of Company		13
2.03 Principal Place of Business		13
2.04 Purpose		13
2.05 Exclusive Activities of Company		13
2.06 No Payment of Individual Obligations		13
2.07 Title to Assets		13
2.08 Term		13
2.09 Representations and Warranties		13
ARTICLE III CAPITAL		14
3.01 Initial Capital Contributions; Other Related Transactions		14
3.02 Additional Capital Contributions		15
3.03 Failure to Make Capital Contribution		15
3.04 Capital Accounts		16
3.05 Negative Capital Accounts		17
3.06 Return of Capital; No Interest on Amounts in Capital Account		17
ARTICLE IV ALLOCATIONS		17
4.01 Allocation of Profits and Losses		17
4.02 Special Allocations		18
4.03 Curative Allocations		19
4.04 Other Allocation Rules		20

i

	Page
4.05 Tax Allocations: Code Section 704(c)		20
ARTICLE V DISTRIBUTIONS		20
5.01 Net Cash Receipts		20
5.02 Cash Flow from Liquidating Sale		21
5.03 Distributions on Liquidation		21
5.04 Distributions in Kind		22
5.05 REIT Distributions		22
5.06 Offsets		22
ARTICLE VI MANAGEMENT		23
6.01 Management and Control of Company Business		23
6.02 Delegation; Standards; Indemnification		25
6.03 Annual Business Plan		27
6.04 Matters Requiring Approval of NYSCRF		28
6.05 Hazardous Materials		30
6.06 Emergency Actions		30
6.07 Regular Meetings		31
6.08 Special Meetings		31
6.09 Third Parties		31
6.10 Other Activities of Partners		32
6.11 Withholding of Tax on Certain Company Distributions		32
6.12 Unrelated Business Taxable Income		33
6.13 Prohibited Transactions		34
6.14 Deemed Approval		35
6.15 Reporting Requirements		35
6.16 Action by Partners		36

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	Page
6.17 Right to Disclose Information		36
6.18 Contracts with Affiliates		36
6.19 Loan Provisions		36
6.20 Project Financing		37
6.21 Title Holding Subsidiaries		38
6.22 Ratification of Recitals		39
ARTICLE VII COMPENSATION OF PARTNERS; PAYMENT OF COMPANY EXPENSES		39
7.01 Compensation from Company		39
7.02 Company Expenses		39
ARTICLE VIII COMPANY BOOKS, RECORDS AND STATEMENTS		40
8.01 Books and Records		40
8.02 Method of Accounting		40
8.03 Fidelity and Other Bonds		40
8.04 Financial Statements; Appraisals and Other Information		40
8.05 Bank Accounts		42
8.06 Tax Matters		42
8.07 Certain Elections		43
ARTICLE IX DEFAULT PROVISIONS		44
9.01 Events of Default		44
9.02 Grace Period		44
9.03 Remedies Reserved		45
ARTICLE X TRANSFER OF PARTNERSHIP INTERESTS; SALE OF PROPERTY		45
10.01 Transfer		45
10.02 Approved Transfers		45
10.03 Withdrawal of a Partner		46

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	Page
10.04 Admission of Transferee as a Partner		47
10.05 Admission of Additional Partners		47
ARTICLE XI DISSOLUTION AND LIQUIDATION		48
11.01 No Dissolution, etc		48
11.02 Events Causing Dissolution		48
11.03 Rights to Continue Business of Company		48
11.04 Dissolution		49
11.05 Liquidation		49
11.06 Reasonable Time for Winding Up		49
11.07 Termination of Company		49
ARTICLE XII BUY-SELL		49
12.01 Invoking the Buy-Sell Provision		49
12.02 Closing		50
12.03 Assumption of Company’s Obligations		51
12.04 Payment of Debts		51
12.05 Assignment of Rights or Dissolution		51
ARTICLE XIII ACQUISITIONS, NEW DEVELOPMENTS AND REDEVELOPMENTS		51
13.01 Exclusive Operations		51
13.02 Yield Parameters		51
13.03 New Acquisitions		51
13.04 Initiation of New Developments and Redevelopments		53
13.05 Development Management Guaranty		53
13.06 Disapproval of Proposed New Development or Redevelopment		53
13.07 First Refusal and Repurchase Rights		54
ARTICLE XIV MISCELLANEOUS PROVISIONS		55

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	Page
14.01 Additional Actions and Documents		55
14.02 Notices		55
14.03 Survival and Reliance		56
14.04 Waivers		56
14.05 Exercise of Rights		56
14.06 Binding Effect		56
14.07 Limitation on Benefits of this Agreement		56
14.08 Amendment Procedure		56
14.09 Entire Agreement		56
14.10 Pronouns, Time		57
14.11 Headings		57
14.12 Governing Law		57
14.13 Partner’s Representatives		57
14.14 Execution in Counterparts		57
14.15 Affirmative Action Policy		57
14.16 Advisor		57
14.17 Insurance		58
14.18 Legal Representation of the Company		58
14.19 Special Covenants		58

Exhibit A -	Form of Development Management Agreement
Exhibit B -	Form of Management and Leasing Agreement
Exhibit C -	List of Contributed Properties
Exhibit D -	Current Debt of the Company
Exhibit E -	Business Plan for 2007
Exhibit F -	Reserved
Exhibit G -	Form of Leasing Update

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Exhibit H -	Recitals
Exhibit I -	Initial Yield Parameters
Exhibit J -	Report of Independent Public Accountants
Exhibit K -	Due Diligence for New Acquisitions
Exhibit L -	Due Diligence for New Developments and Redevelopments
Exhibit M -	Insurance Requirements

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AGREEMENT OF LIMITED PARTNERSHIP

OF

LIBERTY WASHINGTON, LP

     THIS AGREEMENT OF LIMITED PARTNERSHIP is made and entered into as of the 4th day of October, 2007 (the “Effective Date”), by and between LIBERTY WASHINGTON VENTURE, LLC, a Delaware limited liability company (“General Partner”) as general partner, and NEW YORK STATE COMMON RETIREMENT FUND, as limited partner (“NYSCRF”), (General Partner and NYSCRF are sometimes referred to collectively as “Partners”).

     NOW, THEREFORE, in consideration of the covenants and agreements hereinafter set forth, the parties hereby agree as follows:

ARTICLE I

CERTAIN DEFINITIONS

     Unless the context otherwise specifies or requires, the terms defined in this Article I shall, for the purposes of this Agreement, have the meaning herein specified. Unless otherwise specified, all references herein to Articles or Sections are to Articles or Sections of this Agreement.

     “Acquisition Plan” shall have the meaning set forth in Section 13.03.

     “Act” means the Delaware Revised Uniform Limited Partnership Act, as amended from time to time (or any corresponding provisions of succeeding law).

     “Additional Capital Contributions” means, with respect to any Partner, the total amount contributed to the Company by such Partner pursuant to Section 3.02(a).

     “Adjusted Capital Account Deficit” means, with respect to any Partner, the deficit balance in such Partner’s Capital Account as of the end of the relevant Fiscal Year or period, after (a) crediting to such Capital Account any amounts which such Partner is deemed to be obligated to restore to the Company pursuant to the next-to-last sentences of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5), and (b) debiting to such Capital Account the items described in Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6). The foregoing definition is intended to comply with the provisions of Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

     “Advisor” has the meaning set forth in Section 14.16.

     “Affiliate” means, when used with reference to a specific Person, any Person directly or indirectly controlling, controlled by, or under common control with the Person in question. As used in this definition, the terms “controlling”, “controlled” and “control” mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and

policies of a Person, whether through the ownership of voting securities, by contract, or otherwise.

     “Agreement” means this Agreement of Limited Partnership of Washington, LP, as amended from time to time.

     “Approved Vendor” means general contractors, subcontractors, surveyors, title companies, environmental consultants, material suppliers, engineers and other professionals of good standing and reputation in the geographic region where the Property is located.

     “Annual Business Plan” has the meaning set forth in Section 6.03.

     “Auditor” shall mean such national firm of independent certified public accountants which shall be selected by the General Partner and reasonably approved by NYSCRF and engaged annually to audit the books and records of the Company and prepare the tax returns of the Company. The initial Auditor shall be Ernst & Young LLP.

     “Bankrupt” and “Bankruptcy” each have the meaning set forth in Section 11.02.

     “Business Day” means Monday through Friday of each week, except that a legal holiday recognized as such in any of the States of Illinois, New York, Virginia or Pennsylvania, or the District of Columbia, shall not be regarded as a Business Day.

     “Call for Capital” has the meaning set forth in Section 3.02(b).

     “Capital Account” means the Capital Account maintained for each Partner pursuant to Section 3.04.

     “Capital Contributions” means, with respect to any Partner, the total amount contributed to the capital of the Company by such Partner pursuant to Sections 3.01, 3.02 and 3.03(b).

     “Capital Transaction” means the sale, exchange, condemnation (or similar eminent domain taking or disposition in lieu thereof), destruction by casualty, financing or refinancing, or disposition of the Property or any portion thereof.

     “Cause” means [The confidential material contained herein has been omitted and has been separately filed with the Commission.]

     “Code” means the Internal Revenue Code of 1986, as amended from time to time (or any corresponding provisions of succeeding law). References to Sections of the Code are to those in effect on the date of this Agreement and shall include any corresponding future provision of the Code.

     “Company” means Liberty Washington, LP, a Delaware limited partnership governed by this Agreement, as it may from time to time be reconstituted.

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     “Company Minimum Gain” has the meaning set forth in Regulations Sections 1.704-2(b)(2) and 1.704-2(d).

     “Contributed Entities” means the entities identified as such on Exhibit C.

     “Contributed Interests” means those ownership interests in the Contributed Entities held by Liberty Property Limited Partnership, which are being contributed to the Company by or on behalf of the General Partner pursuant to the Contribution Agreement, as identified on Exhibit C.

     “Contribution Agreement” means that certain Contribution Agreement dated on or about the date of this Agreement by and among LPLP, NYSCRF and the Company, pursuant to which LPLP is contributing the Contributed Interests to the Company on behalf of the General Partner, and the General Partner is receiving a credit to its Capital Account pursuant to Section 3.01.

     “Cost Overrun” has the meaning set forth in the Development Management Agreement.

     “DC Metropolitan Area” shall mean (i) the District of Columbia, (ii) those portions of the State of Maryland located within the Interstate 495 “Beltway”, and (iii) the Counties of Loudon, Fairfax and Arlington, Virginia

     “Default” has the meaning set forth in Section 9.01.

     “Depreciation” means, for each Fiscal Year or other period, an amount equal to the depreciation, amortization, or other cost recovery deduction allowable with respect to an asset for such Year or period, except that if the Gross Asset Value of an asset differs from its adjusted basis for Federal income tax purposes at the beginning of such Year or period, then Depreciation shall be an amount which bears the same ratio to such beginning Gross Asset Value as the Federal income tax depreciation, amortization, or other cost recovery deduction for such Year or period bears to such beginning adjusted tax basis; provided, however, that if the adjusted tax basis for Federal income tax purposes of an asset at the beginning of such Year or period is zero, then Depreciation shall be determined with reference to such beginning Gross Asset Value using any reasonable method selected by the General Partner.

     “Development Management Agreement” means an agreement, in substantially the form attached hereto as Exhibit A, to be entered into between the Company or its Subsidiaries that own Property, and the General Partner (or its Affiliate) from time to time in connection with New Developments in accordance with ARTICLE XIII, as such agreement may be amended from time to time as permitted herein.

     “Effective Date” shall have the meaning set forth in the Preamble to this Agreement.

     “Entities” shall mean collectively the Contributed Entities and the Purchased Entities.

     “ERISA” means the Employee Retirement Income Security Act of 1974 and the regulations issued thereunder, as amended from time to time, and any successor to such Act.

     “Extraordinary Cash Flow” means the cash proceeds (including, but not limited to, any applicable condemnation, insurance and refinancing proceeds) realized by the Company as a

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result of a Capital Transaction, increased by the cash interest payments received on such proceeds, decreased by the sum of the following: (i) any amounts applied in repayment of any approved debt, (ii) the amount of such proceeds used, set aside or committed by the Company for repair or replacement of any portion of the Property; (iii) any expenses, costs or liabilities incurred by the Company in effecting or obtaining any such Capital Transaction or the proceeds thereof (including, without limitation, attorneys’ fees, court costs, brokerage fees, commissions, title insurance and survey costs, recording fees, and transfer taxes), all of which expenses, costs and liabilities shall be paid from the gross amount of such cash proceeds to the extent thereof.

     “Final Plans and Specifications” means the plans and specifications submitted to NYSCRF by the Company to support a request by the General Partner to commence a New Development in accordance with the Preliminary Plans and Specifications and approved by NYSCRF.

     “Final Project Budget” means, as to each New Development, the total budget for the construction and leasing of each New Development prepared by the General Partner in accordance with the Preliminary Project Budget and approved by NYSCRF.

     “Fiscal Year” means the calendar year.

     “Functional Office Property” means a Property other than a Redevelopment Property that is acquired, directly or indirectly, at any time by the Company and which at the time of its acquisition is improved with an existing office building.

     “General Partner” means Liberty Washington Venture, LLC.

     “Gross Asset Value” means, with respect to any asset, such asset’s adjusted basis for Federal income tax purposes, with the following modifications:

          (a) The initial Gross Asset Value of any asset contributed by a Partner to the Company shall be the gross fair market value of such asset, as determined by the contributing Partner and the General Partner, or where the General Partner is the contributing Partner, by the contributing Partner and NYSCRF. The initial Gross Asset Value of the Interests are set forth on Exhibit C.

          (b) The Gross Asset Values of all Company assets shall be adjusted to equal their respective gross fair market values, as determined by the General Partner subject to the approval of NYSCRF, which shall not unreasonably be withheld, as of the following times: (i) the acquisition of an additional interest in the Company by any new or existing Partner in exchange for more than a de minimis Capital Contribution; (ii) the distribution by the Company to a Partner of more than a de minimis amount of property as consideration for an interest in the Company; and (iii) the liquidation of the Company within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g); provided, however that adjustments pursuant to clauses (i) and (ii) above shall be made only if the General Partner reasonably determines that such adjustments are necessary or appropriate to reflect the relative economic interests of the Partners in the Company.

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          (c) The Gross Asset Value of any Company asset distributed to any Partner shall be adjusted to equal the gross fair market value of such asset on the date of distribution as determined in accordance with Section 5.04.

          (d) The Gross Asset Values of each of the Properties contributed or sold to the Company as of the Effective Date, and the components thereof, shall be the amounts set forth next to the name of the Property on Exhibits C and D hereto, subject to adjustment of such Exhibits to reflect subsequent transactions and the determination of Gross Asset Values as provided for herein.

          (e) The Gross Asset Values of Company assets shall be increased (or decreased) to reflect any adjustments to the adjusted basis of such assets pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent that such adjustments are taken into account in determining Capital Accounts pursuant to Regulations Section 1.704-1(b)(2)(iv)(m), for purposes of paragraph (f) of the definition of Profits and Losses and for purposes of Section 4.02(h) hereof; provided, however, that Gross Asset Values shall not be adjusted pursuant to this subparagraph (e) to the extent the General Partner determines that an adjustment pursuant to subparagraph (b) above in this definition is necessary or appropriate in connection with a transaction that would otherwise result in an adjustment pursuant to this subparagraph (e).

          (f) If the Gross Asset Value of an asset has been determined or adjusted pursuant to this Section, then such Gross Asset Value shall thereafter be adjusted by the Depreciation taken into account with respect to such asset for purposes of computing Profits and Losses.

          (g) This definition of Gross Asset Value is intended to comply with the Internal Revenue Code, with particular adherence to the provisions of Code Section 704(b) and the Regulations thereunder.

     “Guarantors” shall have the meaning set forth in Section 6.20.

     “Hazardous Materials” mean (i) any “hazardous waste” as defined by the Resource Conservation and Recovery Act of 1976 (42 U.S.C. Section 6901 et seq.), as amended from time to time, and regulations promulgated thereunder (“RCRA”); (ii) any “hazardous substance” as defined by the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C. Section 9601 et seq.), as amended from time to time, and regulations promulgated thereunder (“CERCLA”) (including petroleum-based products as described therein); (iii) other petroleum and petroleum-based products; (iv) asbestos in any quantity or form which would subject it to regulation under any applicable Hazardous Materials Law (hereinafter defined); (v) polychlorinated biphenyls; (vi) any substance, the presence of which on the Property is prohibited by any Hazardous Materials Law; (vii) any “extremely hazardous substance” or “hazardous chemical” as those terms are defined in the Emergency Planning and Community Right-To-Know Act (42 U.S.C. Section 11001 et seq.) as amended from time to time, and regulations promulgated thereunder; (viii) any “chemical substance” as that term is defined in the Toxic Substances Control Act (15 U.S.C. Section 2601) as amended from time to time, and regulations promulgated thereunder; (ix) any hazardous substances identified under the

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law of the state in which the Property is located; and (x) any other substance, including toxic substances, which, by any Hazardous Materials Laws, requires special handling in its collection, storage, treatment, management, recycling or disposal.

     “Hazardous Materials Law” means all Governmental Requirements, including, without limitation, RCRA and CERCLA, relating to the handling, storage, existence of or otherwise regulating any hazardous wastes, hazardous substances, toxic substances, radioactive materials, pollutants, chemicals, contaminants or industrial substances or relating to the removal or remediation of any of the foregoing.

     “Indemnified Party” has the meaning set forth in Section 6.02(f).

     “Initial Properties” means the Properties owned by the Entities on the date that the Interests are acquired by the Company pursuant to the Contribution Agreement.

     “Interests” shall mean collectively the Contributed Interests and the Purchased Interests.

     “IRR” means the annualized discount rate, compounded as of the last day of each calendar month, which equates the sum of the present value of all contributions made by a Partner to the Company with the sum of the present value of all distributions made to such Partner by the Company (including distributions of Net Operating Cash Receipts and distributions of Extraordinary Cash Flow and the value of any distributions in kind made in accordance with Section 5.04), as calculated by reputable and generally accepted financial software applications (such as Microsoft Excel, Lotus 123 and Argus or, if they are no longer available or generally accepted, such other financial applications as from time to time have the general acceptance of the real estate finance community). For purposes of the foregoing, all contributions and distributions made prior to the date of this Agreement shall be deemed to have been made on the date of this Agreement.

     “Lakeside, LLC” shall have the meaning set forth in the Recitals to this Agreement.

     “Liberty Loan” shall have the meaning set forth in the Recitals to this Agreement.

     “Liberty Loan Documents” shall have the meaning set forth in the Recitals to this Agreement.

     “Liquidating Sale” means the sale of substantially all of the then remaining Properties, either in one transaction or in a series of related transactions.

     “Liquidation” means (a) when used with reference to the Company, the earlier of (i) the date upon which the Company is terminated under Code Section 708(b)(1)(A), (ii) the date upon which the Company ceases to be a going concern, or (iii) the date upon which the Company dissolves in accordance with ARTICLE XI, and (b) when used with reference to a Partner, the earlier of (i) the date upon which there is a liquidation of such Partner, or (ii) the date upon which there is a liquidation of such Partner’s Partnership Interest for purposes of Code Section 761(d).

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     “LPLP” means Liberty Property Limited Partnership, a Pennsylvania limited partnership and the sole member of the General Partner.

     “Management and Leasing Agreement” means the Agreement by and between the Company, or its Subsidiary that owns Property, and Manager attached hereto as Exhibit B, as amended from time to time as permitted herein.

     “Manager” means Liberty Property Limited Partnership, a Pennsylvania limited partnership (an Affiliate of General Partner), or its Affiliate.

     “Merger” means that certain merger between Republic Property Trust, RPLP, Liberty Property Trust, Liberty Acquisition LLC and Liberty Property Limited Partnership pursuant to that certain Agreement of Plan and Merger dated July 23, 2007.

     “Merger Loan” shall have the meaning set forth in the Recitals to this Agreement.

     “Net Cash Receipts” means the sum of Net Operating Cash Receipts and Extraordinary Cash Flow for the applicable period.

     “Net Operating Cash Receipts” means, for any period subject to annual audit as contemplated by Section 8.04(a) below, the excess of (a) gross cash receipts from operations (excluding cash proceeds from Capital Transactions and any security or lease deposits until forfeited or otherwise applied to rent due under the leases) of the Company during such period in excess of (b) the aggregate of (i) all operating costs and expenses during such period (not including interest on borrowed money) of the Company paid in cash during such period (without deduction for any charge for cost recovery, depreciation or other expenses not paid in cash), (ii) the cost of debt service, including both interest and principal reductions and any applicable fees under any approved debt (including, without limitation, the Liberty Loan) paid during such period, and (iii) principal and interest on any Tax Payment Loan. Any increase, from the previous period to the period under determination, in the amounts of reserves and working capital as reasonably determined by the General Partner in accordance with the Annual Business Plan shall be treated as a deduction from Net Operating Cash Receipts for the latter period; and any decrease, from the previous period to the period under determination, in the amounts of reserves and working capital as reasonably determined by the General Partner in accordance with the Annual Business Plan shall be treated as an addition to Net Operating Cash Receipts for the latter period.

     “New Development” means any new improvements constructed by the Company pursuant to ARTICLE XIII in accordance with the Annual Business Plan or a Development Plan on any Vacant Land Property owned, directly or indirectly, by the Company.

     “New Development Property” means a Property on which the Company has developed a New Development at any time during the term of this Agreement.

     “Non-Recourse Carveouts” shall have the meaning set forth in Section 6.20.

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     “Nonrecourse Deductions” has the meaning set forth in Regulations Section 1.704-2(b)(1). The amount of Nonrecourse Deductions for a Fiscal Year shall be determined in accordance with the provisions of Regulations Section 1.704-2(c).

     “Nonrecourse Liability” has the meaning set forth in Regulations Section 1.704-2(b)(3).

     “Partner” or “Partners” means General Partner, NYSCRF and such successors, assigns or additional Partners as may be admitted to the Company pursuant to the terms of this Agreement.

     “Partner Nonrecourse Debt” has the meaning set forth in Regulations Section 1.704-2(b)(4).

     “Partner Nonrecourse Debt Minimum Gain” means an amount, with respect to each Partner Nonrecourse Debt, equal to the Company Minimum Gain that would result if such Partner Nonrecourse Debt were treated as a Nonrecourse Liability, determined in accordance with Regulations Section 1.704-2(i)(3).

     “Partner Nonrecourse Deductions” has the meaning set forth in Regulations Sections 1.704-2(i)(1) and 1.704-2(i)(2).

     “Partnership Interest” means, as to any Partner, all of the interest of such Partner in the Company including, without limitation, such Partner’s right to a distributive share of the profits, losses, and distributions of the Company and to a distributive share of Company Assets.

     “Percentage Interest” means, as of the Effective Date, seventy-five percent (75%) for NYSCRF and twenty-five percent (25%) for General Partner respectively, unless and until changed as provided in this Agreement.

     “Performance Standards” means (i) achieving leasing rates on renewals and new leases at each Property substantially consistent with market rates for similar properties in such submarket, (ii) achieving and maintaining occupancy rates on average for the Properties in a submarket substantially consistent with occupancy rates for similar type properties in such submarket, (iii) maintaining in each Fiscal Year on a Company wide basis non-reimbursed capital expenditures at or below the amounts budgeted in the approved Annual Business Plan, (iv) timely delivery of financial and managerial reports in accordance with the provisions of Section 8.04 and (v) performance substantially economically consistent with the Annual Business Plan.

     “Person” means any individual, corporation, association, company, limited liability company, joint venture, trust, estate, or other entity or organization.

     “Preliminary Plans and Specifications” means the plans and specifications submitted to NYSCRF by the Company to support a request by the General Partner to commence a New Development or the redevelopment of a Redevelopment Property.

     “Preliminary Project Budget” means the budget for a New Development submitted to NYSCRF by the Company to support a request by the General Partner to commence a New Development or the redevelopment of a Redevelopment Property, including a pro forma operating budget.

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     “Prime Rate” means the prime rate published by the Wall Street Journal, or any successor publication reasonably approved by the Partners, from time to time.

     “Profits” and “Losses” means, for each Fiscal Year or other period, an amount equal to the Company’s taxable income or loss for such Year or period, determined in accordance with Code Section 703(a) (for this purpose, all items of income, gain, loss, or deduction required to be stated separately pursuant to Code Section 703(a)(1) shall be included in taxable income or loss), with the following adjustments:

          (a) Any income of the Company that is exempt from Federal income tax and not otherwise taken into account in computing Profits or Losses pursuant to this Section shall be added to such taxable income or loss;

          (b) Any expenditures of the Company described in Code Section 705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant to Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account in computing Profits or Losses pursuant to this Section, shall be subtracted from such taxable income or loss;

          (c) In the event the Gross Asset Value of any Company Asset is adjusted pursuant to any provision of this Agreement in accordance with the definition of “Gross Asset Value” above, the amount of such adjustment shall be taken into account as gain or loss from the disposition of such Asset for purposes of computing Profits or Losses;

          (d) Gain or loss resulting from any disposition of property with respect to which gain or loss is recognized for Federal income tax purposes shall be computed by reference to the Gross Asset Value of the property disposed of, notwithstanding that the adjusted tax basis of such property differs from its Gross Asset Value;

          (e) In lieu of the depreciation, amortization, and other cost recovery deductions taken into account in computing such taxable income or loss, there shall be taken into account Depreciation for such Fiscal Year or other period, computed in accordance with the definition of “Depreciation” above;

          (f) To the extent an adjustment to the adjusted tax basis of any Company Asset pursuant to Code Section 734(b) or Code Section 743(b) is required pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(2) or (4) to be taken into account in determining Capital Accounts as a result of a distribution other than in liquidation of a Partner’s interest in the Company, the amount of such adjustment shall be treated as an item of gain (if the adjustment increases the basis of such asset) or loss (if the adjustment decreases the basis of such asset) from the disposition of such asset and shall be taken into account for purposes of computing Profits or Losses;

          (g) Notwithstanding any other provision of this Section, any items, which are specially allocated pursuant to Section 4.02, or Section 4.04 shall not be taken into account in computing Profits or Losses; and

          (h) The amounts of the items of Company income, gain, loss, or deduction available to be specially allocated pursuant to Sections 4.02 and 4.03 but not previously taken

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into account because of the restrictions of paragraph (g) shall be determined by applying rules analogous to those set forth in this Section.

     “Project Financing” shall have the meaning set forth in Section 6.20.

     “Property” or “Properties” means each and all of the real estate including, but not limited to (i) the land and improvements thereon owned, directly or indirectly, by the Entities and acquired by the Company by contribution of the Contributed Interests pursuant to the Contribution Agreement and purchase of the Purchased Interests as described in the Recitals to this Agreement, (ii) all additional real estate acquired in accordance with the Annual Business Plan or an Acquisition Plan, and (iii) all improvements, fixtures and personal property owned, directly or indirectly, by the Company and located thereon, in each case until disposed of by the Company in accordance with this Agreement. The present and future Properties are comprised of New Development Properties, Redevelopment Properties, Functional Office Properties, and Vacant Land Properties.

     “Purchase Money Loan Documents” shall have the meaning set forth in the Recitals to this Agreement.

     “Purchase Money Note” shall have the meaning set forth in the Recitals to this Agreement.

     “Purchase Price” shall have the meaning set forth in the Recitals to this Agreement.

     “Purchased Entities” shall have the meaning set forth in the Recitals to this Agreement.

     “Purchased Interests” shall have the meaning set forth in the Recitals to this Agreement..

     “Recitals” means the recitals set forth on Exhibit H attached hereto.

     “Recourse Obligations” shall have the meaning set forth in Section 6.20.

     “Redevelopment Property” means an improved Property or a land position acquired by the Company that the Partners mutually agree should be considered as such due to any one or more of the following factors: existing occupancy; anticipated tenant expirations; amount of capital expenditures intended to be invested to rehabilitate the Property, or; the anticipated yields on the investment. The Partners acknowledge that among the Initial Properties, 1129 29th Avenue and the potential additional Floor Area Ratio that may become available in Republic Park are deemed to be Redevelopment Property

     “Regulations” means the Income Tax Regulations promulgated under the Code as such regulations may be amended from time to time (including Temporary Regulations). References to Sections of the Regulations are to those in effect on the date of this Agreement and shall include any corresponding future provision of the Regulations.

     “Regulatory Allocations” has the meaning set forth in Section 4.03.

     “REIT” means a “real estate investment trust” within the meaning of the Code.

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     “RPLP” means Republic Property Limited Partnership, a Delaware limited partnership.

     “Section 12.01 Notice” means the notice given pursuant to Section 12.01 of this Agreement.

     “Subsidiary” means any entity taxable as a company for federal income tax purposes in which the Company owns any direct or indirect interest in the profits, losses or capital of the entity.

     “Tax Matters Partner” has the meaning set forth in Section 8.06(b).

     “Tax Payment Loan” has the meaning set forth in Section 6.11(a).

     “Title Holding Subsidiary” has the meaning set forth in Section 6.21.

     “Transfer” has the meaning set forth in Section 10.01(a)

     “Transferee Partner” means any Partner who has acquired any Partnership Interest by transfer or otherwise from any other Partner.

     “UBTI” means unrelated business taxable income within the meaning of Section 512 of the Code.

     “Unleveraged Development IRR” shall mean the IRR for all contributions by and all distributions to NYSCRF with respect solely to New Development Properties, Redevelopment Properties and Vacant Land Properties, calculated based on the assumptions that: (a) all funds borrowed by the Company from third parties from the execution of this Agreement through the Liquidating Sale with respect to such Properties shall be treated as though such funds had been obtained by the Company as Capital Contributions from the Partners in proportion to their respective Percentage Interests at the time of each such borrowing by the Company, (b) all payments of principal and interest on such borrowed funds with respect to such Properties shall be treated as though such payments had been distributed by the Company to the Partners in proportion to their respective Percentage Interests at the time of each such payment, and (c) all such borrowed funds to the extent not theretofore repaid shall be treated as having been repaid at the time of calculation. If a contribution, distribution or third-party loan relates partly to one or more New Development Properties, Redevelopment Properties and Vacant Land Properties, and partly to one or more Functional Office Properties, the amount thereof (or the amount of principal or interest relating thereto, in the case of a third-party loan) shall be allocated in an equitable manner based on the extent to which the respective class of Properties contributed to or was responsible for the amount in question.

     “Unleveraged IRR Target” shall be satisfied if, in connection with a Liquidating Sale, both of the following are true: [The confidential material contained herein has been omitted and has been separately filed with the Commission.]

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     “Unleveraged Functional Office IRR” shall mean the IRR for all contributions by and all distributions to NYSCRF with respect solely to Functional Office Properties, calculated based on the assumptions that: (a) all funds borrowed by the Company from third parties from the execution of this Agreement through the Liquidating Sale with respect to such Properties shall be treated as though such funds had been obtained by the Company as Capital Contributions from the Partners in proportion to their respective Percentage Interests at the time of each such borrowing by the Company, (b) all payments of principal and interest on such borrowed funds with respect to such Properties shall be treated as though such payments had been distributed by the Company to the Partners in proportion to their respective Percentage Interests at the time of each such payment, and (c) all such borrowed funds to the extent not theretofore repaid shall be treated as having been repaid at the time of calculation. If a contribution, distribution or third-party loan relates partly to one or more New Development Properties, Redevelopment Properties and Vacant Land Properties, and partly to one or more Functional Office Properties, the amount thereof (or the amount of principal or interest relating thereto, in the case of a third-party loan) shall be allocated in an equitable manner based on the extent to which the respective class of Properties contributed to or was responsible for the amount in question.

     “Unreturned Capital Contribution” means the cumulative Capital Contributions of a Partner, reduced, but not below $0, by the cumulative amounts distributed to that Partner pursuant to Section 5.02(a) hereof.

     “Vacant Land Property” means a Property which is acquired at any time by the Company and which is either (a) unimproved except for site work, or (b) improved with buildings or structures which pursuant to the Acquisition Plan relating to such Property are planned to be substantially demolished by the Company.

     “WillowWood, LLC” shall have the meaning set forth in the Recitals to this Agreement.

ARTICLE II

ORGANIZATION AND PURPOSE

     2.01 Continuation of the Company. A Certificate of Limited Partnership has been filed with the State of Delaware and a certificate to do business has been filed with the State of Virginia and the District of Columbia. The Partners hereby form the Company as a limited partnership pursuant to the provisions of the Act and enter into this Agreement in order to establish the rights, duties, and relationship of the Partners. The General Partner shall cause the Company to continuously maintain in the State of Delaware a registered agent and registered office for services of process, and to continuously maintain the Company’s qualification to do business in the State of Virginia, the District of Columbia and, if the Company or its Subsidiaries own Property in Maryland, the State of Maryland. If the laws of any jurisdiction in which the Company transacts business so require, the General Partner shall file, with the appropriate office in that jurisdiction, all documents necessary for the Company to qualify to transact business. The Partners shall execute, acknowledge, and cause to be filed for record, in the place or places

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and manner prescribed by law, any amendments to this Agreement as may be required, either by the Act, by the laws of any jurisdiction in which the Company transacts business, or by this Agreement, to reflect changes in the information contained herein or otherwise to comply with the requirements of law for the continuation, preservation, and operation of the Company as a partnership under the Act.

     2.02 Name of Company. The name of the Company shall be Liberty Washington, LP, and all business of the Company shall be conducted in such name.

     2.03 Principal Place of Business. The principal place of business of the Company shall be located at 500 Chesterfield Parkway, Malvern, PA 19355, or such other place or places as the General Partner may from time to time determine, provided that the General Partner shall give written notice thereof to the Partners within five (5) days after the effective date of any such change. The General Partner may establish and maintain such other offices and additional places of business of the Company as it deems appropriate.

     2.04 Purpose. The purpose of the Company shall be: (a) to acquire, own, develop, re-develop, improve, operate, lease and manage office properties in the DC Metropolitan Area, (b) to sell and otherwise dispose of any or all such properties, (c) to undertake any and all actions necessary or incidental to any of the foregoing activities, and (d) to take or cause to be taken all actions and to perform or cause to be performed all functions necessary or appropriate to promote the business of the Company and to realize and carry out its purposes.

     2.05 Exclusive Activities of Company. Except as otherwise provided in this Agreement, the Company shall not engage in any other activity or business other than as specified under Section 2.04, and no Partner shall have any authority to hold itself out as the agent of any other Partner or as a Partner of the Company with respect to any other business or activity.

     2.06 No Payment of Individual Obligations. The Partners shall use the Company’s credit and assets solely for the benefit of the Company. No asset of the Company shall be transferred or encumbered for or in payment of any individual obligation of any Partner.

     2.07 Title to Assets. All Company assets shall be owned by and held in the name of the Company or in the name of a wholly-owned subsidiary of the Company. No Partner shall have any ownership interest in any Company asset in its individual name or right, and each Partner’s interest in the Company shall be personal property for all purposes.

     2.08 Term. The Company shall continue in perpetuity unless and until the Company is dissolved and liquidated in accordance with the provisions of ARTICLE XI.

     2.09 Representations and Warranties.

          (a) Each Partner hereby represents and warrants to the Company and to the other Partners that:

               (i) it is duly organized, validly existing, and in good standing under applicable law, it has full and unrestricted right, authority and power to enter into this Agreement

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and to perform its obligations hereunder; this Agreement constitutes a valid and binding obligation of such Partner, enforceable in accordance with its terms; and

               (ii) the representations and warranties made by such Partner in the Contribution Agreement are true and correct in all material respects on and as of the date of this Agreement.

          (b) The representations and warranties made by each Partner under Section 2.09(a)(i) shall be deemed to have been remade by such Partner as of the date of each Call for Capital and each Capital Contribution pursuant to such Call, and shall survive the dissolution and liquidation of the Company or such Partner.

ARTICLE III

CAPITAL

     3.01 Initial Capital Contributions; Other Related Transactions. In accordance with the Contribution Agreement, the following events and transactions have occurred, or will occur, on or before the Effective Date:

          (a) On or before the Effective Date, NYSCRF has made a contribution to the Company in the amount of $415,063,748.00, which amount shall be credited to NYSCRF’s Capital Account.

          (b) On or before the Effective Date, LPLP, on behalf of the General Partner, has contributed or shall contribute and convey the Contributed Interests to the Company, in satisfaction of the Merger Loan, to the extent thereof, and the balance as a contribution to the capital of the Company. The Contributed Interests shall be free and clear of all liens, security interests, pledges, assignments, claims, options, encumbrances, charges, commitments, and equitable interests or rights of others, of any kind whatsoever, other than the Liberty Loan. On the Effective Date, the Property owned directly or indirectly by the Contributed Entities shall be free and clear of all mortgages and other liens and encumbrances, except for the Assumed Financing (defined below) or as otherwise approved under the Contribution Agreement. Simultaneously with the contribution to the Company of the Contributed Interests, LPLP has or shall contribute to the Company, on behalf of the General Partner, the lender’s rights and interests in and to the Purchase Money Loan Documents. The foregoing contributions described in this Section 3.01(b) have an aggregate value for purposes of this Agreement of $138,354,583.00, which amount shall be credited to the Capital Account of the General Partner.

          (c) Certain of the Properties owned (directly or indirectly) by certain of the Entities have existing mortgage financing with those lenders, and in those amounts, identified on Exhibit D hereto (the “Assumed Financing”). By acceptance of the contribution of the Contributed Interests to the Company and the purchase of the Purchased Interests by the Company, the Company shall be deemed to have assumed the Assumed Financing.

          (d) By virtue of the assignment to, and assumption by, the Company of the Liberty Loan Documents, as described in the Recitals to this Agreement, the Company shall be

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deemed to have obtained secured financing in the principal amount of $59,500,000.00. The principal amount of, and interests securing the Liberty Loan are depicted on Exhibit D.

          (e) The Partners acknowledge that the contribution amounts set forth in Section 3.01(a) and Section 3.01(b) include estimated closing costs of the Company, and the Partners intend to adjust their initial capital contributions based on a reconciliation and proration of such costs undertaken post-Closing in accordance with the Contribution Agreement.

     3.02 Additional Capital Contributions.

          (a) NYSCRF and the General Partner shall each make Additional Capital Contributions to the Company in proportion to their Percentage Interests from time to time as may be required to (i) fund the costs of development, construction and lease-up (net of the proceeds of any third-party debt incurred for such development activities) of any New Development or Redevelopment pursuant to ARTICLE XIII (but not including Cost Overruns which shall be the responsibility of the Development Manager under the Development Management Agreement), or (ii) fund the acquisition costs (net of the proceeds of any third-party debt incurred for such acquisition) of any additional Property acquired by the Company in accordance with a jointly-approved Acquisition Plan adopted pursuant to Section 13.03. The Partners expect and intend that, except in the case of the development, construction and lease-up costs of the New Developments and Redevelopments and the acquisition costs for additional property acquisitions, any cash requirements of the Company will be provided from the rentals received by the Company and, if approved by the Partners, by loans from one or more Partners, at such Partners’ option, and loans from third parties, and no Partner shall be required to make any additional capital contribution to the Company therefor.

          (b) When required pursuant to Section 3.02(a), each Partner shall contribute in cash its respective Additional Capital Contribution to the Company on not less than ten (10) days prior written notice after the General Partner’s call therefor (each a “Call for Capital”).

          (c) If any amounts shall become due and payable under the Purchase Money Loan Documents, the General Partner shall make an Additional Capital Contribution to the Company equal to twenty-five percent (25%) of all such amounts.

     3.03 Failure to Make Capital Contribution. If any Partner fails to make any Capital Contribution required to be made by such Partner under Section 3.01 or Section 3.02 within 10 days after the same becomes due and payable (the “Defaulting Partner”), one or more of the other Partners (the “Contributing Partner”) may (but without obligation to do so), within 15 days after the expiration of said 10-day period, contribute to the Company an additional amount equal to the Defaulting Partner’s unpaid Capital Contribution and elect to treat such contribution as provided in either Section 3.03(a) or Section 3.03(b). If the Contributing Partner fails to make such election within said 15-day period, it shall be deemed to have elected to treat such contribution as provided in Section 3.03(b).

          (a) The Contributing Partner may treat such contribution as a loan to the Defaulting Partner (to be due and payable solely out of distributions otherwise payable to the Defaulting Partner hereunder) followed by a contribution of the proceeds thereof to the Company

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to fund the Capital Contribution otherwise required to be made from the Defaulting Partner. Until the loan to the Defaulting Partner shall have been repaid together with interest at the rate equal to the Prime Rate plus five percentage points, or the maximum rate permitted under applicable law, whichever is less, calculated upon the outstanding principal balance of such loan as of the first day of each month, all distributions otherwise to be made to the Defaulting Partner hereunder shall be distributed, for the Defaulting Partner’s account, by payment of the same to the Contributing Partner, and shall be applied against the balance owed by the Defaulting Partner to the Contributing Partner.

          (b) [The confidential material contained herein has been omitted and has been separately filed with the Commission.]

          (c) Any change in Percentage Interests pursuant to this Section 3.03(b) shall not affect the amount of any Partner’s Capital Contributions for purposes of determining the amount to which such Partner is entitled pursuant to Section 5.02(a), to the extent attributable to Section 5.02(a).

     3.04 Capital Accounts.

          (a) The Company shall establish and maintain a separate Capital Account for each Partner in accordance with the following provisions:

               (i) To each Partner’s Capital Account there shall be credited (A) the amount of money contributed by such Partner to the Company, (B) the fair market value of property contributed by such Partner to the Company (net of any liabilities secured by such property that the Company is considered to assume or take subject to under Code Section 752) (the Partners agreeing that the fair market value of the Properties contributed by the General Partner to the Partnership on the date of this Agreement have fair market values equal to their Gross Asset Value as set forth in Section 3.01), and (C) such Partner’s distributive share of Profits and any items in the nature of income or gain which are specially allocated to such Partner pursuant to ARTICLE IV; and

               (ii) To each Partner’s Capital Account there shall be debited (A) the amount of money distributed to such Partner by the Company, (B) the fair market value of any

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Company Asset distributed to such Partner by the Company (net of any liabilities secured by such Asset that such Partner is considered to assume or take subject to under Code Section 752), and (C) such Partner’s distributive share of Losses and any items in the nature of expenses or losses which are properly allocated to such Partner pursuant to any Section of ARTICLE IV.

     The foregoing provisions and the other provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with Regulations Section 1.704-1(b), and shall be interpreted and applied in a manner consistent with such Regulations. In the event the General Partner shall determine that it is prudent to modify the manner in which the Capital Accounts, or any debits or credits thereto, are computed in order to comply with such Regulations, the General Partner may make such modification, provided that it will not have any adverse effect on the amounts distributable to any Partner pursuant to this Agreement. The General Partner also shall (1) make any adjustments that are necessary or appropriate to maintain equality between the combined Capital Accounts of the Partners and the total amount of Company capital reflected on the Company’s balance sheet, as computed for book purposes in accordance with Regulations Section 1.704-1(b)(2)(iv)(g), and (2) make any appropriate modifications in the event unanticipated events might otherwise cause this Agreement not to comply with Regulations Section 1.704-1(b) subject, however, to the limitation on modifications having any adverse effect on amounts to be distributed to a Partner as provided in the preceding sentence. Any questions with respect to a Partner’s Capital Account shall be resolved by the General Partner in its reasonable discretion, applying principles consistent with this Agreement.

          (b) Any transferee of a portion or all of a Partner’s Partnership Interest shall succeed to the Capital Account of the transferor Partner to the extent it relates to the Partnership Interest transferred.

     3.05 Negative Capital Accounts. Except to the extent Partners are required to make contributions to the capital of the Company under Section 3.01 and Section 3.02, no Partner shall be required to pay to the Company or to any other Partner any deficit or negative balance which may exist in such Partner’s Capital Account from time to time or upon Liquidation of the Company. A negative Capital Account shall not be considered a loan from or an asset of the Company.

     3.06 Return of Capital; No Interest on Amounts in Capital Account. Except upon dissolution of the Company or as may be expressly set forth in this Agreement, no Partner shall have the right to demand or receive the return of any of its aggregate Capital Contributions or any part of its Capital Account or be entitled to receive any interest on its Capital Contributions or its outstanding Capital Account balance.

ARTICLE IV

ALLOCATIONS

     4.01 Allocation of Profits and Losses.

          (a) After giving effect to the allocations required by Section 4.03 of this Agreement, if any, and subject to the other limitations in this ARTICLE IV, Profits and Losses

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for any taxable year of the Partnership shall be allocated to the Capital Accounts of the Partners so as to produce, as nearly as possible, Capital Account balances for the Partners (taking into account all prior allocations and distributions) which equal the amount to which the Partners would be entitled as a liquidating distribution from the Partnership upon a hypothetical liquidation in which the net proceeds were distributed in accordance with the priorities set forth in Section 5.02 and as if the net proceeds available for distribution were an amount equal to the aggregate positive balance in the Partners’ Capital Accounts computed after taking into account all allocations of Profits and Losses (or items thereof) for the taxable year, including those pursuant to this Section 4.01.

          (b) If the allocation of all or any portion of Partnership Losses for a taxable year (or items thereof) would cause or increase a negative balance in the Adjusted Capital Account of any Limited Partner, such Loss (or item thereof) shall be allocated to those Limited Partners, if any, having positive remaining Adjusted Capital Account balances. Any remaining amount of such Partnership Losses (or items thereof) shall be allocated 100 percent (100%) to the General Partner.

     4.02 Special Allocations. The following special allocations shall be made in the following order:

          (a) Except as otherwise provided in Regulations Section 1.704-2(f), notwithstanding any other provision of this ARTICLE IV, if there is a net decrease in Company Minimum Gain with respect to any Fiscal Year, each Partner shall be specially allocated items of Company income and gain for such Year (and, if necessary, subsequent Fiscal Years) in an amount equal to such Partner’s share of the net decrease in Company Minimum Gain, determined in accordance with Regulations Section 1.704-2(g). Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts required to be allocated to each Partner pursuant thereto. The items to be so allocated shall be determined in accordance with Regulations Sections 1.704-2(f)(6) and 1.704-2(j)(2). This Section 4.03(a) is intended to comply with the minimum gain chargeback requirement in Regulations Section 1.704-2(f) and shall be interpreted consistently therewith.

          (b) Except as otherwise provided in Regulations Section 1.704-2(i)(4), notwithstanding any other provisions of this ARTICLE IV, if there is a net decrease in Partner Nonrecourse Debt Minimum Gain attributable to a Partner Nonrecourse Debt during any Fiscal Year, each Person who has a share of the Partner Nonrecourse Debt Minimum Gain attributable to such Partner Nonrecourse Debt, determined in accordance with Regulations Section 1.704-2(i)(5), shall be specially allocated items of Company income and gain for such Year (and, if necessary, subsequent Fiscal Years) in an amount equal to such Partner’s share of the net decrease in Partner Nonrecourse Debt Minimum Gain attributable to such Partner Nonrecourse Debt, determined in accordance with Regulations Section 1.704-2(i)(4). Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts required to be allocated to each Partner pursuant thereto. The items to be so allocated shall be determined in accordance with Regulations Sections 1.704-2(i)(4) and 1.704-2(j)(2). This Section 4.02(b) is intended to comply with the minimum gain chargeback requirement in Regulations Section 1.704-2(i)(4) and shall be interpreted consistently therewith.

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          (c) In the event any Partner unexpectedly receives any adjustments, allocations or distributions described in Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) or (6), items of Company income and gain shall be specially allocated to such Partner in an amount and manner sufficient to eliminate, to the extent required by the Regulations, the Adjusted Capital Account Deficit of such Partner as quickly as possible, provided that an allocation pursuant to this Section 4.02(c) shall be made if and only to the extent that such Partner would have an Adjusted Capital Account Deficit after all other allocations provided for in this ARTICLE IV have been tentatively made as if this Section 4.02(c) were not in this Agreement.

          (d) In the event any Partner has a deficit Capital Account at the end of any Company Fiscal Year which is in excess of the sum such Partner is obligated, or is deemed to be obligated, to restore pursuant to the next-to-last sentences of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5), each such Partner shall be specially allocated items of Company income and gain in the amount of such excess as quickly as possible, provided that an allocation pursuant to this Section 4.02(d) shall be made if and only to the extent that such Partner would have a deficit Capital Account in excess of such sum after all other allocations provided for in this ARTICLE IV have been tentatively made as if this Section 4.02(d) and Section 4.02(c) were not in this Agreement.

          (e) In the event that the Profits available to be allocated to the Partners for any Fiscal Year pursuant to Section 4.01 are less than the maximum amount otherwise allocable to them pursuant thereto, then there shall be specially allocated to the Partners items of Company income and gain equal to such maximum amount.

          (f) Nonrecourse Deductions for any Fiscal Year or other period shall be specially allocated among the Partners in the same manner as if they were Losses for such Year or period.

          (g) Any Partner Nonrecourse Deductions for any Fiscal Year shall be specially allocated to the Partner who bears the economic risk of loss with respect to the Partner Nonrecourse Debt to which such Partner Nonrecourse Deductions are attributable in accordance with Regulations Section 1.704-2(i)(1).

          (h) To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Code Section 734(b) or Code Section 743(b) is required pursuant to Regulations Sections 1.704-1(b)(2)(iv)(m) (2) or (4) to be taken into account in determining Capital Accounts as the result of a distribution to a Partner in complete liquidation of such Partner’s interest in the Company, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis) and such gain or loss shall be specially allocated to the Partners in a manner consistent with the manner in which their Capital Accounts are required to be so adjusted.

     4.03 Curative Allocations. The allocations set forth in Section 4.02, other than Section 4.02(e) (the “Regulatory Allocations”), are intended to comply with certain requirements of the Regulations. It is the intent of the Partners that, to the extent possible, all Regulatory Allocations shall be offset either with other Regulatory Allocations or with special allocations of other items

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of Company income, gain, loss, or deduction pursuant to this Section 4.03. Therefore, notwithstanding any other provision of this ARTICLE IV (other than the Regulatory Allocations), the General Partner shall make such offsetting special allocations of Company income, gain, loss, or deduction in whatever manner it determines appropriate so that, after such offsetting allocations are made, each Partner’s Capital Account balance is, to the extent possible, equal to the Capital Account balance such Partner would have had if the Regulatory Allocations were not part of this Agreement and all Company items were allocated pursuant to Sections 4.01, and 4.04. In exercising its discretion under this Section 4.03, the General Partner shall take into account future Regulatory Allocations under Sections 4.02(a) and (b) that, although not yet made, are likely to offset other Regulatory Allocations previously made under Sections 4.02(f) and 4.02(g).

     4.04 Other Allocation Rules.

          (a) For purposes of determining the Profits, Losses, or any other items allocable to any period, Profits, Losses, and any such other items shall be determined on a daily, monthly, or other basis, as determined by the General Partner using any permissible method under Code Section 706 and the Regulations thereunder.

          (b) Except as otherwise provided in this Agreement, all items of Company income, gain, loss, deduction, and any other allocations not otherwise provided for shall be divided among the Partners in the same proportions as they share Profits and Losses, as the case may be, for the year.

     4.05 Tax Allocations: Code Section 704(c). In accordance with Code Section 704(c) and the Regulations thereunder, income, gain, loss, and deduction with respect to any property contributed to the capital of the Company shall, solely for tax purposes, be allocated among the Partner so as to take account of any variation between the adjusted basis of such property to the Company for federal income tax purposes and its initial Gross Asset Value (computed in accordance with the definition of “Gross Asset Value” above). In the event the Gross Asset Value of any Company asset is adjusted pursuant to any provision of this Agreement in accordance with such definition, subsequent allocations of income, gain, loss and deduction with respect to such asset shall take into account any variation between the adjusted basis of such asset for Federal income tax purposes and its Gross Asset Value in the same manner as under Code Section 704(c) and the Regulations thereunder. Any elections or other decisions relating to such allocations shall be made by the General Partner in accordance with the “Traditional Method” described in Regulations Section 1.704-3(b). Allocations pursuant to this Section 4.05 are solely for purposes of Federal, state, and local taxes and shall not affect, or in any way be taken into account in computing, any Partner’s Capital Account or share of Profits, Losses or other items, or distributions pursuant to any provision of this Agreement.

ARTICLE V

DISTRIBUTIONS

     5.01 Net Cash Receipts. Subject to year end adjustments based on annual audit contemplated at Section 8.04 below and in the definition of Net Operating Cash Receipts, and

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the corresponding adjustment of distributions as soon as practicable after such audit, Net Cash Receipts (including, without limitation, Extraordinary Cash Flow from Capital Transactions that do not constitute a Liquidating Sale – e.g., the sale of one or more, but less than all, of the Properties) shall be distributed by the Company to the Partners in proportion to their Percentage Interests [The confidential material contained herein has been omitted and has been separately filed with the Commission.], by wire transfer to an account as directed from time to time by each of the Partners. Concurrently with each such distribution the General Partner shall provide to each Partner an explanation of the sources of such Net Cash Receipts, detailed on a Property-by-Property basis.

     5.02 Cash Flow from Liquidating Sale. Except as provided in Section 5.03, Extraordinary Cash Flow from a Liquidating Sale shall be distributed by the Company in the following order of priority:

          (a) First, to the Partners until the Partners have received distributions pursuant to this Section 5.02(a) equal to the amount of their Unreturned Capital Contributions (and in the same proportion as the Unreturned Capital Contribution of a Partner bears to the aggregate Unreturned Capital Contributions of all Partners) until the Unreturned Capital Contribution amount of each Partner equals $0.00;

          (b) Next, to the Partners in the amount needed to cause the aggregate distributions to meet the Unleveraged IRR Target amount, and in the same proportion as the Percentage Interests of the Partners at the time of the distribution.

          (c) Next, the balance, if any, [The confidential material contained herein has been omitted and has been separately filed with the Commission.]% to NYSCRF and [The confidential material contained herein has been omitted and has been separately filed with the Commission.]% to the General Partner; provided, however, that if such balance consists, in whole or in part, of Extraordinary Cash Flow from New Development Properties, Redevelopment Properties or Vacant Land Properties (as determined in accordance with the allocation rules set forth in the definition of Unleveraged Development IRR) (such portion of the balance being referred to herein as the “Development Portion”), then the Development Portion shall instead be distributed as follows if either of the following conditions is met: [The confidential material contained herein has been omitted and has been separately filed with the Commission.]

     5.03 Distributions on Liquidation. If prior to a Liquidating Sale the Company shall have undergone one or more Capital Transactions with respect to which the Extraordinary Cash Flow would have been eligible, if it had been received in a Liquidating Sale as of the date of such Capital Transaction, for distribution pursuant to Section 5.02(c), then, upon the subsequent occurrence of an actual Liquidating Sale, the Partners shall re-calculate the Partners’ respective distributions of Extraordinary Cash Flow resulting from such Capital Transaction or Capital Transactions pursuant to Section 5.02 rather than Section 5.01, and NYSCRF shall pay to the General Partner a sum (the “True-up Sum”) equal to that portion of the distributions made to NYSCRF on account of such Capital Transaction or Capital Transactions which is to be re-allocated to the General Partner pursuant to this Section 5.03. Notwithstanding any provision in this Agreement which might otherwise operate to limit the liability of a Partner for any other purpose, such provision shall not limit the liability of NYSCRF for its obligation to pay the True-

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up Sum in accordance with the provisions of this Section 5.03. NYSCRF shall be personally liable for the True-up Sum.

     5.04 Distributions in Kind. All distributions shall be made in cash and no Company assets shall be distributed in kind without the consent of all of the Partners except as provided in Section 10.02(a). Any assets distributed in kind shall be valued for such purpose at their fair market value as of the date of distribution as determined by an independent appraiser selected by the General Partner with the approval of NYSCRF, and shall be treated for the purposes of this ARTICLE V as if the Company had sold such assets at such value and distributed the proceeds of such sale to the Partner or Partners receiving such assets.

     5.05 REIT Distributions. At the option of the General Partner, the Company shall take, and the General Partner is authorized to take, reasonable action which in the opinion of tax counsel selected by the General Partner and reasonably acceptable to NYSCRF, is necessary and consistent with the General Partner’s (or its Affiliate’s) qualification as a REIT, to distribute sufficient amounts pursuant to this ARTICLE V to enable the General Partner to pay shareholder dividends that will (i) enable the General Partner to satisfy the requirements for qualifying as a REIT under the Code and Regulations; and (ii) enable the General Partner (or its Affiliate that is a REIT) to avoid any material federal income or excise tax liability of the General Partner (or its Affiliate that is a REIT) as a result of its status as a REIT, assuming for purposes of this determination that the only items on the federal income tax return of the General Partner (or such Affiliate that is a REIT) are the items shown on its Schedule K-1 received from the Company and all cash distributions received from the Company (less a reasonable allowance for non-deductible administrative costs) have been paid as dividends to the shareholders of the General Partner on the day after such distributions are received from the Company. Any distribution made pursuant to this Section 5.05 shall be made to all Partners in accordance with ARTICLE V. In no event shall NYSCRF incur any cost or expense as a result of this Section 5.05.

     5.06 Offsets.

          (a) Provided that the Manager under the Management and Leasing Agreement is an Affiliate of the General Partner, then in the event that any amounts due from the Manager to the Company under the Management and Leasing Agreement are unpaid and overdue, NYSCRF may cause the Company, after notice to the Manager, to offset the unpaid portion of such amounts claimed against the Manager against amounts due to the General Partner under this Agreement, and further provided that if there is any dispute between the Manager and the Company or NYSCRF as to whether the claim against the Manager is valid, the amount sought to be withheld shall be escrowed until the first to occur of the matter being resolved or the Manager, after written notice from the Company, no longer contesting the validity of the claim, with the interest earned thereon being paid to the party who is ultimately determined to be entitled to the amount claimed or, if it is determined that each party is entitled to a portion of the amount in dispute, pro rata based on the amount paid to each.

          (b) Provided that the Development Manager under the Development Management Agreement is an Affiliate of the General Partner, then in the event that any amounts due from the Development Manager to the Company under the Development Management Agreement are unpaid and overdue, NYSCRF may cause the Company, after notice to the

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Development Manager, to offset the unpaid portion of such amounts claimed against the Development Manager against amounts due to the General Partner under this Agreement, and further provided that if there is any dispute between the Development Manager and the Company or NYSCRF as to whether the claim against the Development Manager is valid, the amount sought to be withheld shall be escrowed until the first to occur of the matter being resolved or the Development Manager, after written notice from the Company, no longer contesting the validity of the claim, with the interest earned thereon being paid to the party who is ultimately determined to be entitled to the amount claimed or, if it is determined that each party is entitled to a portion of the amount in dispute, pro rata based on the amount paid to each.

          (c) Provided that the General Partner is an Affiliate of LPLP, in the event that NYSCRF obtains a final non-appealable judgment against LPLP under the Contribution Agreement that is not paid when due, NYSCRF may cause the Company to offset the unpaid portion of such judgment against amounts due to the General Partner under this Agreement.

ARTICLE VI

MANAGEMENT

     6.01 Management and Control of Company Business.

          (a) Subject to the limitations and restrictions set forth in Section 6.04 and elsewhere in this Agreement and subject to and consistent with the Annual Business Plan, the General Partner shall have full, exclusive, and complete discretion to manage and control the business and affairs of the Company and shall have all of the rights, powers, authorities and discretions necessary to carry out the purposes of the Company which may be possessed by a General Partner under the Act, exercisable without the consent or approval of any Partner, including without limitation, the right, power, authority and discretion to:

               (i) Borrow money and issue evidences of indebtedness, and secure the same by mortgages, deeds of trust, security interests, pledges, or other liens on all or any part of the Company’s assets, provided that such financing shall expressly provide that NYSCRF has no personal liability for the obligations of the Company (unless NYSCRF agrees in writing to waive the requirement that such language be set forth in the documents), and further provided that the total outstanding principal amount of mortgage debt secured by all the Properties shall not at the time of issuance of such debt [The confidential material contained herein has been omitted and has been separately filed with the Commission.]. The Partners expressly acknowledge and agree that the Assumed Financing and the Liberty Loan have been authorized by the Partners.

               (ii) Operate, manage, maintain, use, lease and sublease Company assets;

               (iii) Employ or retain such persons (any of whom may be Affiliates of a Partner, including the General Partner or an Affiliate of the General Partner, subject to the limitations contained in Section 6.02(e)) as may be necessary or appropriate for the conduct of the Company’s business, including permanent, temporary, or part-time employees and

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independent attorneys, accountants, architects, engineers, consultants, contractors and other professionals, and delegate to them any of its rights, powers, authorizations, discretions, duties and responsibilities;

               (iv) Renegotiate with borrowers or lenders for the purchase or repayment of loans at discounted amounts or modifications in the terms of loans;

               (v) Acquire, own, hold, construct, reconstruct, develop, redevelop, rehabilitate, sell, exchange, transfer, or otherwise deal in assets and property as may be necessary or convenient for the purposes and business of the Company;

               (vi) Sell, publicly or privately, contract to sell and grant options to purchase any Company asset, for such prices and upon such terms and conditions, whether for cash or deferred payments, as it determines;

               (vii) Incur expenses and enter into, guarantee, perform, and carry out contracts or commitments of any kind, assume obligations, and execute, deliver, acknowledge, and file documents in furtherance of the purposes and business of the Company;

               (viii) Obtain and maintain insurance against liability or other loss with respect to the activities and assets of the Company;

               (ix) Pay, collect, compromise, arbitrate, litigate, or otherwise adjust, contest, or settle any and all claims or demands of or against the Company;

               (x) Invest in interest-bearing accounts and short-term investments, including, without limitation, bankers’ acceptances, obligations of Federal, state, and local governments and their agencies, money market funds registered under the Investment Company Act of 1940, high-grade commercial paper, and time deposits and certificates of deposit of commercial banks or savings banks;

               (xi) Exercise the rights of the Company, and perform the obligations of the Company, under all covenants, declarations, easements and restrictions encumbering or benefiting the Properties;

               (xii) Form direct or indirect wholly-owned Subsidiaries of the Company to the extent necessary or desirable in connection with obtaining construction or permanent financing permitted herein, and to remove and replace the manager of any such Subsidiary of the Company which is a limited liability company and amend any organizational document governing such Subsidiary; and

               (xiii) Engage in any other kinds of activities and enter into and perform any other obligations necessary to, in connection with, or incidental to, the accomplishment of the purposes and business of the Company, so long as such activities and obligations may be lawfully engaged in or performed by a Company under the Act.

     The acts of the General Partner shall bind the Company when within the scope of the General Partner’s authority.

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          (b) NYSCRF is an investor only and shall have no right to participate in the management or control of the business or affairs of the Company, or to sign for or bind the Company; provided, however, that NYSCRF shall have the approval rights set forth in Section 6.04 and elsewhere in this Agreement.

     6.02 Delegation; Standards; Indemnification.

          (a) Subject to the terms of this Agreement, the General Partner may, at any time, delegate any of its powers, duties and responsibilities to an Affiliate. Any delegation pursuant to this Section 6.02(a) shall not, however, relieve the General Partner of any of its obligations hereunder.

          (b) The Company shall enter into, or cause its Subsidiary that owns Property to enter into:

               (i) a Development Management Agreement with the General Partner or its Affiliate to oversee the construction and development of each New Development and each Redevelopment; and

               (ii) a Management and Leasing Agreement with the General Partner or its Affiliate to cover the management and leasing of each Property owned, directly or indirectly, by the Partnership. The management fees, leasing commissions and finders’ fees payable for the services shall be as set forth in the Management and Leasing Agreement provided that such fees shall not at any time exceed the then current market rates for such services in the area in which the affected Property is located. Notwithstanding the foregoing, in the event that lender approval is not obtained for the assumption of any of the Assumed Financing prior to the contribution or sale of the applicable Entity to the Company, the then-existing management agreement for such Entity (the “Existing Management Agreement”) shall remain in place and effective until such approval is obtained or such Assumed Financing is paid off, defeased or refinanced; provided, however, that as between the “Manager” and the “Owner” under such Existing Management Agreement, the fees and obligations set forth in the form of Management and Leasing Agreement attached hereto as Exhibit B shall control. By executing this Agreement on behalf of the General Partner, LPLP hereby consents to and agrees to be bound by the immediately preceding sentence.

          (c) It is the intention of the Partners that, to the extent feasible, all other actions taken on behalf of the Company shall be taken by the General Partner or its authorized delegates, subject to the provisions of this Agreement and the approval rights of NYSCRF pursuant to Section 6.04.

          (d) The General Partner shall perform its duties hereunder with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims, for the exclusive benefit and protection of the Company, except that the General Partner shall not be required to diversify the Company’s assets.

          (e) In the performance of its duties and responsibilities and the exercise of its right, power, authority and discretion under this Agreement:

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               (i) the General Partner shall act solely in the interests of the Company; and

               (ii) neither the General Partner nor any Affiliate of the General Partner shall (A) deal with the assets of the Company in its own interests or for its own account; (B) in any capacity act in any transaction involving the Company on behalf of any party whose interests are adverse to the interests of the Company; or (C) receive any compensation or consideration for its own personal account from any party dealing with the Company or proposing to deal with the Company in connection with a transaction involving any portion or all of the Property (other than fees for the rendering of maintenance services to the Properties as approved in the Annual Business Plan, provided that the cost of such services will be reimbursed to the General Partner at a rate equal to the General Partner’s direct costs for those services, plus a reasonable allocation of overhead related to providing such services).

          (f) The Company (but not any Partner) shall indemnify, defend and hold harmless the General Partner and the trustees, officers, directors and employees of the General Partner and its Affiliates (collectively the “Indemnified Party”) in the event it was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative by reason of any acts or omissions, or alleged acts or omissions, arising out of the activities of the Indemnified Party on behalf of the Company, or in furtherance of the interests of the Company, against any and all costs, losses, damages or expenses of any nature whatsoever for which such Indemnified Party has not otherwise been reimbursed (including attorneys’ fees, judgments, fines and accounts paid in settlement) actually and reasonably incurred by the Indemnified Party in connection with such action, suit or proceeding so long as the Indemnified Party reasonably believed that its actions were within the scope of this Agreement and the Indemnified Party did not act fraudulently or in bad faith or in a manner constituting negligence or willful misconduct or in breach of the standards set forth in Section 6.02(d), or violate securities laws or criminal laws. The termination of any action, suit or proceeding by judgment, order, settlement or upon a plea of nolo contendere or its equivalent shall not of itself (except insofar as such judgment, order, settlement or plea shall itself specifically provide) create a presumption that the Indemnified Party acted fraudulently or in bad faith or acted in a manner constituting negligence or willful misconduct. The indemnification rights of the Indemnified Party set forth in this Section 6.02(f) shall be cumulative of and in addition to, any and all rights, remedies, and recourse to which it shall be entitled whether pursuant to the provisions of this Agreement, at law, or in equity.

          (g) To the extent permitted by applicable law and except as otherwise provided in this Agreement, the General Partner shall not be answerable for the default or misconduct of any third party agent, investment advisory service, attorney, appraiser, consultant, contractor, engineer, real estate managing agent, accountant or bookkeeper if such Person is not an Affiliate of the General Partner and if selected by the General Partner with reasonable care, unless the General Partner knowingly participates in such wrongdoing, has actual knowledge thereof and fails to take reasonable remedial action, or through negligence in the performance of its own specific responsibilities under this Agreement has enabled such wrongdoing to occur.

          (h) Neither the Company nor any Partner shall have any claim against the General Partner by reason of any act or omission of the General Partner, nor against NYSCRF by

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reason of any act or omission of NYSCRF, except where such claim is based on gross negligence, actual fraud, material, deliberate or willful breach of this Agreement, or intentional tortious misconduct. Notwithstanding anything to the contrary contained herein or in any other agreement executed in connection herewith, but subject to the last sentence of Section 5.03, the General Partner expressly agrees that NYSCRF shall not be liable personally or otherwise for any breach or default by NYSCRF under this Agreement or any other agreement executed in connection with this Agreement, except to the extent of, and only to the extent of, the NYSCRF’s Partnership Interest in the Company. Except only for NYSCRF’s Partnership Interest in the Company, no assets of NYSCRF may be liened, encumbered, attached, levied or executed upon to satisfy any liability of or judgment against NYSCRF arising out of this Agreement or any other agreement executed in connection with this Agreement.

     6.03 Annual Business Plan. The Annual Business Plan shall be the blue print for the management of the business of the Company. The Annual Business Plan for calendar year 2007 is attached hereto as Exhibit E. No later than [The confidential material contained herein has been omitted and has been separately filed with the Commission.], and each [The confidential material contained herein has been omitted and has been separately filed with the Commission.] thereafter, the General Partner shall prepare and deliver to NYSCRF for its review and approval a proposed Annual Business Plan for the next Fiscal Year. NYSCRF shall, within [The confidential material contained herein has been omitted and has been separately filed with the Commission.] days after receipt, provide the General Partner with written comments thereto, and if the Annual Business Plan for the succeeding year is not previously agreed to, the parties shall meet no later than [The confidential material contained herein has been omitted and has been separately filed with the Commission.] of the then current year to agree on such Annual Business Plan. If for any reason at the beginning of any year the Annual Business Plan for such year has not been agreed to, the Company shall continue to operate in accordance with the Annual Business Plan for the prior year, except that [The confidential material contained herein has been omitted and has been separately filed with the Commission.]. Each Annual Business Plan shall, among other information, contain the following information, consistent with the form attached hereto as Exhibit E:

          (a) a summary of the conditions of the leasing, sales and development marketplace in the DC Metropolitan Area (and the General Partner shall forward to NYSCRF copies of marketing reports prepared by third-party real estate firms received by the General Partner summarizing the conditions of leasing and development in the marketplace for commercial office properties in which the various portions of the Property are located);

          (b) the annual operating budget, which shall include the estimated revenues and expenses (including debt service), any anticipated Call for Capital pursuant to Section 3.02(a) and the regular capital expenditures, all for the ensuing Fiscal Year, and a leasing plan for each of the Properties (which leasing plan shall include any proposed changes to the standard form lease; tenant requirements and rental rates; estimated improvements; costs of re-tenanting; leasing commissions; and other non-recurring extraordinary capital expenditures, if any, for the affected Property);

          (c) the amounts of proposed reserves and contingency funds;

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          (d) the recommendation of the General Partner with respect to debt financing to be issued by the Company in the ensuing Fiscal Year;

          (e) the recommendation of the General Partner with respect to the sale of any one or more of the Properties in the ensuing Fiscal Year

          (f) the recommendation of the General Partner with respect to any New Developments to be initiated in the ensuing Fiscal Year, together with a summary of all ongoing development activities under any Development Management Agreements then in effect, and a proposed development budget for all such recommended and ongoing projects; and

          (g) such additional information as may be necessary or appropriate to fully inform the Partners of all matters relevant to the Company and, if their approval is required, to enable the Partners to make an informed decision with respect to their approval of such Plan, or as any Partner shall reasonably have requested;

          (h) and whenever necessary to reflect a material change in any of the information contained in the Annual Business Plan as last submitted to NYSCRF, the General Partner shall submit such changes to NYSCRF for its approval, and upon such approval, such amended Plan shall become the Annual Business Plan.

     6.04 Matters Requiring Approval of NYSCRF. In addition to any other matter pertaining to the Company set forth herein that requires the approval of NYSCRF and in addition to the right of NYSCRF pursuant to Section 6.18, the following actions or decisions with respect to or affecting the Company or Company’s assets shall require the approval of NYSCRF prior to any action by the General Partner (except to the extent that the matter in question is included in, and budgeted for or permitted by, other than in the case of Section 6.04(k), the then applicable Annual Business Plan):

[The confidential material contained herein has been omitted and has been separately filed with the Commission.]

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     6.05 Hazardous Materials. The General Partner shall not knowingly conduct or authorize and shall use its reasonable efforts to prevent a release of Hazardous Materials at any of the Properties and shall promptly notify NYSCRF in writing of any pending or threatened investigation or inquiry by any governmental authority in connection with any Hazardous Materials relating to a Property or of the occurrence of a release of Hazardous Materials at any Property. The General Partner shall promptly notify NYSCRF in writing if the General Partner becomes aware of any release of Hazardous Materials in violation of law originating on the Property, or of any such release originating in a neighboring property that threatens the Property.

     6.06 Emergency Actions. In the event that it is necessary to make expenditures which are not provided for in the Annual Business Plan, or to take any other action which requires the approval of NYSCRF under Section 6.04, but which is required under emergency court order, executive order or legislation, or which the General Partner, in good faith, believes appropriate in an emergency to avoid risk to life or health or facilitate the preservation of any portion or all

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of the Company’s assets, and the General Partner reasonably determines that there is insufficient time to obtain such approval and that any delay in making such expenditures or taking such action could result in a violation of law or materially adversely affect the value of the Company assets or could materially increase the risk to life or health, then the General Partner shall be authorized to bind the Company for any expenditures or in any other action taken on behalf of the Company in such emergency. The General Partner shall notify NYSCRF of any exercise of its power and authority under this Section as soon as practicable thereafter.

     6.07 Regular Meetings.

          (a) The Partners shall meet annually at a time and place determined by the General Partner and reasonably approved by NYSCRF, for a report on the current Fiscal Year’s activities, a review of the most recent financial statements and, when available, a presentation of the next Fiscal Year’s Annual Business Plan, as well as to consider and decide such matters as may be specified by the General Partner or by prior written notice from any Partner to the General Partner. Without limiting the foregoing, the annual meetings shall include a discussion and analysis of (i) anticipated acquisitions and development activities for the ensuing year, and (ii) whether the Company should continue to hold or should sell each Property and any changes in the projected period of continuing to hold any portion or all of the Property. Reasonable notice shall be provided to the Partners of the time and place of such meeting and the matters to be decided or discussed. Any proposal requiring action of the Partners shall be provided to the Partners a minimum of ten (10) business days prior to such meeting. Participation in meetings may be by means of conference telephone call or similar telecommunications whereby all individuals participating in the meeting can hear, and speak to, each other at the same time.

          (b) Voting shall take place at meetings, provided, however, that any Partner may, at any time and without a meeting therefor, notify the General Partner of its vote on any matter requiring such vote, and the General Partner shall tabulate the vote and notify the Partners of such vote promptly thereafter. Voting under this Agreement shall take place in writing and the General Partner shall thereafter confirm the result of the vote of the Partners on any matter in writing.

          (c) Any action which may be taken by the Partners at any meeting may be taken without a meeting pursuant to written consent of all of the Partners.

     6.08 Special Meetings. Any Partner may call a special meeting of the Partners at any time. All of the provisions set forth above with respect to regular meetings shall also apply to any special meetings.

     6.09 Third Parties. Notwithstanding anything to the contrary contained herein, the General Partner may execute a certificate that, except in the case of any matter which requires the approval of NYSCRF pursuant to Section 6.04, may be conclusively relied upon by any third party (without any further inquiry whatsoever) stating that any action or proposed action does not require the approval or consent of the Partners under this Agreement or that such approval or consent has been obtained, and any action taken by the General Partner in connection therewith shall in fact be the act of, and bind, the Company. The foregoing shall not relieve the General Partner from any liability it may have to the Company or the Partners if, in fact, such action or

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proposed action did require the approval or consent of any Partner and such consent or approval was not obtained.

     6.10 Other Activities of Partners. Any Partner and its Affiliates may have other business interests and may engage in other business ventures of any nature or description whatsoever, whether presently existing or hereafter created, and whether or not competitive with the business of the Company or any Partner, provided, however, that during the term of this Agreement the General Partner and its Affiliates shall not acquire or own any office property in the DC Metropolitan Area, except as permitted in ARTICLE XIII below. The rights of NYSCRF under this Section 6.10 are personal to NYSCRF and shall not be enforceable by any assignee or transferee, whether voluntarily or involuntarily or by operation of law, of the rights of NYSCRF under this Agreement, other than a transferee of NYSCRF pursuant to Section 10.02(b).

     6.11 Withholding of Tax on Certain Company Distributions.

          (a) Unless treated as a Tax Payment Loan, any amount paid by the Company for or with respect to any Partner on account of any withholding tax or other tax payable with respect to the income, profits or distributions of the Company pursuant to the Code, the Regulations or any state or local statute, regulation or ordinance requiring such payment (a “Withholding Tax Act”) shall be treated as a distribution to such Partner for all purposes of this Agreement, consistent with the character or source of the income, profits or cash that gave rise to the payment or withholding obligation. To the extent that the amount required to be remitted by the Company under the Withholding Tax Act exceeds the amount then otherwise distributable to such Partner, unless and to the extent that funds shall have been provided by such Partner pursuant to the last sentence of this Section 6.11(a), the excess shall constitute a loan from the Company to such Partner (a “Tax Payment Loan”). Any such Tax Payment Loan shall be payable upon demand and shall bear interest, from the date that the Company makes the payment to the relevant taxing authority, at the lesser of: (i) the Prime Rate plus two percentage points per annum, or (ii) the highest rate permitted by applicable law, compounded monthly (but in no event higher than the highest interest rate permitted by applicable law). During such time as any Tax Payment Loan to any Partner (or the interest thereon) remains unpaid, all future distributions otherwise to be made to such Partner under this Agreement shall be distributed for such Partner’s account by applying the amount of any such distributions first to the payment of any unpaid interest on such Tax Payment Loan and then to the repayment of the principal thereof, and no such future distributions shall be paid to such Partner until all of such principal and interest has been paid in full, but all such amounts shall, for purposes of this Agreement, be treated as a distribution to such Partner. If the amount required to be remitted by the Company under the Withholding Tax Act exceeds the amount then otherwise distributable to a Partner, the Company shall notify such Partner at least five (5) Business Days in advance of the date upon which the Company would be required to make a Tax Payment Loan under this Section 6.11(a) (the “Tax Payment Loan Date”) and provide such Partner the opportunity to pay to the Company on or before the Tax Payment Loan Date, all or a portion of such deficit. If any Tax Payment Loan is not fully repaid before the earlier of (a) removal of the Partner receiving the Tax Payment Loan, or (b) liquidation of the Company, such Partner shall remit any remaining portion of the principal and interests payable on the Tax Payment Loan to the Company.

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          (b) The General Partner shall have the authority to take all actions necessary to enable the Company to comply with the provisions of any Withholding Tax Act applicable to the Company and to carry out the provisions of this Section 6.11. Nothing in this Section 6.11 shall create any obligation on the General Partner to advance funds to the Company or to borrow funds from third parties in order to make any payments on account of any liability of the Company under a Withholding Tax Act.

     6.12 Unrelated Business Taxable Income. The General Partner shall use commercially reasonable efforts to avoid taking any action which it knows or reasonably should know would (a) cause any indebtedness of the Company to not qualify for the exception to “acquisition indebtedness” under Code Section 514(c)(9)(A), or (b) otherwise cause NYSCRF to have a substantial risk of recognizing UBTI (assuming, for this purpose, that NYSCRF is an organization subject to the tax imposed by Code Section 511(a)(1)), provided that any transaction which General Partner determines will create UBTI for NYSCRF shall require NYSCRF’s prior approval. By way of example and without limiting the generality of the foregoing, the General Partner shall use its best efforts to ensure that:

          (a) With respect to any lease executed on behalf of the Company:

               (i) The determination of the amount of rent shall not be expressed in whole or in part as a percentage of the income or profits derived by the lessee from the space leased (other than an amount based on a fixed percentage or percentages of gross receipts or gross sales);

               (ii) Not more than ten percent (10%) of the rent shall be expressly attributable to personal property, determined at the time the personal property is placed in service by the lessee (and not by reference to any allocation contained in the lease documents);

               (iii) If subleasing is permitted, the Company may not share in any net profit derived by the tenant from any sublease, and the tenant thereunder may not sublease all or any portion of its leasehold interest in violation of paragraph (i);

               (iv) No services shall be performed for the tenant other than services usually or customarily rendered to tenants in connection with office space; and

               (v) All tenant payments under the lease shall be designated as “rent” or “additional rent”.

          (b) The General Partner shall not engage in, or cause the Company to engage in, any activity that would cause all or any part of the Property to be considered stock in trade or other property of a kind which would properly be includable in inventory if on hand at the close of the taxable year or property held primarily for sale to customers in the ordinary course of a trade or business of the Company. NYSCRF acknowledges that a decision to sell or otherwise dispose of any property of the Company may cause the Company to engage in commercially reasonable sales activities and the Company and the General Partner are authorized to engage in such activities with respect to Company property to the extent that such sale is authorized or permitted under this Agreement.

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          (c) With respect to any indebtedness incurred by the Company:

               (i) The price for any acquired or improved real property will be fixed at the time of the acquisition of the property or the time of the completion of any such improvement;

               (ii) The amount of any indebtedness or any other amount payable with respect to such indebtedness, or the time for making any payment of any such amount, shall not be dependent, in whole or in part, upon any revenue, income, or profits derived from such real property;

               (iii) Any property acquired by the Company will not be subsequently leased to the seller or to any person who bears a relationship to such seller that is described in Code Section 267(b) or 707(b);

               (iv) Any property of the Company will neither be acquired from nor leased to a person that bears a relationship to the Limited Partner or the Company which is described in subparagraph (C), (E) or (G) of Code Section 4975(e)(2) or a person that bears a relationship, which is described in subparagraph (F) or (H) of Code Section 4975(e)(2), to any person described in subparagraph (C), (E), or (G) of Code Section 4975(e)(2);

               (v) The Company will not incur indebtedness from any person described in Sections 6.12(c)(iii) or 6.12(c)(iv) in connection with any acquisition or any improvement to property; and

               (vi) The provisions of this Section 6.12(c) are intended to comply with the requirements of Code Section 514(c)(9)(B) and should be construed thusly.

     With respect to the foregoing: (A) NYSCRF acknowledges that the requirements of Section 6.12(a) above are satisfied with respect to all existing leases of space in the Properties in effect as of the date of this Agreement and with respect to the standard forms of “Multi-Tenant Office Lease” and “Single-Tenant Office Lease” generally utilized by Affiliates of the General Partner, copies of which the General Partner has previously provided to NYSCRF; and (B) the General Partner shall notify NYSCRF of any proposed changes in the structure or operation of the Company not set forth in the Annual Business Plan that might cause the Company or NYSCRF to incur UBTI, and such change shall not be made without the prior approval of NYSCRF.

     6.13 Prohibited Transactions.

          (a) The General Partner shall use best efforts to avoid taking action which it knows or reasonably should know would constitute a prohibited transaction (within the meaning of Code Section 4975(c)) and would cause NYSCRF (assuming, for this purpose, that NYSCRF is a “plan” within the meaning of Code Section 4975(e)(1)) or any Person who is a disqualified person (within the meaning of Code Section 4975(e)(2)) with respect to NYSCRF to incur a tax under Code Section 4975, without NYSCRF’s prior approval.

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          (b) Notwithstanding any other provisions of this Agreement, other than Section 6.13(a), or any non-mandatory provision of the Act, any action of the General Partner on behalf of the Company or any decision by the General Partner to refrain from acting on behalf of the Company, based on an opinion of tax counsel selected by the General Partner and reasonably acceptable to NYSCRF that such action or omission is necessary or advisable in order to: (i) protect the ability of Liberty Property Trust, a Maryland real estate investment trust which is the general partner of the sole member of Liberty Washington Venture, LLC, to continue to qualify as a REIT under the Code, or (ii) avoid Liberty Property Trust incurring any material taxes under Section 857 or Section 4981 of the Code, is expressly authorized under this Agreement and is deemed approved by all of the Partners.

          (c) At any time when a direct or indirect beneficial interest in the Company is owned by an entity that has elected to be taxed as a REIT under the Code, neither the Company nor any Subsidiary shall without the prior written consent of Liberty: (i) acquire any asset that is not described in Section 856(c)(4)(a) of the Code or any successor provision; (ii) enter into a loan secured by an interest in real property in which the Company would receive income from a “shared appreciation provision” as defined in Section 856(j)(5) of the Code; (iii) enter into a loan in which the interest income depends, directly or indirectly, in whole or in part, on the income or profits of any person for purposes of Section 856(f) of the Code; (iv) enter into any lease involving real property where any portion of the rents would be excluded from the definition of “rents from real property” under Section 856(d)(2) of the Code; or (v) sell any property which, when sold, would constitute property described in Section 1221(1) of the Code, except when the net selling price is less than $10,000. Notwithstanding the foregoing, if any of the provisions of Sections 856 or 857 of the Code are amended so that one of the requirements in clauses (i) through (v) above becomes irrelevant to the qualification of a REIT as a REIT under the Code and will not cause adverse tax consequences to a REIT if the requirement is not complied with, such provision shall no longer apply to the Company.

          (d) In making any determinations under this Agreement in which the classification of any entity as a “real estate investment trust” for federal income tax purposes is relevant, such determination or calculation shall be made by assuming that only the items reported on such entity’s federal income tax return are the items reported on the Partner’s Schedule K-1 received from the Company (or the entity’s distributive share of such items).

     6.14 Deemed Approval. NYSCRF shall be deemed to have approved and the General Partner shall not have any liability or responsibility under either Section 6.12 or Section 6.13, to the extent that the action which caused the Company or NYSCRF to incur UBTI or which constituted a prohibited transaction (a) received the approval of NYSCRF where such approval is required under this Agreement, or (b) resulted from the Company’s failure to take any action proposed by the General Partner and submitted to NYSCRF, if such failure was because such proposed action did not receive the approval of NYSCRF.

     6.15 Reporting Requirements. In addition to any other reporting obligations of the General Partner contained in this Agreement, the General Partner shall:

          (a) (1) notify NYSCRF of any material fire or other material damage to the Property, and in such event, arrange for an insurance adjuster reasonably acceptable to NYSCRF

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to view the Property before repairs are started, but in no event shall Manager settle any losses, complete loss reports, adjust losses or endorse loss drafts in excess of $250,000 without NYSCRF’s prior consent; and (2) promptly notify NYSCRF after the General Partner becomes aware of any significant personal injury or property damage occurring to or claimed by any tenant or third party on or with respect to the Property;

          (b) notify NYSCRF of the commencement of any action, suit or proceeding against NYSCRF, or against Manager with respect to the operations of the Property, or otherwise affecting the Property, other than routine tort claims covered by insurance;

          (c) on or before the 15^th day of each month, prepare and submit to NYSCRF a progress report on leasing activities at the Property for the preceding period, such report to be in the format customarily used by the General Partner and its Affiliates for its own portfolio; and

          (d) notify NYSCRF when the General Partner receives written notice of any material violation of law at any portion of the Property, as well as provide NYSCRF with evidence that the non-compliance has been remedied.

     6.16 Action by Partners. Except as otherwise provided in this Agreement, any action required or permitted to be taken by the Partners shall require the unanimous consent or approval of the Partners, unless otherwise required by the Act.

     6.17 Right to Disclose Information. The General Partner shall not be in breach of its obligations under this Agreement or any other obligations or duties to NYSCRF at law or in equity (whether under a theory of fiduciary duty or otherwise) if the General Partner or its Affiliates files this Agreement (and some or all of the exhibits hereto) as an exhibit to a filing it may make with the Securities Exchange Commission or makes disclosures regarding the transactions governed by this Agreement to the extent the General Partner or its Affiliates reasonably believe necessary to enable the General Partner or its Affiliates to comply with federal and state securities laws and the regulations of the Securities Exchange Commission, the rules of any stock exchange, or in connection with any filing or registration made by Liberty Property Trust, an Affiliate of the General Partner, as the issuer of publicly traded securities, or as part of information provided to its investors and/or financial analysts.

     6.18 Contracts with Affiliates. NYSCRF, acting alone, shall have the right on behalf of the Company to send any notice of default or termination, to institute or settle legal proceedings and/or to take such other action as may be necessary or appropriate to enforce the rights and protect the interests of the Company pursuant to any agreement with the General Partner or an Affiliate of the General Partner or with respect to any other rights or remedies of the Company running against or in connection with the General Partner or Affiliate of the General Partner.

     6.19 Loan Provisions.

          (a) Each Partner shall, in its reasonable discretion, cooperate to amend this Agreement and the Certificate of Limited Partnership if required to comply with the requirements of any lender providing mortgage financing to the Company in accordance with this Agreement.

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          (b) The Partners acknowledge that the Liberty Loan was provided to the Company, and that (with the consent of NYSCRF, as set forth in Section 6.04(l)) future financing may be provided to the Company or any Entity, and/or serviced by an Affiliate of the General Partner (the “Affiliate Lender”). As a result, the interests of the Affiliate Lender, in its capacity as a lender, may be different from, or in conflict with, the interests of the Partners or the interests of the Company or any of their respective Affiliates. In recognition of the foregoing and in consideration of the Affiliate Lender providing or facilitating any such loan, the Partners acknowledge and agree that the Affiliate Lender is and will be entitled to enforce its rights under any existing or future loan (and ancillary security) documents with the Company and/or any Entity and will be entitled to pursue any and all remedies to which it is entitled (including calling a default under, accelerating or foreclosing on any collateral securing, such loan) even if doing so would be detrimental to or create a conflict with the Company and/or such Entity or any of its Partners, and each of the Partners waives, to the fullest extent permitted by law, (i) any right to object to such enforcement, (ii) any right to assert a claim against the General Partner or its Affiliates as a result of such conflict of interest, and (iii) any claim for a breach of fiduciary duty, duty of loyalty, lender liability, equitable subordination or other claims relating to or arising from the fact that the Affiliate Lender and its Affiliates would have an interest, directly or indirectly, as both a creditor and a Partner of the Company. In addition, the classification and treatment for income tax purposes of the Liberty Loan and any other financing provided by an Affiliate of the General Partner as non-recourse debt or non-recourse liability shall be made and governed by the Code.

     6.20 Project Financing.

          (a) The Partners expect that the Company will obtain, or cause certain of the Entities to obtain, debt financing in such amounts, from such lenders, with such security and on such terms and conditions as shall be determined in accordance with this Agreement (collectively with the Assumed Financing, the “Project Financing”).

          (b) All Project Financing will be non-recourse to the Company and to all Partners, except that the General Partner may elect, in its sole discretion, to provide one or more guarantors (the “Guarantors”) acceptable to the lender to be personally liable for: (i) fraud, environmental liability, misapplication of tenant security deposits and other types of liabilities (collectively the “Non-Recourse Carve Outs”) to be set forth in the documents and instruments evidencing the Project Financing, pursuant to provisions acceptable to the Guarantors; and/or (ii) for such other liabilities, if any, under the loan as the Guarantors may elect in their sole discretion, pursuant to documents acceptable to the Guarantors. The personal obligations of the Guarantors as set forth in such loan documents are referred to herein as the “Recourse Obligations.” The Partners confirm that LPLP serves as the Guarantor of the Recourse Obligations with respect to the Assumed Financing and, with respect to the Assumed Financing for WillowWood I-II, Liberty Property Trust also serves as a Guarantor of the Recourse Obligations.

          (c) With respect to all sums that at any time may be paid by a Guarantor on account of the Recourse Obligations, the Partners agree that: (i) the Company shall indemnify, defend and hold the Guarantor harmless from and against all such liabilities and all costs and expenses arising therefrom, (ii) NYSCRF shall indemnify, defend and hold the Guarantor

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harmless from and against all such liabilities and all costs and expenses arising from the gross negligence, actual fraud, material, deliberate and willful breach of this Agreement, or intentional tortious misconduct of NYSCRF that triggers liability under the Recourse Obligations, and (iii) the Guarantor shall be subrogated to the rights of the holder of the Project Financing with respect thereto; provided, however, that the foregoing provisions of (i) and (ii) above shall not apply to any liabilities, costs or expenses of the Guarantor resulting from its or its Affiliate’s gross negligence, actual fraud, material, deliberate or willful breach of this Agreement, its guaranty of the Recourse Obligations or any other documents evidencing the Project Financing, or intentional tortious misconduct; and provided further that subrogation rights of the Guarantor shall be totally subordinated in all respect to the rights of the holder of the Project Financing and shall not be enforceable until satisfaction of all obligations of the Company and the borrower Entity under the Project Financing.

          (d) At any time while the Recourse Obligations are outstanding in whole or in part, the Company shall not be authorized to take, and the General Partner shall not permit the Company or any Entity to take, any action that would result in the triggering of liability under the Non-Recourse Carve Outs, without the prior written consent of the Guarantors, which may be withheld for any reason or no reason. Without limiting the generality of the foregoing, without the consent of the Guarantors, the Company and the Entity shall not be authorized to commence and the General Partner shall not commence, any voluntary proceeding for bankruptcy, reorganization or similar relief, and shall not consent to any involuntary petition for such relief if such action would trigger any liability under the Recourse Obligations. The Partners expressly waive any rights that they may have at any time, whether under a theory of fiduciary duty or under any other legal or equitable principle, to compel the Partnership or the Entity to commence a voluntary bankruptcy proceeding or themselves to initiate an involuntary bankruptcy proceeding, or to assert any claims against the General Partner or its Affiliates for the failure to file a voluntary proceeding.

     6.21 Title Holding Subsidiaries. Title to each Property may be held by a separate, single purpose, limited liability company or partnership that is wholly owned by, and whose only members, partners and/or managers are, the Company and other limited liability companies wholly owned (directly or indirectly) by the Company (each a “Title Holding Subsidiary”). It shall be the General Partner’s duty and responsibility to duly form and maintain each Title Holding Subsidiary and cause each Title Holding Subsidiary to be and remain in good standing in its state of organization and qualified to do business in each jurisdiction in which it owns property or otherwise conducts business, to obtain appropriate employer and/or tax identification numbers (to the extent required) for the Title Holding Subsidiary, and the like. The rights, duties, responsibilities and authority of the Partners with respect to Title Holding Subsidiaries and Properties owned through a Title Holding Subsidiary shall be identical to their respective rights, duties, responsibilities and authority with respect to the Company and Properties owned directly by the Company. Any provision of this Agreement giving the Partners the right or authority to take any action or refrain from taking any action, or cause the Company to take any action or refrain from taking any action, shall be interpreted to give them the identical right or authority with respect to the appropriate Title Holding Subsidiary. Any provision of this Agreement imposing any duty or responsibility on the Partners, or limiting their respective rights or authority, with respect to Properties owned directly by the Company shall be interpreted to impose the identical duty, responsibility or limitation on them with respect to Properties owned

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through a Title Holding Subsidiary. The operating agreement for each Title Holding Subsidiary shall be in a form approved by the Partners.

     6.22 Ratification of Recitals. The Recitals set forth on Exhibit H to this Agreement are incorporated herein by reference. The Partners hereby ratify and consent to the transactions described in the Recitals to this Agreement.

ARTICLE VII

COMPENSATION OF PARTNERS; PAYMENT OF COMPANY EXPENSES

     7.01 Compensation from Company. The Company shall pay to the General Partner (or its Affiliate) the sum of [The confidential material contained herein has been omitted and has been separately filed with the Commission.] annually as an administrative fee in compensation for the General Partner’s services required hereunder. Except as aforesaid and as provided in Section 7.02, no Partner shall receive any compensation from the Company for any services rendered in its capacity as a Partner. Nothing contained herein shall prevent (i) a Partner from receiving reasonable compensation for any services rendered to the Company in a non-Partner capacity or from receiving distributions under ARTICLE V, (ii) the General Partner or its Affiliate from receiving fees pursuant to the Development Management Agreement, or (iii) the General Partner or its Affiliate from receiving fees for managing or leasing all or a portion of the Property pursuant to the Management and Leasing Agreement.

     7.02 Company Expenses.

          (a) The Management and Leasing Agreement shall require the General Partner or its Affiliate, at its expense and without reimbursement from the Company, to provide the Company with adequate personnel and office space and all necessary office furnishings and equipment and shall pay the salaries and other compensation of such personnel and the cost of telephone service, heat and other utilities and other items of an overhead and administrative nature.

          (b) The Company shall bear all other costs and expenses incurred in connection with the management and operation of the business and affairs of the Company, or in carrying out the business, purposes, and objectives of the Company, including without limitation, costs associated with a proposed transaction that is not consummated for any reason whatsoever. Without limiting the foregoing, the Company shall bear the costs of all third-party vendors who provide services to the Company (including without limitation auditors, tax consultants and attorneys). Subject to Sections 6.04(a) and 6.04(b) to the extent the General Partner or its Affiliates are able to provide such services to the Company, the General Partner may (subject to the prior approval of NYSCRF) provide such service to the Company, and the Company will compensate the General Partner or its Affiliates at a level that will reimburse the direct costs of those services, plus a reasonable allocation of overhead related to providing such services.

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ARTICLE VIII

COMPANY BOOKS, RECORDS AND STATEMENTS

     8.01 Books and Records. The General Partner shall establish and maintain accurate, full and complete Company records and books of account showing assets, liabilities and the Capital Accounts of the Partners, revenues and expenditures, and all other aspects of the operations, transactions and cash flows of the Company in accordance with generally accepted accounting practices and principles consistently applied. The Company shall use the standard accounting software utilized by the General Partner and its Affiliates for properties in their own portfolio to keep the accounting books and records of the Company. The General Partner shall also maintain books sufficient to show the computation of any fees payable pursuant to the Management and Leasing Agreement and the Development Management Agreement. The Company’s books and accounts shall be maintained at the principal office of the Company, with copies thereof at such other place or places, if any, as may be required by law, and any Partner shall have access to the Company books during ordinary business hours.

     8.02 Method of Accounting. The Company shall use generally accepted accounting principles, consistently applied, unless otherwise required by applicable law. Any other or supplemental accounting practices or policies shall be subject to the reasonable approval of NYSCRF.

     8.03 Fidelity and Other Bonds. If requested by either Partner, the General Partner shall obtain or cause to be obtained, at the Company’s expense, fidelity and other bonds with reputable surety companies covering all persons who are signatories on bank accounts of the Company, which bonds shall indemnify and defend the Partners against any loss resulting from fraud, theft, dishonesty or other wrongful acts of such persons and shall be in form and substance satisfactory to the Partners.

     8.04 Financial Statements; Appraisals and Other Information. The General Partner shall cause the Company to deliver, timely, to NYSCRF, the following:

          (a) On an annual basis within sixty (60) days after the close of each Fiscal Year, annual audited statements of the operation of the Company, including the following:

               (i) Balance Sheet prepared on an accrual basis;

               (ii) Income Statement prepared on an accrual basis;

               (iii) Statement of Cash Flows;

               (iv) Statement of Changes in Partners’ Equity; and

               (v) Notes to the financial statements as appropriate;

all certified to be correct by the General Partner, together with the opinion of the Auditor with respect thereto, containing a detailed explanation of all qualifications, if any, contained in such opinion. If the General Partner is aware that the Auditor’s opinion will be issued with

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qualifications, the General Partner shall cause drafts of the opinion and the financial statements to be forwarded to NYSCRF promptly after receipt of such drafts by the General Partner.

               (vi) Such additional financial statements, reports and other information as NYSCRF may reasonably request; and

               (vii) Report of Independent Public Accountants in substantially the form shown in the Exhibit J.

          (b) On a monthly basis, by the [The confidential material contained herein has been omitted and has been separately filed with the Commission.] business day of each calendar month for the preceding calendar month, the following, unaudited, but all in reasonable detail and certified to be correct by the General Partner, and in an electronic format on a Property-by-Property basis:

               (i) A current rent roll in form satisfactory to NYSCRF;

               (ii) Balance Sheet, prepared on an accrual basis;

               (iii) Income Statement, prepared on an accrual basis;

               (iv) Budgetary operating statement on a consolidated basis for all Properties, showing variances from the operating budget together with explanations of any variances in excess of the greater of $5,000 in any line item or 5% of the annual amount budgeted for such line item;

               (v) A Leasing Update in substantially the format attached hereto as Exhibit G; and

               (vi) Such interim financial statements, reports and other information as NYSCRF may reasonably request.

          (c) No later than thirty-five (35) days after the end of each quarter of each Fiscal Year, the General Partner shall prepare and submit to the Partners an unaudited income statement and balance sheet as of the end of such quarter and a statement of the Capital Accounts for each Partner, and a report on all lawsuits filed by and served or threatened in writing against the Company, the General Partner or the Property during such prior quarter.

          (d) To the extent any of the financial statements or reports provided pursuant to paragraphs (b) or (c) above (other than the statement of Capital Accounts) is presented on a consolidated basis as among all the Properties, the General Partner shall also cause such statements and reports to be broken down on a Property-by-Property basis.

          (e) On an annual basis, promptly after the filing thereof, copies of all tax returns or information returns of the Company to the extent necessary to show any income, distributions, payments, deductions, or expenses related to or arising out of the ownership or operation of a Project. At least thirty (30) days prior to filing, the General Partner shall provide drafts of all tax returns to NYSCRF.

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          (f) Within fifteen (15) days after the end of a policy year or policy term for each policy of insurance required to be maintained with respect to the Property, a written report or certificate showing the following:

               (i) The name of the insurer;

               (ii) The risks insured;

               (iii) The amount of coverage provided by the policy;

               (iv) The expiration date of the policy; and

               (v) For insurance covering property damage, the property insured, the then-current replacement cost of such property, and the basis upon which such cost was calculated provided that no appraisal shall be required for such report or certificate.

          (g) The General Partner shall cause the Properties to be appraised by an independent qualified appraiser designated by the General Partner (i) at the expense of the Company at such times as any secured lender requires, and (ii) at any other time whenever requested to do so by any Partner, at the expense of such Partner.

          (h) The General Partner shall cooperate with, and assist NYSCRF in obtaining, at the expense of NYSCRF, any information that it requests in order to properly value the Company’s assets and its Partnership Interest. Such information may include, by way of illustration, information obtainable from an environmental investigation or other physical inspection of the Properties.

          (i) NYSCRF shall have the right, at its sole expense, to cause an audit of the records of the Company to be conducted by accountants selected by NYSCRF. In the event that such audit discloses that any payments or reimbursements in favor of NYSCRF or the Company should be adjusted by five percent (5%) or more, the General Partner shall reimburse NYSCRF for its reasonable out of pocket costs incurred in conducting the audit.

     8.05 Bank Accounts. All funds received by the Company shall be deposited in the name of the Company in such checking and savings accounts, time deposits or certificates of deposit, or other accounts or instruments at such financially sound commercial banks, savings banks and savings and loan institutions not then controlled, directly or indirectly, by the General Partner and its Affiliates, as may be designated by the General Partner. The signatories for such accounts and instruments shall be representatives of the General Partner.

     8.06 Tax Matters.

          (a) The General Partner shall cause to be prepared and filed timely all informational and other tax returns required to be filed by the Company, and shall deliver copies thereof to the Partners promptly thereafter. All such returns shall be prepared by or reviewed by the Auditor.

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          (b) The General Partner is hereby designated as the “Tax Matters Partner” under Code Section 6231(a)(7). The Tax Matters Partner shall manage audits of the Company conducted by the Internal Revenue Service or other governmental agency pursuant to the audit procedures under the Code and the regulations issued thereunder, provided that the Tax Matters Partner shall not settle any matter with the Internal Revenue Service or other governmental agency without the consent of NYSCRF, which consent shall not be unreasonably withheld. The Company, through the Tax Matters Partner, is authorized to cooperate with and to monitor the Internal Revenue Service in any audit that the Internal Revenue Service may conduct of the Company’s books and records and information or other returns filed by the Company. The Tax Matters Partner shall take all actions necessary to preserve the rights of the Partners with respect to audits and shall provide the Partners with any notices of such proceedings and other information as required by law. The Tax Matters Partner shall keep the Partners timely informed of its activities under this Section. The Company, through the Tax Matters Partner, may similarly cooperate with and monitor any audit by any other governmental authority and prepare and file protests or other appropriate responses to such audits. All costs incurred in connection with the foregoing activities, including legal and accounting costs, shall be borne by the Company. Any additional expenses with respect to judicial review of adverse determinations in connection with any such tax audits or the defense of any Partner against any claim asserted by the Internal Revenue Service or other tax authority of additional tax liability arising out of its ownership of its interest in the Company shall be borne by the Partner who wishes to proceed with such judicial review or defense. Unless otherwise expressly prohibited or restricted pursuant to this Agreement, the Tax Matters Partner may make, refrain from making, or revoke any and all tax elections which it may deem appropriate, in its sole discretion, on behalf of the Company.

          (c) Neither the Company nor any Partner shall take any action that would result in the Company being taxed as other than a “partnership” for federal income tax purposes, including (but not limited to) electing to be taxed as other than a “partnership” by making such an election on Form 8832, “Entity Classification Election.”

     8.07 Certain Elections.

          (a) In the event that a distribution of any of the Company’s assets is made in the manner provided in Code Section 734, where a transfer of an interest in the Company permitted by this Agreement is made in the manner provided in Code Section 743, or in any other circumstance permitting an election to be made under Section 754 of the Code, then, upon the request and at the expense of any Partner, the Company shall file an election under Code Section 754, in accordance with procedures set forth in the applicable Regulations. The Partners’ Capital Accounts shall be adjusted in accordance with Regulations Section 1.704-1(b)(2)(iv)(m). Each Partner shall provide the Company with all information necessary to give effect to any election under Code Section 754.

          (b) In the event of any change in the Code or Regulations which could affect any Partner and with respect to which the Company may elect to either have such change apply, or not apply, then the Company will make such election or not make such election in a manner that the tax provisions contained in this Agreement shall remain in effect unless all of the Partners agree that the Company should make such election or not make such election in another

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manner; provided, however, that if NYSCRF (at its expense) obtains an opinion, from recognized tax counsel selected by NYSCRF and reasonably satisfactory to the General Partners, that solely on account of the Company’s making the election or the Company’s failing to make the election will (based upon the assumptions set forth in Section 6.12) cause (i) the allocations to NYSCRF under ARTICLE IV to be UBTI, (ii) NYSCRF no longer to be a “qualified organization” (within the meaning of Code Section 514(c)(9)(C)), or (iii) any indebtedness of the Company to not qualify for the exceptions to “acquisition indebtedness” under Code Section 514(c)(9)(A), then the Company shall make such election or refrain from making such election in the manner specified by NYSCRF, and the Partners shall promptly modify this Agreement in a manner to maintain as nearly as possibly the same economic effect on the Partners as would have existed had such election been made or not been made, as the case may be, to the maximum extent permitted by applicable law, but in no event shall such change have a negative economic impact on the General Partner.

          (c) ERISA Representations. NYSCRF, in connection with representations made or that may be made to one or more Lenders regarding the status of the Company as not being an employee benefit plan as defined in ERISA, and regarding the Company’s assets not being considered to be “plan assets” pursuant to certain Department of Labor Regulations, represents and warrants to the Company and the General Partner that NYSCRF is a governmental plan as defined in section 3(32) of ERISA.

ARTICLE IX

DEFAULT PROVISIONS

     9.01 Events of Default. The occurrence of any one or more of the following events (each a “Default”) caused or suffered by any Partner shall constitute a default (subject to the grace periods provided for herein) under this Agreement:

          (a) The failure of such Partner to pay any portion of any Capital Contribution required to be made by it within ten (10) days of the date when due;

          (b) The failure of such Partner to perform or comply with any of the material covenants, conditions and agreements of this Agreement or the Contribution Agreement to be performed or complied with by such Partner other than as set forth in (a) above and to cure such failure within the time specified in Section 9.02;

          (c) The Bankruptcy of such Partner;

          (d) In the case of the General Partner, the attachment, execution or other judicial seizure of more than $50,000 of such General Partner’s assets related to the Company, which attachment, execution or seizure remains undischarged after fifteen (15) days, unless (i) such Partner posts a sufficient bond within such fifteen (15) day period or (ii) such attachment, execution or seizure does not have a material effect on such Partner’s ability to satisfy its obligations hereunder.

     9.02 Grace Period. With respect to any Default under Section 9.01(b), the Partner causing or suffering such Default shall have a grace period of [The confidential material contained herein has been omitted and has been separately filed with the Commission.] days after receipt of

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written notice of such Default to cure such Default, provided, however, that (a) if such Default is curable but cannot with due diligence and in good faith be cured within such [The confidential material contained herein has been omitted and has been separately filed with the Commission.] day period and (b) if such Partner forthwith upon notice of such Default commences and proceeds with due diligence and in good faith to cure such Default and thereafter completes the full cure of such Default, the grace period with respect to such Default shall be extended for such period as may be necessary for the curing of such Default with due diligence and in good faith, not to exceed [The confidential material contained herein has been omitted and has been separately filed with the Commission.] days.

     9.03 Remedies Reserved. Upon any Default by any Partner, such Partner shall no longer have the right to vote on, consent to, approve or otherwise take part in any decision of the Partners, and, in addition, the other Partners shall each have the rights and remedies specified herein as well as those available to non-defaulting Partners as a matter of law or equity; provided, however, that if the defaulting Partner is the General Partner, then it shall continue to have all of the management rights of the General Partner under this Agreement, and provided further than if the default by the General Partner constitutes fraud, the General Partner’s management of the affairs of the Company shall be subject to the reasonable oversight of the Advisor.

ARTICLE X

TRANSFER OF PARTNERSHIP INTERESTS;
SALE OF PROPERTY

     10.01 Transfer.

          (a) The term “Transfer,” when used with respect to a Partnership Interest, shall include any direct or indirect sale, assignment, gift, bequest, succession through intestacy, pledge, hypothecation, mortgage, exchange, or other disposition, except that such term shall not include: (i) any pledge or mortgage of a Partnership Interest or other hypothecation of or granting of a security interest in a Partnership Interest in connection with any financing obtained by or on behalf of the Company and approved pursuant to Section 6.04(l) of this Agreement, or (ii) the sale, issuance, assignment, gift, bequest, succession through intestacy, pledge, hypothecation, mortgage, exchange, or other disposition of shares of beneficial interest in Liberty Property Trust or of limited partnership units in Liberty Property Limited Partnership (or their respective successors through merger, consolidation or sale of all or substantially all of the assets or beneficial interests). For purposes of the foregoing, a change in the trustee of any trust that is a Partner or an Affiliate of any Partner shall not be treated as a Transfer.

          (b) Except as provided in Section 10.02, no Partner may Transfer its Partnership Interest, in whole or in part, directly or indirectly, without the approval of the other Partners and, if required by any loan documents entered into by the Company, any third party lender. Any Transfer or purported Transfer of any Partnership Interest not made in accordance with the foregoing shall be null and void and in breach of this Agreement.

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     10.02 Approved Transfers.

          (a) Anything in Section 10.01 to the contrary notwithstanding, the General Partner may, without the consent of the other Partner, undergo a Transfer, in whole but not in part: [The confidential material contained herein has been omitted and has been separately filed with the Commission.]

          (b) Anything in Section 10.01 to the contrary notwithstanding, NYSCRF may, without the consent of the other Partner [The confidential material contained herein has been omitted and has been separately filed with the Commission.]

          (c) Upon any Transfer undertaken in accordance with Section 10.02, the transferring Partner shall promptly deliver to the non-transferring Partner (i) an assignment and assumption agreement, in form and substance reasonably acceptable to the non-transferring Partner, whereby the transferring Partner assigns, and the transferee accepts and assumes, all of the transferring Partner’s rights, obligations and liabilities hereunder, and (ii) the other instruments contemplated by Sections 10.04(b)-(f); provided the requirements of Section 10.04(a) shall not apply to any such Transfer. Upon the delivery to the non-transferring Partner of the instruments referenced in clauses (i) and (ii) above, if the transfer results in a new Partner (as opposed to the acquisitions of interests in the existing Partner), the transferring Partner shall withdraw from the Company in accordance with Section 10.03 and be released from all liability hereunder, and the transferee shall be deemed admitted as a Partner pursuant to Section 10.04 and shall be deemed to have assumed all of the rights, duties, obligations and liabilities of the transferring Partner under this Agreement.

          (d) Anything in this Section 10.02, or otherwise in this Agreement, to the contrary notwithstanding, no Transfer or assignment of a Partnership Interest shall be made (i) if such Transfer is effectuated through an “established securities market” or a “secondary market” (or the substantial equivalent thereof) within the meaning of Section 7704 of the Code or such Transfer causes the Company to be taxed as a “publicly traded partnership” as such term is defined in Sections 469(k)(2) or 7704(b) of the Code; or (ii) if such Transfer, in the opinion of counsel selected by the General Partner and reasonably acceptable to NYSCRF, would not allow Liberty Property Trust to continue to be taxed as a REIT under the Code or would subject Liberty Property Trust to any material taxes under Sections 857 or 4981 of the Code..

     10.03 Withdrawal of a Partner. A Partner may voluntarily withdraw from the Company only upon a Transfer of all of such Partner’s Partnership Interest in accordance with this

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ARTICLE X. If any Partner withdraws from the Company in violation of this Agreement, it shall not be entitled to any distributions from the Company as a result of such withdrawal, but shall remain entitled to those distributions it would be entitled to receive had the withdrawal not occurred.

     10.04 Admission of Transferee as a Partner. Any Person to whom all of a Partnership Interest has been transferred pursuant to Section 10.01(b) or Section 10.02 shall be admitted as a substituted Partner as a result of such transfer to the extent of the Partnership Interest so transferred only upon the satisfaction of all of the following conditions:

          (a) The unanimous approval of the other Partners, provided however, that no Partner shall unreasonably withhold its approval to any transferee becoming a substituted Partner if such transferee in the reasonable judgment of the General Partner has (together with any guarantor of its obligations) a net worth sufficient to fund any outstanding obligations it might have under this Agreement and expressly agrees in writing to fulfill such obligations;

          (b) Such transferee’s written acceptance of, and written agreement to be bound by, all of the terms and provisions of this Agreement;

          (c) Reasonable evidence of the authority of such transferee to become a Partner and to be bound by all of the terms and provisions of this Agreement;

          (d) The approval of any third party lender if required by any loan documents entered into by the Company;

          (e) An opinion of counsel reasonably satisfactory to counsel for the Company that such transfer, and the transferee’s participation in the Company as a Partner, will not (A) adversely affect the status of a Partner as a REIT (if it is not the transferor), or (B) violate any then applicable Federal or other securities laws or the rules and regulations of the Securities and Exchange Commission or the securities commission of any other jurisdiction; and

          (f) The satisfaction of such additional requirements as any Partner may reasonably determine to assure itself that neither it nor the Company will incur any new or additional liability or obligation as a result of such transfer or purchase.

Anything herein to the contrary notwithstanding, any transferee who does not become a substituted Partner shall be only entitled to receive the share of Profits, Losses and distributions of the Company to which the transferor was entitled with respect to the Partnership Interest so transferred, and shall not have any right to vote on, consent to, approve or otherwise take part in any decision of the Partners, or to any of the other rights associated with the ownership of such Partnership Interest.

     10.05 Admission of Additional Partners. Notwithstanding anything to the contrary contained in this Agreement, no Person may be admitted as an additional Partner without the unanimous approval of each the Partners, which approval may be withheld in the sole discretion of such Partner.

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ARTICLE XI

DISSOLUTION AND LIQUIDATION

     11.01 No Dissolution, etc. The Company shall not be dissolved by the admission of any new or additional Partner, and the Partners hereby waive any right they may have to seek a partition of the Company Assets or to dissolve the Company except in accordance with this Agreement.

     11.02 Events Causing Dissolution. Subject to Section 11.03, the Company shall be dissolved and its affairs wound up upon the occurrence of any of the following events:

          (a) The sale or other disposition by the Company of all or substantially all of the Company’s assets and the collection of all amounts derived from any such sale or other disposition, including all amounts payable to the Company under any promissory notes or other evidences of indebtedness taken by the Company in connection with such sale or other disposition (unless the General Partner shall elect, with the approval of NYSCRF, to distribute such indebtedness to the Partners in liquidation);

          (b) The withdrawal (except in accordance with Section 10.03), liquidation, dissolution or Bankruptcy of the General Partner; or

          (c) The occurrence of any event not specified above that, under the Act or other applicable laws, would cause the dissolution of the Company or that would make it unlawful for the business of the Company to be continued.

For purposes of this Agreement, the term “Bankruptcy” shall mean, and a Partner shall be deemed “Bankrupt” upon, (i) the entry of a final and appealable decree or order for relief of such Partner by a court of competent jurisdiction in any involuntary case involving such Partner under any bankruptcy, insolvency, or other similar law now or hereafter in effect and the expiration of the applicable appeals period without any appeal being filed; (ii) the appointment of a receiver, liquidator, assignee for the benefit of creditors, custodian, trustee, sequestrator, or other similar agent for such Partner or for any substantial part of such Partner’s assets or property; (iii) the entry of a final non-appealable order for the winding up or liquidation of such Partner’s affairs by a court of competent jurisdiction in any involuntary case involving such Partner under any bankruptcy, insolvency, or other similar law now or hereafter in effect; (iv) the filing with respect to such Partner of a petition in any such involuntary bankruptcy case which petition remains undismissed for a period of 90 days; (v) the commencement by such Partner of a voluntary case under any bankruptcy, insolvency, or other similar law now or hereafter in effect; (vi) the consent by such Partner to the entry of an order for relief in an involuntary case under any such law or to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator, or other similar agent for such Partner or for any substantial part of such Partner’s assets or property; or (vii) the making by such Partner of any general assignment for the benefit of creditors.

     11.03 Rights to Continue Business of Company. Upon an event described in Sections 11.02(a), 11.02(b) or 11.02(c) (but not an event described in Section 11.02(c) that makes it

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unlawful for the business of the Company to be continued), the Company thereafter shall be dissolved and liquidated unless, within 90 days after the event described in such Section, an election to reconstitute and continue the business of the Company shall be made in writing by all of the Partners.

     11.04 Dissolution. Except as otherwise provided in Section 11.02 and Section 11.03, upon the dissolution of the Company, the General Partner (or if the dissolution is caused by the withdrawal or Bankruptcy of the General Partner, then the Person designated as liquidating trustee by the remaining Partners, which liquidating trustee shall have all of the powers of the General Partner under this Agreement for purposes of winding up the affairs of the Company) shall promptly notify the Partners of such dissolution.

     11.05 Liquidation.

          (a) Except as otherwise provided in Section 11.03, upon the dissolution of the Company, the General Partner (or other Person responsible for winding up the affairs of the Company) shall proceed without any unnecessary delay to sell or otherwise liquidate the Company’s assets and pay or make due provision for the payment of all debts, liabilities, and obligations of the Company.

          (b) After adequate provision has been made for the payment of all debts, liabilities, and obligations of the Company, the General Partner (or other Person responsible for winding up the affairs of the Company) shall distribute the net liquidation proceeds to the Partners in accordance with ARTICLE V.

     11.06 Reasonable Time for Winding Up. A reasonable time shall be allowed for the orderly winding up of the business and affairs of the Company and the liquidation of its assets pursuant to Section 11.05 in order to minimize any losses otherwise attendant upon such a winding up.

     11.07 Termination of Company. Except as otherwise provided in this Agreement, the Company shall terminate when all of the Company’s assets shall have been converted into cash and the net proceeds therefrom, as well as any other liquid assets of the Company, after payment of or due provision for the payment of all debts, liabilities, and obligations of the Company, shall have been distributed to the Partners as provided for in Section 11.05, and all instruments recorded or filed in the manner required by the Act.

ARTICLE XII

BUY-SELL

     12.01 [The confidential material contained herein has been omitted and has been separately filed with the Commission.]

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     12.02 [The confidential material contained herein has been omitted and has been separately filed with the Commission.]

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     12.03 [The confidential material contained herein has been omitted and has been separately filed with the Commission.]

     12.04 [The confidential material contained herein has been omitted and has been separately filed with the Commission.]

     12.05 [The confidential material contained herein has been omitted and has been separately filed with the Commission.]

ARTICLE XIII

ACQUISITIONS, NEW DEVELOPMENTS AND REDEVELOPMENTS

     13.01 Exclusive Operations Except as expressly provided for in this ARTICLE XIII, neither the General Partner nor its Affiliates shall, directly or indirectly, purchase, develop or redevelop office properties within the DC Metropolitan Area.

     13.02 Yield Parameters. The Company’s initial yield parameters are summarized in Exhibit I. Modification of these parameters shall be subject to the approval of both the General Partner and NYSCRF.

     13.03 New Acquisitions.

          (a) The General Partner may propose from time to time in a written recommendation (an “Acquisition Plan”) to NYSCRF that the Partnership acquire from a third party one or more of the following: (i) land in the DC Metropolitan Area that is suitably zoned and entitled (with the exception of site plan approval and building permits) for development as an office building and which upon acquisition by the Company would be treated as a Vacant Land Property under this Agreement, (ii) land and improvements in the DC Metropolitan Area that are intended to be rehabilitated as a Redevelopment Property, or (iii) a Functional Office Property in the DC Metropolitan Area. The Acquisition Plan shall contain: (i) the maximum purchase price the General Partner would cause the Company to pay for the subject property, (ii) a description of the office market within which such property or properties are located, (iii) a summary of the existing leases (if any) of space within such property or properties, and (iv) with

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respect only to an Acquisition Plan relating to a proposed Redevelopment Property, a preliminary capital budget for the renovation costs and a preliminary estimate of the stabilized rentals projected to be generated from such property after completion of the renovations. NYSCRF will respond with its approval or disapproval of each Acquisition Plan (or of each property that is the subject thereof, if more than one) within twenty-five (25) days after receipt of the Acquisition Plan (and NYSCRF shall have the full 25 day period to respond and elect to participate in the project even if a shorter period is indicated or identified by the Acquisition Plan). If NYSCRF fails to respond in such twenty-five (25) day period, it shall be deemed to have disapproved such Acquisition Plan. The Company shall not undertake the acquisition of any land or buildings unless the acquisition has been recommended by the General Partner and approved by NYSCRF, either pursuant to the Annual Budget process or pursuant to an Acquisition Plan. Due diligence respecting the acquisition of Vacant Land, property suitable as Redevelopment Property and Functional Office Property shall be undertaken in accordance with the procedures set forth on Exhibit K.

          (b) If the General Partner identifies land in the DC Metropolitan Area that may be suitable for development as an office building but requires rezoning or other entitlements that are not available as a matter of right as a condition to such a development and use (a “Speculative Parcel”), the General Partner (or its Affiliate) shall be free to acquire the Speculative Parcel for its own account and to pursue all appropriate rezoning, variances or other entitlements necessary for such development and use. If the General Partner subsequently determines that the necessary entitlements will not be readily obtainable or that the Speculative Parcel is not otherwise suitable or feasible for development as an office building, the General Partner (or its Affiliate) shall be free to sell the Speculative Parcel to any third party on terms acceptable to the General Partner and such third party. If the General Partner subsequently obtains the necessary entitlements for development and use of the Speculative Parcel as an office building, the General Partner (or its Affiliate) shall offer the Speculative Parcel for sale to the Company at a price equal to the fair market value of the Speculative Parcel, and the General Partner shall prepare and submit to NYSCRF an Acquisition Plan with respect thereto. The General Partner and NYSCRF shall endeavor in good faith to agree upon the fair market value of the Speculative Parcel (as approved with such entitlements), but in no event shall the fair market value of the Speculative Parcel be less than the sum of (i) the purchase price paid therefor by the General Partner, plus (ii) all carrying costs incurred with respect to the Speculative Parcel, plus (iii) all out of pocket costs incurred by the General Partner to obtain the necessary entitlements. If the parties fail to agree on the fair market value of the Speculative Parcel within sixty (60) days after the submission of the aforementioned Acquisition Plan, the parties shall endeavor in good faith to select a qualified appraiser with substantial appraisal experience in the DC Metropolitan Area commercial real estate market to determine the fair market value of the Speculative Parcel, and the determination of such appraiser shall be final. If the parties do not agree on the designation of a single appraiser, each party shall appoint a separate qualified appraiser, and the appraisers so appointed shall mutually select a third qualified appraiser with substantial appraisal experience in the DC Metropolitan Area commercial real estate market, and the determination of fair market value by such third appraiser shall be final

          (c) If NYSCRF disapproves the acquisition of the Speculative Parcel or a parcel identified as the subject of an Acquisition Plan (an “Acquisition Parcel”) by the Company, the General Partner (or its Affiliate) shall be free to acquire and develop the Speculative Parcel

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or Acquisition Parcel for its own account substantially in accordance with the information submitted to NYSCRF in the Acquisition Plan.

     13.04 Initiation of New Developments and Redevelopments. Upon the General Partner’s determination that it is appropriate to initiate a New Development on any of the Vacant Land Properties or to initiate the rehabilitation of a Redevelopment Property (a “Redevelopment”), the General Partner shall so notify NYSCRF in writing, which notice shall be accompanied by the following (collectively, a “Development Plan”): (a) Preliminary Plans and Specifications, (b) leasing commitments, if any, (c) a Preliminary Project Budget, including a pro forma operating budget, (d) a description of the office market and leasing conditions for the market in which the New Development or Redevelopment is located, (e) a proposed Sources and Uses of Funds, identifying any construction financing proposed by the General Partner for funding some or all of the costs of such project, and (f) any other information in the General Partner’s or its Affiliates’ possession which would be relevant to NYSCRF’s decision to approve the Company’s proceeding with such New Development or Redevelopment. Within thirty-five (35) days after receipt, NYSCRF shall elect either (i) to fund its Percentage Interest of the cost of the New Development or Redevelopment pursuant to Section 3.02(a) and approve the General Partner or its Affiliate acting as Development Manager pursuant to a Development Management Agreement, or (ii) to permit the General Partner or its Affiliate to develop the designated site for its own account. If NYSCRF fails to respond within such thirty-five-day period, it shall be deemed to have made the election under clause (ii) above. Due diligence respecting the construction of improvements on Vacant Land shall be undertaken in accordance with the procedures set forth on Exhibit L.

     13.05 [The confidential material contained herein has been omitted and has been separately filed with the Commission.]

     13.06 Disapproval of Proposed New Development or Redevelopment. If NYSCRF does not approve a New Development or Redevelopment, the General Partner or its Affiliate may, within thirty (30) days after NYSCRF has disapproved the New Development or Redevelopment or after expiration of the period during which NYSCRF is required to notify the General Partner of its approval, purchase the Vacant Land Property or Redevelopment Property (whichever is appropriate) on which the New Development or Redevelopment was proposed by the General Partner, for purposes of developing it in accordance with the Development Plan that was submitted to NYSCRF under Section 13.04. The purchase price (the “GP Price”) shall be the sum of (i) the cost to the Company for such Property, (ii) all non-interest carrying costs incurred by the Company related to its ownership of such Property such as real estate taxes, security, maintenance and insurance, (iii) interest on the amount referenced in (i) at the simple rate of

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seven percent (7%) per annum from the date of the Company’s acquisition of the subject Property, and (iv) all transfer costs incurred as part of the conveyance, with the exception of title costs and transfer taxes, which shall be shared by the Company and the General Partner, as seller and buyer respectively, in a manner consistent with local custom.

     13.07 First Refusal and Repurchase Rights. With respect to any New Development or Redevelopment that is disapproved (or deemed disapproved) by NYSCRF pursuant to Section 13.04 and with respect to which the General Partner or its Affiliate has elected to purchase the underlying Property as permitted in Section 13.06, the Company and NYSCRF shall have the following rights, which will be memorialized in an instrument placed of record against the Property being transferred:

          (a) [The confidential material contained herein has been omitted and has been separately filed with the Commission.]

          (b) [The confidential material contained herein has been omitted and has been separately filed with the Commission.]

          (c) [The confidential material contained herein has been omitted and has been separately filed with the Commission.]

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ARTICLE XIV

MISCELLANEOUS PROVISIONS

     14.01 Additional Actions and Documents. Each Partner shall take or cause to be taken such further actions and shall execute, acknowledge, deliver, and file such further documents and instruments, and use reasonable efforts to obtain such consents, as may be necessary or as may be reasonably requested in order to maintain the Company pursuant to the terms and conditions of this Agreement.

     14.02 Notices. All notices, demands, requests or other communications (collectively, “Notices”) which may be or are required to be given, served, or sent by any party to any other party pursuant to this Agreement shall be in writing and shall be hand delivered or mailed by first-class, registered or certified mail, return receipt requested, postage prepaid, or transmitted by telegram, facsimile transmission (at the number set forth below on the signature page, with the original to be sent the same day by mail as provided above) or by Federal Express or other recognized overnight delivery service addressed to the recipient at its address set forth below (or at such other address as the recipient may have theretofore designated in writing). Each Notice which shall be hand delivered or mailed in the manner described shall be deemed sufficiently given, served, sent, received, or delivered for all purposes at such time as it is delivered to the addressee (with the return receipt, the delivery receipt, or the affidavit of messenger being deemed conclusive (but not exclusive) evidence of such delivery or at such time as delivery is refused by the addressee upon presentation). Each Notice which shall be by facsimile transmission in the manner described above shall be deemed sufficiently given, served, sent, received, or delivered for all purposes at such time as the original is delivered to the addressee or delivery is refused by the addressee. Subject to the above, all Notices shall be addressed as follows:

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          (a) If to the Company, at the Company’s principal office, with copies to each Partner; and

          (b) If to any Partner, at the address set forth below its name on the execution page of this Agreement, or to such other address as any Partner may specify for itself by written notice given in accordance with this Section.

     14.03 Survival and Reliance. All covenants, agreements, statements, representations, warranties, and indemnities made in this Agreement shall survive the execution and delivery of this Agreement and the termination of the Company, and may be relied upon by each of the Partners.

     14.04 Waivers. Except as otherwise provided herein, neither the waiver by a Partner of a breach of or a default under any of the provisions of this Agreement, nor the failure of a Partner, on one or more occasions, to enforce any of the provisions of this Agreement or to exercise any right, remedy, or privilege hereunder shall thereafter be construed as a waiver of any subsequent breach or default of a similar nature, or as a waiver of any such provisions, rights, remedies, or privileges hereunder.

     14.05 Exercise of Rights. Except as expressly provided herein, no failure or delay on the part of a Partner or the Company in exercising any right, power, or privilege hereunder and no course of dealing between the Partners or between a Partner and the Company shall operate as a waiver thereof and no single or partial exercise of any right, power, or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. Except as otherwise provided herein, any Partner shall have the right to seek specific performance of the duties and obligations set forth in this Agreement. The rights and remedies herein are cumulative and not exclusive of any other rights or remedies which a Partner or the Company would otherwise have at law or in equity or otherwise.

     14.06 Binding Effect. Subject to any provisions hereof restricting assignment, this Agreement shall be binding upon and shall inure to the benefit of the Partners and their respective successors and assigns.

     14.07 Limitation on Benefits of this Agreement. No person or entity other than the Partners and the Company is or shall be entitled to bring any action to enforce any provision of this Agreement against any Partner or the Company. All covenants, undertakings, and agreements set forth in this Agreement shall be solely for the benefit of, and shall be enforceable only by, the Partners (or their respective successors and assigns as permitted hereunder) and the Company.

     14.08 Amendment Procedure. Any amendment to this Agreement shall be in writing and require the unanimous approval of all of the Partners.

     14.09 Entire Agreement. This Agreement contains the entire agreement among the Partners with respect to the transactions contemplated herein, and supersedes all prior oral or written agreements, commitments, or understandings with respect to the matters provided for herein.

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     14.10 Pronouns, Time. All pronouns and terms hereof and any variations thereof shall be deemed to refer to the masculine, feminine, neuter, singular, or plural, as the identity of the person or entity may require. If any period or time set forth in this Agreement begins, ends or occurs on a day other than a Business Day, then such period or time shall instead begin, end or occur on the next Business Day.

     14.11 Headings. Article and Section headings contained in this Agreement are inserted for convenience of reference only, shall not be deemed to be a part of this Agreement for any purpose, and shall not in any way define or affect the meaning, construction, or scope of any of the provisions hereof.

     14.12 Governing Law. This Agreement, the rights and obligations of the parties hereto, and any claims or disputes relating thereto, shall be governed by and construed in accordance with the laws of the State of Delaware (but not including the choice of law rules thereof).

     14.13 Partner’s Representatives. Each Partner shall at all times designate at least one individual as its representative for the purposes of communicating with the Company and the other Partners. The Company and each Partner shall be entitled to rely (and shall be protected in such reliance) on communications from any such representative with respect to required consents and approvals and other required or desired matters arising under this Agreement. Any Partner may designate one or more replacement representatives for itself by written notice to the other Partners. The initial representative of each Partner is set forth below such Partner’s signature on the execution page of this Agreement.

     14.14 Execution in Counterparts. To facilitate execution, this Agreement may be executed in as many counterparts as may be required, and it shall not be necessary that the signatures of all persons required to bind any party appear on each counterpart, but it shall be sufficient that the signature of, or on behalf of, each party, or that the signatures of the Persons required to bind any party, appear on one or more of the counterparts. All counterparts shall collectively constitute a single agreement. It shall not be necessary in making proof of this Agreement to produce or account for more than a number of counterparts containing the respective signatures of, or on behalf of, all of the parties hereto. Faxed or electronically delivered signatures shall be enforceable as originals against the party delivering such signatures.

     14.15 Affirmative Action Policy. The Partners recognize the benefits of affirmative action in fostering opportunities for the equal participation of minority and women-owned business enterprises, and minority and women employees and principals are given the opportunity to participate in the performance of contracts entered into by the Company. This Company believes the opportunity for full participation in the free enterprise system by persons traditionally, socially and economically disadvantaged is essential to obtain social and economic equality. Accordingly, it is the policy of the Company to foster and promote the participation of such individuals and business enterprises in its contracts. The Company expects all concerned to afford all persons equal employment opportunities without discrimination.

     14.16 Advisor. NYSCRF has informed the General Partner, and the General Partner acknowledges, that NYSCRF has engaged the services of Heitman Capital Management LLC (who, together with any other entity hereafter appointed by Limited Partner, is referred to herein

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as “Advisor”) in connection with this Agreement. NYSCRF has named Anthony Ferrante, Jerome J. Claeys and Howard Edelman (representatives of Advisor) to act as its representatives. The General Partner agrees that, notwithstanding the identification of the representatives of NYSCRF, other individuals representing NYSCRF (individually, a “CRF Representative” and, collectively, “CRF Representatives”) shall be entitled to participate in meetings and other communications between any the General Partner and NYSCRF, and that any information provided to NYSCRF’s representatives shall concurrently be provided to any CRF Representative identified in writing to the General Partner. The General Partner shall have the right to rely on the written approval or disapproval of any matter from the NYSCRF representatives identified in this Section or otherwise designated by NYSCRF and identified to the General Partner in writing.

     14.17 Insurance. The Company shall maintain, or cause its Affiliate to maintain, insurance on the Properties of such types and in such amounts and with such insurers as the General Partner and NYSCRF shall reasonably agree. Such insurance shall conform to the minimum standards for property, commercial general liability and fidelity insurance identified in Exhibit M. Any decision to insure the Properties below these minimum standards shall be subject to the approval of both the General Partner and NYSCRF.

     14.18 Legal Representation of the Company. Wolf, Block, Schorr and Solis-Cohen LLP (“Wolf Block”) represented the General Partner in the preparation and negotiation of this Agreement, and the parties agree that such representation will not disqualify Wolf Block from representing the Company. Furthermore, if Wolf Block is engaged by the Company to represent the Company, Wolf Block will not be disqualified from thereafter representing the General Partner or its Affiliate; provided, however, that the foregoing shall not apply to waive any objection NYSCRF may have with respect to the representation by Wolf Block of (i) the General Partner or its Affiliate in litigation against the Company, or (ii) the Company in litigation against the General Partner or its Affiliate.

     14.19 Special Covenants. So long as any of the Properties is subject to mortgage financing requiring the borrower to be a “single purpose entity”, the Company shall cause the Subsidiary that is the subject of such loan to comply with (and to the extent required by the applicable loan documents, the Company shall comply with) the single purpose entity requirements set forth in the loan document for such financing.

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     IN WITNESS WHEREOF, each of the undersigned has caused this Agreement to be duly executed on its behalf, as of the day and year first above set forth.

PARTNER	PERCENTAGE INTEREST
NEW YORK STATE
COMMON RETIREMENT FUND		75	%

Thomas P. Dinapoli, Comptroller of the
State of New York, as Trustee of the
Common Retirement Fund

By:	/s/ NICK SMIRENSKY
	Name: Nick Smirensky
	Title: Deputy Comptroller

Addresses for Notices:

New York State Common Retirement Fund
c/o Office of the State Comptroller
59 Maiden Lane, 30^th Floor
New York, NY 10038-4502
Attn: Assistant Comptroller for Real Estate
Fax No.: 212-383-1331
Telephone No.: 212-383-1508

with copies to:

New York State Common Retirement Fund
c/o Office of the State Comptroller
59 Maiden Lane, 30^th Floor
New York, NY 10038-4502
Attn: Assistant Deputy Counsel
Fax No.: 212-681-1331
Telephone No.: 212-383-1330

with copies to:

Cox, Castle & Nicholson LLP
2049 Century Park East, 28th Floor
Los Angeles, CA 90067-3284
Attn: Amy H. Wells, Esq.
Fax No.: 310-277-7889
Telephone No.: 310-284-2233

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with copies to:

Heitman Capital Management LLC
191 North Wacker Drive
Suite 2500
Chicago, IL 60606
Attn: Jerome Claeys
Fax No.: 312-251-5445
Telephone No.: 312-541-6740

and with copies to:

Heitman Capital Management LLC
191 North Wacker Drive
Suite 2500
Chicago, IL 60606
Attn: Anthony Ferrante
Fax No.: (312) 541-6789
Telephone No.: (312) 251-5458

[Signatures Continued on Next Page]

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[Signatures Continued from Previous Page]

PARTNER	PERCENTAGE INTEREST
LIBERTY WASHINGTON VENTURE, LLC		25	%

By Liberty Property Limited Partnership,
its sole member

By Liberty Property Trust,
its sole general partner

By:	/s/ MICHAEL T. HAGAN
Name:	MICHAEL T. HAGAN
Title:	CHIEF INVESTMENT OFFICER
By:	/s/ WILLIAM P. HANKOWSKY
Name:	WILLIAM P. HANKOWSKY
Title:	CHAIRMAN, PRESIDENT AND CEO

Addresses for Notices:

500 Chesterfield Parkway
Great Valley Corporate Center
Malvern, PA 19355
Attn: Michael T. Hagan
Fax No. 610-644-4129
Telephone No. 610-648-1716

with copy to:

Wolf, Block, Schorr and Solis-Cohen
1650 Arch Street, 22nd Floor
Philadelphia, PA 19103-2097
Attention: Herman C. Fala
Facsimile: 215-405-2976

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EX-10.19

Exhibit 10.19

CONTRIBUTION AGREEMENT

AMONG

NEW YORK STATE COMMON RETIREMENT FUND

AND

LIBERTY PROPERTY LIMITED PARTNERSHIP

AND

LIBERTY WASHINGTON, LP

TABLE OF CONTENTS

		Page
1.	CONTRIBUTION OF OWNERSHIP INTERESTS		1
	1.1 Description of the Ownership Interests		1
	1.2 Description of the Property		1
	1.3 Schedule of Parcels		2
	1.4 Value of the Interests		2
2.	FORMATION OF THE COMPANY; CONTRIBUTIONS; CLOSING PROCEDURES		2
	2.1 Contribution Procedures		2
	2.2 Tax Treatment		3
3.	PRE-CLOSING MATTERS		3
	3.1 Information Provided to NYSCRF		3
	3.2 Additional Service Contracts		3
	3.3 Additional Tenant Leases		3
	3.4 Existing Loans		3
	3.5 Estoppel Letters		4
4.	REPRESENTATIONS, WARRANTIES AND COVENANTS		4
	4.1 Liberty’s Representations and Warranties		4
	4.2 Delivery of Documents		8
	4.3 Knowledge Defined		8
	4.4 Liberty’s Covenants		8
	4.5 Indemnity For Breach by Liberty		10
	4.6 NYSCRF’s Representations and Warranties		10
5.	CONDITIONS OF CLOSING		11
	5.1 Closing Conditions For NYSCRF’s Benefit; Removal of a Parcel		11

		Page
	5.2 Conditions Precedent for Liberty’s Benefit		12
6.	CLOSING		13
	6.1 Closing		13
	6.2 Title Insurance		15
	6.3 Delivery of Documents, Possession, Keys and Other Items		15
	6.4 Closing Costs; Transfer Taxes		15
7.	PRORATIONS		16
	7.1 Initial Proration		16
	7.2 Adjustments; Reproration		17
	7.3 Indemnity		17
8.	SURVIVAL		18
	8.1 Survival		18
9.	COMMISSIONS		18
	9.1 Liberty’s Indemnity		18
	9.2 NYSCRF’s Indemnity		18
10.	FURTHER INSTRUMENTS		19
11.	TERMINATION AND REMEDIES		19
	11.1 Liberty’s Default		19
	11.2 NYSCRF’s Default		19
	11.3 Costs and Expenses; Limitation		20
	11.4 Limitation of NYSCRF Liability		20
12.	RISK OF LOSS		20
13.	PROVISIONS REGARDING HAZARDOUS SUBSTANCES		21
	13.1 Definitions		21
	13.2 Liberty’s Environmental Representations and Warranties		22

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		Page
	13.3 Environmental Covenant		22
	13.4 Environmental Indemnification		22
14.	NO ASSUMPTION		24
	14.1 No Assumption		24
15.	NOTICES		24
	15.1 Notices		24
16.	MISCELLANEOUS		25
	16.1 Entire Agreement		25
	16.2 Counterparts		25
	16.3 Time of the Essence		25
	16.4 Assignment		25
	16.5 Dates		26
	16.6 Binding on Successors and Assigns		26
	16.7 Records		26
	16.8 Confidentiality and Public Disclosure		26
	16.9 Termination		26
	16.10 Reporting Person		26
	16.11 Paragraph Headings		26
	16.12 Facsimile Signatures		26
	16.13 Exculpation		27
	16.14 AS IS		27
	16.15 Governing Law		28
	16.16 Receipt of Written Notice Defined		28

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CONTRIBUTION AGREEMENT

     THIS CONTRIBUTION AGREEMENT (the “Agreement”) is entered into among NEW YORK STATE COMMON RETIREMENT FUND (“NYSCRF”), LIBERTY PROPERTY LIMITED PARTNERSHIP, a Pennsylvania limited partnership (“Liberty”), and LIBERTY WASHINGTON, LP, a Delaware limited partnership (the “Company”).

     1. CONTRIBUTION OF OWNERSHIP INTERESTS

     1.1 Description of the Ownership Interests. In consideration of the terms and conditions hereinafter set forth, Liberty shall contribute, or cause to be contributed, to the Company, all of Liberty’s ownership interests (the “Contributed Interests”) in certain of those entities identified on Exhibit A attached hereto (each a “Contributed Entity” and collectively, the “Contributed Entities”), including, without limitation, the following:

          (a) Liberty’s voting, approval and consent rights with respect to the Contributed Entities, whether under the Contributed Entities’ Operating Agreements (as defined in Section 4.1(a)(ii)) or state law;

          (b) Liberty’s rights to cash flow distributions, and other payments or distributions of capital, return on capital, reimbursements, repayments, fees, surplus, profits, sales proceeds or borrowings of or from the Contributed Entities (whether during the term of the Contributed Entities or in connection with the liquidation of the Contributed Entities), to the extent arising from and after the Closing Date; and

          (c) Liberty’s right to any allocations of tax items of the Contributed Entities that accrue for tax purposes on or after the Closing Date (as defined in Section 6.1).

The terms Purchased Entities (as defined in Schedule 2.1(b)(ii) attached hereto) and Contributed Entities are sometimes referred to herein individually as an “Entity” and collectively as the “Entities”.

     1.2 Description of the Property. Each Entity owns, directly or indirectly, either solely or together with another Entity, one or more office properties as expressly identified on Exhibit A attached hereto, including all of the following described property with respect to the applicable office property (collectively, the “Property”):

          (a) Land. The real property at the addresses identified on Exhibit B attached hereto and more fully described on Exhibit B attached hereto, together with all rights and appurtenances pertaining to such real property, including, without limitation, all cross access/reciprocal access easements and any and all right, title, and interest of the Entities in and to adjacent roads, alleys, easements, streets and ways (collectively, the “Land”);

          (b) Improvements. All physical improvements, structures and fixtures owned by the Entities and placed, constructed or installed on the Land (collectively, the “Improvements”);

          (c) Tenant Leases. The Entities’ interest in leases and rental agreements with tenants occupying space situated in the Improvements or otherwise having contractual rights with regard to use of the Land or the Improvements as of the Closing Date (collectively, the “Tenant Leases”), and all existing unapplied security deposits or like payments, if any, paid

by tenants under the Tenant Leases or other security provided in connection with the Tenant Leases and identified on the Rent Roll (as defined in Section 4.1 hereof);

          (d) Service Contracts. The Entities’ interest in all (i) management and/or brokerage contracts relating to the Land or Improvements; (ii) maintenance, repair, service and pest control contracts relating to the Land or Improvements; and (iii) other contracts pursuant to which services or goods are provided to the Land or Improvements, not to include any management agreement affecting the Land or Improvements (collectively, the “Service Contracts”);

          (e) Warranties, etc. The Entities’ interest in all warranties, guaranties and bonds relating to the Land and the Improvements;

          (f) Plans. All site plans, surveys, plans and specifications, floor plans, art work, brochures, and tenant correspondence files in each Entity’s possession or in the possession of Liberty’s leasing and management agents for the Property and which relate specifically to the Land or the Improvements; and

          (g) Intangible Property. All intangible property owned or held by the Entities or in which an Entity has an interest, if any, and the right to the use thereof, including but not limited to, the Entities’ rights under governmental permits or approvals (to the extent same are assignable) and the right to the use of (without warranty as to exclusivity or otherwise) the names, trade marks, trade names and telephone numbers and listings employed exclusively in connection with the Land or the Improvements or the operations thereon (the “Intangible Property”).

     1.3 Schedule of Parcels. The Property consists of separate parcels, each of which is identified on Exhibit A hereto and referred to herein individually as a “Parcel”, and collectively as the “Parcels”. Each Parcel is owned directly or indirectly by the Entity identified on Exhibit A.

     1.4 Value of the Interests. The Parties acknowledge and agree that the Interests, as hereinafter defined, have the gross value ascribed to them on Exhibit A, which ascribed value is referred to herein as the “Gross Asset Value”.

     2. FORMATION OF THE COMPANY; CONTRIBUTIONS; CLOSING PROCEDURES

     2.1 Contribution Procedures. When the conditions to Closing (as defined in Section 6.1) set forth in Sections 5.1 and 5.2 have been satisfied or waived by the party for whose benefit the conditions are included, the following shall occur:

          (a) Formation of Company. The parties shall execute and deliver the Limited Partnership Agreement of the Company in the form of Exhibit F (the “Partnership Agreement”). Liberty hereby designates Liberty Washington Venture, LLC (the “LLC”) to receive the general partnership interests in the Company to which Liberty is entitled by reason of its contributions hereunder. The LLC has filed or caused to be filed the certificate of limited partnership for the Company with the Secretary of State of the Sate of Delaware on September 21, 2007.

          (b) Capital Contributions.

               (i) On the day prior to the Closing Date, subject to the adjustments provided for herein, in consideration of the terms and conditions set forth herein,

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NYSCRF shall contribute cash to the Company an amount (herein referred to as the “Contribution Amount”) equal to $415,063,748.00.

               (ii) On the Closing Date, the parties shall undertake the Additional Closing Procedures described on Schedule 2.1(b)(ii) attached hereto, in the order set forth therein. The transactions described in Schedule 2.1(b)(ii) shall result in Liberty making a capital contribution to the Company on behalf of the LLC in the aggregate amount of $138,354,583.00.

          (c) Closing Costs. The Company shall pay all Closing Costs.

          (d) Management and Leasing Agreement. Immediately following the completion of the contributions referred to in Section 2.1(b) above, the Company shall cause its subsidiaries that own the Parcels to enter into a Management and Leasing Agreement in the form of Exhibit G, attached hereto, for its respective parcel (the “Management Agreement”). Notwithstanding the foregoing, in the event that lender approval is not obtained for the assumption of any of the Assumed Financing (as defined in Section 3.4) prior to the contribution or sale of the applicable Entity to the Company, the then-existing management agreement for such Entity (the “Existing Management Agreement”) shall remain in place and effective until such approval is obtained or such Assumed Financing is paid off, defeased or refinanced; provided, however, that as between the Manager and the “Owner” under such Existing Management Agreement, the fees and obligations set forth in the form of Management and Leasing Agreement attached hereto as Exhibit G shall control.

     2.2 Tax Treatment. Upon completion of the events described in Section 2.1, except as otherwise provided herein, the transaction contemplated hereby will be treated, for federal income tax purposes, as a contribution to the Company of a twenty-five percent (25%) undivided interest in the Contributed Interests in exchange for an interest in the Company and a sale to the Company of a seventy-five percent (75%) undivided interest in the Contributed Interests in exchange for an amount realized equal to the amount of the Merger Loan (and all other indebtedness or liabilities to which the Contributed Interests are subject or treated as subject for tax purposes).

     3. PRE-CLOSING MATTERS

     3.1 Information Provided to NYSCRF. NYSCRF acknowledges that Liberty has furnished or made available to NYSCRF all of the items described on Exhibit D attached hereto (collectively, the “Due Diligence Items”).

     3.2 Additional Service Contracts. From and after the date hereof, and continuing until Closing or the earlier termination of this Agreement (in whole or, with respect to any Interest being terminated pursuant to this Agreement, in part), Liberty shall not enter into any new Service Contracts with respect to the Property without the prior consent of NYSCRF, which consent shall not be unreasonably withheld, conditioned or delayed.

     3.3 Additional Tenant Leases. From and after the date hereof, and continuing until Closing or the earlier termination of this Agreement (in whole or, with respect to any Contributed Interest being terminated pursuant to this Agreement, in part), Liberty shall not enter into any new Tenant Leases with respect to the Property without the prior consent of NYSCRF, which consent shall not be unreasonably withheld, conditioned or delayed.

     3.4 Existing Loans. Nine (9) of the Parcels are currently encumbered by mortgage loans, and one (1) Contributed Entity currently maintains a secured revolving line of credit, each as more particularly shown on Schedule 3.4 attached hereto (collectively, the “Existing Loans"). Liberty intends to undertake the following actions with respect to the Existing Loans at

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or before Closing, all at the sole cost and expense of the Company: (i) the construction loan currently encumbering 1129 20th Street, NW will be repaid in full; (ii) the line of credit will be repaid in full; (iii) the mortgage loans currently encumbering Lakeside I & II and WillowWood III & IV will be defeased in accordance with the procedures described in Schedule 2.1(b)(ii); and (iv) the remaining Existing Loans will remain in place and will be “assumed” by the Company. The Existing Loans described in Clauses (i)-(iii) above are referred to herein as the “Satisfied Loans”, and the Existing Loans described in Clause (iv) above are referred to herein as the “Assumed Financing”. The Assumed Financing and the Liberty Loan are referred to herein collectively as the “Permanent Financing”.

     3.5 Estoppel Letters. Liberty shall use diligent efforts to obtain and deliver to NYSCRF, on or before the Closing Date, estoppel letters, substantially in the form of Exhibit J attached hereto, or, in the case of leases with the General Services Administration (the “GSA”), a Lease Status Report in the GSA’s standard form, executed by tenants occupying more than 25,000 square feet of the Property on the date of this Agreement.

     4. REPRESENTATIONS, WARRANTIES AND COVENANTS

     4.1 Liberty’s Representations and Warranties. Liberty represents and warrants to NYSCRF (and to the Company, as of the Closing Date) as follows (which representations and warranties shall be true and correct as of the date hereof and as of the Closing):

          (a) Entities.

               (i) Each Entity is a duly formed, validly existing limited liability company or limited partnership organized under the laws of the State of Delaware and is duly qualified or registered to do business in the Commonwealth of Virginia or the District of Columbia, as applicable based upon the location of the Parcel owned by such Entity, if any.

               (ii) The limited liability company agreement or partnership agreement, whichever is applicable (the “Operating Agreements”), of each Entity is in full force and effect, has not been modified, supplemented, amended or terminated and, together with the applicable Certificate of Formation or Certificate of Limited Partnership, constitutes the sole agreement and understanding (written or oral) among the parties thereto with respect to the applicable Entity. A true and correct copy of the Operating Agreement of each Entity has been delivered to NYSCRF.

               (iii) On the Closing Date, Liberty will be the only beneficial and legal owner of the Contributed Interests, free and clear of all liens, security interests, pledges, assignments, claims, options, encumbrances, charges, commitments, and equitable interests or rights of others, of any kind whatsoever, other than the Assumed Financing and the Merger Loan.

               (iv) Neither Liberty nor any Entity is the subject of any bankruptcy or other insolvency proceeding.

               (v) The Entities have no assets other than their direct or indirect interest in the Property as shown on Exhibit A, and, where applicable, direct or indirect ownership interests in Entities that own the Property.

               (vi) The Entities have not conducted any business that is unrelated to their respective ownership of the Property and, where applicable, direct or indirect ownership interests in Entities that own the Property.

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               (vii) No Entity employs employees who manage, maintain or service the Property and whom the Company would be obligated to employ subsequent to Closing. There are no collective bargaining agreements or other similar contracts or agreements with any labor union or bargaining unit respecting the Property or the Entities.

               (viii) None of the Entities is a “foreign person” within the meaning of Sections 1445 and 7701 the Internal Revenue Code of 1986, as amended (hereinafter, the “Code”).

               (ix) The Entities are not delinquent in filing any tax returns which are required to have been filed by them. The Entities have no outstanding liability for any Taxes (as hereinafter defined), with the exception of Tax for the current tax year that are to be allocated between Seller and Buyer as set forth in Section 7.1(f). “Tax” means any federal, state, county, provincial, local or foreign income, gross receipts, sales, use, ad valorem, employment, severance, transfer, gains, profits, excise, franchise, property, capital stock, premium, minimum and alternative minimum or other taxes, fees, levies, duties, assessments or charges of any kind or nature whatsoever imposed by any government, any governmental entity, department, commission, board, agency or instrumentality, and any court, tribunal or judicial body, in each case whether federal, state, county, provincial, local or foreign (“Governmental Authority”), whether such Tax is payable directly or by withholding, together with any interest, penalties (civil or criminal), additions to or additional amounts imposed by, any Governmental Authority with respect thereto.

          (b) Property.

               (i) Title. Each Entity or its subsidiary that is the fee owner of the Parcel in question, holds or will hold as of Closing, a title insurance policy insuring fee simple ownership of the Land and the Improvements for its respective Parcel. To Liberty’s knowledge, the Entities do not own or lease any personal property in connection with the Land and Improvements.

               (ii) Litigation. There is no pending nor, to Liberty’s knowledge, threatened litigation or administrative proceedings that, if resolved adversely to Liberty or any Entity would adversely affect title to the Property or any part thereof or the ability of Liberty to perform any of its obligations hereunder or the use of the Property by the Company as it is presently being used or otherwise materially and adversely affect the Property, except as set forth on Schedule 4.1(b)(ii) (the “Existing Litigation”).

               (iii) Notice of Liens. Liberty has not received written notice of the intention of any governmental authority to file or impose any liens (other than statutory liens for real estate taxes not yet due and payable) or special assessments against any of the Property, nor, to Liberty’s knowledge, do there currently exist any facts or circumstances that would allow any governmental authority the right to file or impose such liens or assessments.

               (iv) Schedule of Leases; Rent Roll; Tenant Leases. To Liberty’s knowledge, the Schedule of Lease Documents (the “Schedule of Leases”) provided to NYSCRF pursuant to Section 3.1 hereof is a complete and correct list of all Tenant Leases and amendments thereto in effect as of the date of this Agreement. To Liberty’s knowledge, the rent roll provided to NYSCRF pursuant to Section 3.1 hereof (the “Rent Roll”) sets forth with respect to each of the Tenant Leases in effect on the date hereof (i) the square footage of the space covered thereby, (ii) the expiration date of the term thereof, (iii) the rents and other charges payable thereunder, (iv) the amount of the security deposit thereunder, if any, and (v) any brokerage or leasing fees due and payable thereunder. To Liberty’s knowledge, no Tenant Lease has been modified, altered or amended in any respect except as set forth in the Schedule of

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Leases. To Liberty’s knowledge, there are no leases, tenancies or other rights of occupancy or use for any portion of the Property other than pursuant to Tenant Leases, copies of which have been delivered to NYSCRF.

               (v) Encumbrances on Tenant Leases. To Liberty’s knowledge, subject to the Assumed Financing, none of the Tenant Leases and none of the rents or other amounts payable thereunder has been assigned, pledged or encumbered by Liberty, except for any assignment, pledge or encumbrance that Liberty will cause to be terminated or released at or prior to Closing.

               (vi) Brokerage or Leasing Commissions. Except as disclosed on the Rent Roll, to Liberty’s knowledge, no brokerage or leasing commissions or other compensations are due or payable by Liberty to any person, firm, corporation, partnership, limited liability company or other entity (each a “Person”) with respect to or on account of the current term of any of the Tenant Leases. Except as disclosed in the Rent Roll or set forth in the Tenant Leases, to Liberty’s knowledge, no brokerage or leasing commissions or other compensations are due or payable by the landlord on any extension or expansion of any Tenant Lease.

               (vii) Obligations to Tenants under Tenant Leases. Except as set forth on Schedule 4.1(b)(vii) attached hereto, with respect to tenants in occupancy under Tenant Leases as of the Closing Date, to Liberty’s knowledge, there are no unperformed obligations to provide any tenant under any Tenant Lease with any painting, repair, alteration, carpeting, appliance or any other equipment or work of any kind, under any Tenant Lease or under any other oral or written agreement whatsoever that would excuse such tenant from accepting its Premises under the terms of its lease, except for obligations (i) that will be performed and paid for by Liberty before the Closing or (ii) to complete any portion of the Premises covered by the Tenant Lease not yet occupied by the tenant thereunder and not required to be completed under the terms of the Tenant Lease as of the Closing Date or pursuant to renewal rights under Tenant Leases.

               (viii) Enforceability of Tenant Leases. To Liberty’s knowledge, each of the Tenant Leases is valid and subsisting and in full force and effect in accordance with its terms, provisions and conditions and constitutes the legal, valid, binding and enforceable obligation of the tenant thereunder, subject to laws applicable generally to creditor’s rights. As of the date of this Agreement, neither Liberty nor, to the knowledge of Liberty, the tenant is in material default thereunder. To Liberty’s knowledge, as of the date of this Agreement, (i) each tenant under a Tenant Lease scheduled to be in possession as of the date hereof has accepted the premises covered by its Tenant Lease and is in possession of such premises in accordance with its Tenant Lease, and (ii) all initial installation work, if any, required of Liberty in order for the tenant to accept the premises then in actual occupancy by a tenant under the terms of its lease has been fully performed, paid for and accepted by each such tenant. To Liberty’s knowledge, no tenant under a Tenant Lease that has been signed as of the date hereof has any pending litigation, offsets or counterclaims against Liberty that, if successfully asserted, would reduce the rent payable thereunder or result in the cancellation or termination thereof. No tenant has given any written notice to Liberty of such tenant’s intention of instituting litigation with respect to any Tenant Lease or terminating its tenancy. Each of the representations and warranties set forth in this Section 4.1(viii) is subject to the matters disclosed on Schedule 4.1(viii) attached hereto.

               (ix) Agreements to Acquire or Possess the Property. Except as set forth in the Tenant Leases, to Liberty’s knowledge, no tenant or other occupant under the Tenant Leases and no other Person (other than, pursuant to this Agreement, the Company) has any right or option to acquire any fee or leasehold ownership interest in the Property, or any part thereof, from Liberty or any Entity. Neither Liberty nor, to Liberty’s knowledge, any Entity has entered

6

into any agreement with any Person granting the right to possess the Property, other than (i) tenants in possession pursuant to the Tenant Leases described in the Schedule of Leases, (ii) tenants under Tenant Leases entered into by the Entities after the date hereof in accordance with Section 3.3; or (iii) matters of public record.

               (x) Defects; Violations; Condemnation Proceedings. With respect to the Property, neither Liberty nor, to Liberty’s knowledge, any Entity has received any written notice from any insurance company, governmental agency or any other Person of (i) any condition, defect, or inadequacy affecting the Property that, if not corrected, would result in termination of insurance coverage or materially increase its cost, (ii) any pending or threatened condemnation proceedings, or (iii) any proceedings that could or would reasonably be likely to cause the change or other material modification of the zoning classification or other legal requirements, applicable to the Property or any part thereof which would materially and adversely affect the Property. To Liberty’s knowledge, there does not exist any court order, nor does there exist any restriction or restrictive covenant (save and except matters of public record and all laws, statutes, ordinances and regulations of applicable governmental authorities) or other private or public limitation, that is reasonably likely to materially and adversely affect the use of the Property as presently being operated.

               (xi) Mechanic’s Liens. At Closing, except for payments currently due or to become due under existing contracts for tenant improvements under the Tenant Leases in force and effect as of the date hereof and except for any payments currently due or to become due under the construction contracts for the development of the Parcel located at 1129 20th Street, NW, Washington, D.C., to Liberty’s knowledge, there will not be any unpaid charges, debts, liabilities, claims or obligations of Liberty or any Entity arising from the construction, occupancy, ownership, use or operation of the Property which could give rise to any mechanics’ or materialmen’s or other statutory liens against any of the Property that will not be paid by Liberty or an Entity at the Closing (or bonded over in a manner reasonably acceptable to NYSCRF and the Title Company and in accordance with the provisions of any applicable statutes or regulations or affirmatively insured against by the Title Company to NYSCRF’s reasonable satisfaction or for which Liberty may be willing to escrow funds, to the reasonable satisfaction of NYSCRF).

               (xii) Governmental Requirements. Neither Liberty nor, to Liberty’s knowledge, any Entity has received a written notice from any Governmental Authority asserting a violation of any uncured restrictive covenants, deed restrictions or zoning requirements or other applicable Governmental Requirements (as defined in Section 13.1(a) hereof) affecting the Property.

               (xiii) Streets and Highways. Neither Liberty nor, to Liberty’s knowledge, any Entity has received a written notice of any existing plans to widen, modify or realign any street adjoining the Property.

               (xiv) Unfulfilled Binding Commitments. No commitments have been made by Liberty nor, to Liberty’s knowledge, any Entity to any Governmental Authority, utility company, school board, church or other religious body, or any homeowners or homeowners’ association, or any other organization, group or individual, relating to the Property (other than with respect to any declaration in place at the Property) that would impose an obligation upon the Company or its successors or assigns to make any contribution or dedications of money or land or to construct, install or maintain any improvements of a public or private nature on or off the Property, except for obligations due under the Tenant Leases and all recorded instruments.

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               (xv) Service Contracts, Tenant Leases, etc. To Liberty’s knowledge, there are no other contracts (including collective bargaining agreements), other than the Service Contracts, the Tenant Leases and matters of public record, that materially and adversely affect the Property or the operation thereof except as provided to NYSCRF pursuant to Section 3.1.

          (c) Liberty.

               (i) Existence; Authority. Liberty has been formed as a limited partnership under the laws of the Commonwealth of Pennsylvania and is in good standing under the laws of such commonwealth. The execution and delivery of, and Liberty’s performance under, this Agreement are within Liberty’s powers and have been duly authorized by all requisite action. The Persons executing this Agreement on behalf of Liberty have the authority to do so. This Agreement constitutes the legal, valid and binding obligation of Liberty and is enforceable against Liberty in accordance with its terms, subject to laws applicable generally to creditor’s rights. Except to the extent lender approval for the assumption by the Company of the Assumed Financing is not obtained prior to Closing, performance of this Agreement will not result in any breach of, or constitute any default under, or result in the imposition of any lien or encumbrance upon the Property under, any agreement or other instrument to which Liberty is a party or by which Liberty or the Property is bound. Except as disclosed on Exhibit H hereto, no consent or approval of any Person, Entity or of any Governmental Authority is required with respect to the execution and delivery of this Agreement by Liberty or the consummation by Liberty of the transactions contemplated hereby or the performance by Liberty of its obligations hereunder.

               (ii) Foreign Person. Liberty is not a “foreign person” within the meaning of Sections 1445 and 7701 of the Code.

     4.2 Delivery of Documents. To Liberty’s knowledge, all of the Leases, Service Contracts and financial information pertaining to the Property (collectively, the “Documents”) submitted by or on behalf of Liberty to NYSCRF hereunder that Liberty or Liberty’s employees or agents prepared shall be true, correct and complete in all material respects. Liberty has no knowledge that any of the Documents submitted by or on behalf of Liberty to NYSCRF hereunder which were prepared by third parties contain material inaccuracies or omissions. The copies of Documents submitted shall be complete and correct copies of the documents in Liberty’s possession.

     4.3 Knowledge Defined. Whenever a representation or warranty is made herein as being “to the knowledge of” or “known” to Liberty, or phrases of similar import, such phrase shall mean facts actually known to the following officers of Liberty on the date hereof without any independent investigation: Michael Hagan, Chief Investment Officer, and Richard Casey, Director of Due Diligence.

     4.4 Liberty’s Covenants. Liberty hereby covenants and agrees with NYSCRF that, after the date of this Agreement and until the earlier of the termination of this Agreement or the Closing:

          (a) No Assignment or Transfer. Liberty shall not convey the Contributed Interests in the Contributed Property except to NYSCRF or its permitted assigns, and Liberty shall not make any material amendments to the Operating Agreements nor cause any alterations to any portion of the Property except as otherwise expressly permitted under this Agreement.

          (b) Operation and Management of the Property. From Liberty’s acquisition of the Contributed Interests and until the Closing, Liberty shall cause the Property to be operated and maintained in at least the same quality and manner as Republic operated and maintained the

8

Property prior to the date hereof. Without the prior written consent of NYSCRF, Liberty will not initiate or permit any zoning reclassification of the Property or seek any variance under existing zoning ordinances applicable to the Property to use or permit the use of the Property in such a manner that would result in such use becoming a nonconforming use under applicable zoning ordinances or other Governmental Requirements. Liberty will not impose any restrictive covenants or encumbrances (other than Tenant Leases) on the Property or execute or file any subdivision plat affecting the Property without the prior written consent of NYSCRF.

          (c) Insurance. Liberty hereby agrees that from Liberty’s acquisition of the Contributed Interests and until the Closing, it will maintain, or cause to be maintained, in full force and effect full replacement value and/or all risk fire and extended coverage insurance upon the Property and public liability insurance with respect to damage or injury to persons or property occurring on the Property in such amounts as is maintained by Republic on the date of this Agreement (such amounts to be increased, if necessary, upon further construction).

          (d) No Solicitation. Liberty, on behalf of itself, its agents, contractors and representatives, agrees that from the date hereof until the earlier of the Closing or the date that this Agreement is terminated, it will not accept any offers to purchase or otherwise acquire the Entities or the Property from any party other than the Company or NYSCRF and will not market the Entities or the Property to any other parties.

          (e) Condemnation; Injury; Damages. Promptly upon obtaining knowledge of the institution of any proceedings for the condemnation of the Property, or any portion thereof, or any other proceedings arising out of injury or damage to the Property, or any portion thereof, Liberty will notify NYSCRF of the pendency of such proceedings.

          (f) Governmental Requirements; Litigation. Liberty will advise NYSCRF promptly of any litigation, arbitration or administrative hearing concerning or affecting the Property or the ownership and/or operation thereof of which Liberty has actual knowledge or written notice.

          (g) Liens. Except for the liens of the Assumed Financing and liens that Liberty shall be obligated to release at or prior to Closing, Liberty shall not grant, consent or permit the filing of any lien or encumbrance against the Property or any portion thereof subsequent to the date hereof. Liberty will not, without the prior written consent of NYSCRF, sell, lease, exchange, assign, transfer, convey or otherwise dispose of all or any part of the Property or any interest therein, or permit any of the foregoing, except pursuant to Tenant Leases and other leases approved in writing in advance by NYSCRF pursuant to the terms hereof.

          (h) Existence. Liberty will continuously maintain Liberty’s existence as a limited partnership. From and after Liberty’s acquisition of the Contributed Interests and until the Closing, Liberty will continuously maintain the Entities’ existence as limited liability companies or limited partnerships, as applicable.

          (i) Books and Records. From and after Liberty’s acquisition of the Contributed Interests and until the Closing, Liberty will keep or cause to be kept accurate books and records of the operation of the Property in substantially the same manner as Liberty or its predecessors in interest have maintained such books and records prior to the date of this Agreement, and in which full, true and correct entries shall be made as soon as reasonably practical as to all operations on the Property, and all such books and records shall at all times during reasonable business hours be subject to inspection by NYSCRF and its duly authorized representatives, subject to Republic’s approval.

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          (j) Tenant Improvements; Leasing Commissions. After Closing, Liberty shall, at Liberty’s sole cost and expense, cause the completion of the tenant improvement work listed on Schedule 4.4(j) in accordance with terms of the applicable lease or other agreement giving rise to the obligation. Furthermore, Liberty shall be solely responsible for the payment of those leasing commissions listed on Schedule 4.4(j). This Section 4.4(j) shall survive Closing.

          (k) Severance Payments. Liberty shall, at Liberty’s sole cost and expense, pay any and all severance payments to any employee or former employee of RPLP, or any Entity, triggered by the transactions contemplated by this Agreement. This Section 4.4(k) shall survive Closing.

          (l) Existing Litigation. Liberty agrees to indemnify, defend and hold NYSCRF and the Company harmless from and against any claim, loss, cost or damage arising by reason of the Existing Litigation. This Section 4.4(l) shall survive Closing.

     4.5 Indemnity For Breach by Liberty. Subject to the other provisions hereof (including the provisions of Section 11.1), if Closing occurs, Liberty shall indemnify NYSCRF and the Company and their successors and assigns, against and shall defend and hold NYSCRF and the Company and their successors and assigns, harmless from, all costs, expenses, and actual damages, including reasonable attorneys’ fees, that NYSCRF, the Company and/or NYSCRF’s or the Company’s successors or assigns actually incur because of any breach of any of the representations, warranties or covenants of Liberty herein contained incurred prior to [The confidential material contained herein has been omitted and has been separately filed with the Commission.] after the Closing. Notwithstanding the foregoing, if NYSCRF has actual knowledge of any such breach prior to Closing and nonetheless proceeds with the Closing, then in such event any such breach shall be deemed waived by NYSCRF. NYSCRF and the Company hereby specifically waive any and all rights which they may have to exemplary, punitive or consequential damages as a result of Liberty’s default under this Agreement.

     4.6 NYSCRF’s Representations and Warranties. NYSCRF represents and warrants to Liberty as follows (which representations and warranties shall be true and correct as of the date hereof and as of the Closing Date):

          (a) Authority. NYSCRF has duly and validly authorized and executed this Agreement, and it has full right, title, power and authority to enter into this Agreement and to carry out all of its terms;

          (b) No Violation; Consent. The execution and delivery by NYSCRF of, consummation of transactions provided for in, and compliance by NYSCRF with all of the provisions of this Agreement will not violate the organizational documents of NYSCRF and do not require any approval or consent of any trustee or holders of any of its debt (except for approvals already obtained).

          (c) Sophisticated Investor. NYSCRF is a sophisticated investor experienced in commercial real estate investments. NYSCRF has sufficient experience of and knowledge about the operations of multi-tenant commercial properties to be able to exercise its approval powers in this Agreement and under the Partnership Agreement in a commercially reasonable manner and without delay.

          (d) Indemnity For Breach by NYSCRF. Subject to the other provisions hereof (including the provisions of Section 11.2), if Closing occurs NYSCRF shall indemnify Liberty and the Company and their successors and assigns, against and shall defend and hold Liberty and the Company and their successors and assigns, harmless from, all costs, expenses, and actual damages, including reasonable attorneys’ fees, that Liberty, the Company and/or Liberty’s or the Company’s successors or assigns actually incur because of any breach of any of

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the representations, warranties or covenants of NYSCRF herein contained incurred prior to one (1) year after the Closing. Notwithstanding the foregoing, if Liberty has actual knowledge of any such breach prior to Closing and nonetheless proceeds with the Closing, then in such event any such breach shall be deemed waived by Liberty. Liberty and the Company hereby specifically waive any and all rights that they may have to exemplary, punitive or consequential damages as a result of NYSCRF’s default under this Agreement.

     5. CONDITIONS OF CLOSING

     5.1 Closing Conditions For NYSCRF’s Benefit. The obligations of NYSCRF to consummate the transaction contemplated hereby are subject to the following conditions, any of which, if not fulfilled by the Closing or as otherwise provided herein, shall entitle NYSCRF (at its option) to terminate this Agreement as provided below:

          (a) Merger. All conditions to the merger of RPLP with and into Liberty (the “Merger”), as well as the merger of Republic Property Trust with and into Liberty Acquisition LLC (the REIT Merger”), pursuant to that certain Agreement of Plan and Merger, dated as of July 23, 2007 (the “Merger Agreement”), shall have been satisfied in accordance with the terms of the Merger Agreement.

          (b) Absence of Judicial Action. The transactions contemplated under this Agreement to be effected on the Closing Date shall not have been restrained or prohibited by any injunction or order or judgment rendered by any court or other governmental agency of competent jurisdiction and no proceeding shall have been instituted and be pending in which any creditor of Liberty or any other Person seeks to restrain such transactions or otherwise to attach any of the Property, provided that any such proceeding or action contemplated by this Section 5.1(a) shall not be deemed to include any proceeding or action brought by, through or under NYSCRF.

          (c) Representations and Warranties. All representations and warranties made by Liberty herein shall at the time of Closing be true and correct in all material respects.

          (d) Absence of Litigation. On the Closing Date, Liberty shall have received no written notice of any litigation pending or threatened against the Entities or the Property that, if resolved adversely to the Entities or the Property, would have a material adverse effect on the Entities or the Property, except for litigation related to the matters disclosed on Schedule 4.1(b)(ii).

          (e) Covenants of Liberty. On the Closing Date, all of the covenants and agreements herein on the part of Liberty to be complied with or performed on or before the Closing Date shall have been fully complied with and performed in all material respects, and there shall exist no material default or material breach by Liberty under this Agreement.

          (f) Insolvency. On the Closing Date, Liberty and the Entities shall not be insolvent (i.e., unable to pay its debts as they become due), shall not have been held or alleged to have made a transfer in fraud of creditors and shall not have made a general assignment for the benefit of creditors.

          (g) Receiver. On the Closing Date, neither a receiver nor a trustee nor a custodian shall have been appointed for, or shall have taken possession of, all or substantially all of the assets of Liberty or any Entity or any of the Property, either in a proceeding brought by Liberty or in a proceeding brought against Liberty or an Entity.

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          (h) Bankruptcy. On the Closing Date, neither Liberty nor any Entity shall have filed a petition for relief under the Federal Bankruptcy Code or any other present or future federal or state insolvency, bankruptcy or similar law (all of the foregoing hereinafter collectively called “Applicable Bankruptcy Law”) nor shall an involuntary petition for relief have been filed against Liberty or any Entity under any Applicable Bankruptcy Law and not been dismissed, nor shall any order for relief naming Liberty or an Entity have been entered under any Applicable Bankruptcy Law, nor shall any composition, rearrangement, extension, reorganization or other relief of debtors now or hereafter existing have been requested or consented to by Liberty or any Entity.

          (i) Execution. On the Closing Date, neither the Property nor any part thereof or any interest therein shall have been taken by execution or other process of law in any action against Liberty or an Entity.

          (j) Completion of the Partnership Agreement. All Exhibits not attached to the form of the Partnership Agreement attached hereto as Exhibit F shall have been completed and such Exhibits reasonably approved by Liberty and NYSCRF.

          (k) Owner’s Policies. On the Closing Date, the Title Company shall be unconditionally committed to deliver the Owner’s Policy to each Entity (or its subsidiary) that directly owns Property, in accordance with Section 6.2.

If any one or more of the above conditions is not satisfied by the Closing Date, NYSCRF may at its option either (i) waive such remaining conditions and proceed to Closing; or (ii) if such failure is not satisfied prior to closing on the Merger, NYSCRF may terminate this Agreement by written notice thereof to Liberty and, except for such obligations and indemnities that expressly survive the termination of this Agreement, the parties shall have no further right or obligation hereunder; provided, however, if such failure to satisfy any condition is a result of a default or breach by Liberty under this Agreement, NYSCRF shall also have the rights provided under Section 11.1(b) hereof.

     5.2 Conditions Precedent for Liberty’s Benefit. The obligations of Liberty to consummate the transactions contemplated hereby are subject to the following conditions which, if not fulfilled by the Closing or as otherwise provided herein, shall entitle Liberty, at its option, to terminate the Agreement:

          (a) Merger. All conditions to the Merger and the REIT Merger shall have been satisfied in accordance with the terms of the Merger Agreement.

          (b) Covenants of NYSCRF. All of the covenants and agreements herein on the part of NYSCRF to be complied with or performed on or before the Closing Date shall have been fully complied with and performed.

          (c) Representations and Warranties. All representations and warranties made by NYSCRF herein shall have been and remain true and correct in all material respects.

          (d) Completion of the Partnership Agreement. All exhibits not attached to the form of the Partnership Agreement attached hereto as Exhibit F shall be completed and such Exhibits reasonably approved by Liberty and NYSCRF.

          (e) Absence of Judicial Action. The transactions contemplated under this Agreement to be effected on the Closing Date shall not have been restrained or prohibited by any injunction or order or judgment rendered by any court or other governmental agency of competent jurisdiction.

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          (f) Owner’s Policies. On the Closing Date, the Title Company shall be unconditionally committed to deliver the Owner’s Policy to each Entity (or its subsidiary) that directly owns Property, in accordance with Section 6.2.

     6. CLOSING

     6.1 Closing. The closing of the transactions contemplated herein shall be held on the date of the Merger (the “Closing Date” or the “Closing”), unless otherwise specified herein. The Closing shall be held at the Philadelphia, Pennsylvania offices of Wolf, Block, Schorr and Solis-Cohen LLP, or at such other location as may be acceptable to Liberty and NYSCRF, or at the election of either party, by delivery of documents in escrow to the Title Company together with escrow instructions that otherwise comport with the terms of this Agreement.

          (a) Liberty Closing Obligations. At the Closing, Liberty shall deliver or cause to be delivered executed counterparts of the Partnership Agreement and the Management Agreement.

          (b) Liberty Closing Documents. At or before Closing (as the case may be pursuant to this Agreement), Liberty shall deliver or cause to be delivered for the benefit of the Company the items specified herein (with copies to NYSCRF) and the following documents and instruments, each duly executed and, where necessary, acknowledged:

               (i) a promissory note for the Merger Loan;

               (ii) an assignment and assumption agreement (the “Liberty Loan Assignment”) in the form of Exhibit K attached hereto, whereby Liberty assigns, and the Company assumes, all of the rights and obligations of the borrower under the Liberty Loan Documents;

               (iii) one or more assignment of interests (the “Assignments”) in the form of Exhibit E attached hereto, dated as of the Closing Date, conveying the Contributed Interests to the Company;

               (iv) the Purchase Money Loan Documents, and an assignment to the Company of the lender’s rights thereunder;

               (v) copies of the assignments of the Purchased Interests to the Company;

               (vi) if necessary, tenant notification agreements, dated the Closing Date, containing Liberty’s authorization to the tenants of the Property for payment of rental directly to the Company or the Company’s managing agent, in form acceptable to NYSCRF and Liberty (the “Tenant Notices”);

               (vii) a Schedule of Leases and Rent Roll for the Property that is current as of August 31, 2007, containing all the matters described in Section 4.1(b)(iv), certified by Liberty to Liberty’s knowledge, to be true, complete and correct in all material respects as of the Closing Date and showing no changes in the Schedule of Leases and Rent Roll, except for additional Tenant Leases, terminations of Tenant Leases that have expired by their terms, terminations of Tenant Leases for reasons other than the expiration of their terms not in excess of, in the aggregate, [The confidential material contained herein has been omitted and has been separately filed with the Commission.] square feet of gross leaseable area, and other changes approved by NYSCRF in writing or otherwise permitted pursuant to the terms hereof, or that do not constitute a material adverse effect;

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               (viii) evidence reasonably acceptable to the Title Company authorizing the consummation by Liberty of the transactions contemplated hereby and the execution and delivery of the closing documents on behalf of Liberty;

               (ix) such documents, if any, as may be required to assign or withdraw Liberty’s right to use the trade names, if any, of the Property;

               (x) an executed certificate with respect to Liberty’s non-foreign status sufficient to comply with the requirements of Section 1445 of the Code, commonly known as the Foreign Investment in Real Property Tax Act of 1980, and regulations applicable thereto;

               (xi) an executed copy of Internal Revenue Service Form 1099 as required by the Tax Reform Act of 1986, and all regulations applicable thereto;

               (xii) copies of executed Tenant Leases, to the extent in Liberty’s control and not previously delivered to NYSCRF;

               (xiii) executed counterparts of the Partnership Agreement; and

               (xiv) executed counterparts of the Management Agreement.

          (c) NYSCRF Closing Obligations. At or before the Closing (as the case may be pursuant to this Agreement), NYSCRF, or its permitted assignee, shall do the following:

               (i) on the day before the Closing, deposit with LaSalle Bank National Association (the Transfer Agent for the Merger) the Contribution Amount, adjusted as provided herein, by wire transfer in immediately available funds; and

               (ii) on the day of Closing, deliver executed counterparts of the Partnership Agreement.

          (d) Company Obligations. At or prior to Closing (as the case may be pursuant to this Agreement), NYSCRF and Liberty shall cause the Company to assume all obligations of Liberty under the Operating Agreements, and the Assumed Financing pursuant to the forms of documents referenced in Section 6.1(b). In addition, at Closing, NYSCRF and Liberty shall cause the Company to do the following:

               (i) deliver evidence acceptable to the Title Company and reasonably acceptable to Liberty, authorizing the consummation by the Company of the transactions contemplated hereby and the execution and delivery of the closing documents on behalf of the Company;

               (ii) execute and deliver the agreements of sale contemplated by the Recitals, if any;

               (iii) deliver the Purchase Money Loan Documents to RPLP in accordance with the Recitals, if any;

               (iv) execute and deliver an assignment and assumption agreement sufficient for the Company to acquire the Purchased Interests pursuant to the Recitals, if applicable;

               (v) fund the Merger Loan;

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               (vi) execute and deliver the Liberty Loan Assignment; and

               (vii) deliver executed counterparts of the Management Agreement.

To the extent the consent of NYSCRF is required under the Partnership Agreement or otherwise in order for the Company to perform any of the foregoing actions or deliver any of any of the above items, NYSCRF hereby consents.

          (e) Further Assurances. At the Closing, the Company, Liberty and NYSCRF shall execute and deliver, or cause to be executed or delivered, such other instruments and documents as may be necessary in order to complete the Closing of the transactions contemplated hereunder, the form and content of which shall be reasonably acceptable to Liberty and NYSCRF.

          (f) Delivery of Closing Documents. The Company, Liberty and NYSCRF acknowledge and agree to use commercially reasonable efforts to execute and deliver to the Title Company to hold in escrow all documents required to be delivered at the Closing pursuant to this Section 6.1 at least two (2) business days prior to the Closing Date.

     6.2 Title Insurance. At the Closing, Commonwealth Land Title Insurance Company (the “Title Company”) shall furnish each Entity (or its subsidiary that is the direct owner of Property) with an owner’s policy of title insurance (an “Owner’s Policy”) that substantially conforms to the marked-up title commitments previously delivered by Liberty to NYSCRF. The Owner’s Policies to be issued at Closing shall contain (to the extent available in the applicable jurisdiction): (i) an affirmative endorsement insuring the Company that there are no violations of any restrictive covenants affecting the Property, (ii) an access endorsement insuring vehicular and pedestrian access to all contiguous streets from all present points of entry; (iii) a contiguity endorsement, if applicable; (iv) a survey endorsement; (v) a location endorsement; (vi) an endorsement deleting the creditor’s rights exception; (vii) a non-imputation endorsement; and (viii) a zoning endorsement (completed structures, including parking and loading dock). The Title Company has executed the joinder attached to this Agreement to evidence its agreement to, among other things, the provisions of this Section 6.2.

     6.3 Delivery of Documents, Possession, Keys and Other Items. At the Closing, Liberty shall (i) provide the Company with the originals of all available documents within Liberty’s possession or control, copies of which were provided to NYSCRF pursuant to Section 3.1 hereof, and (ii) deliver or cause to be delivered to the Company all books and records in Liberty’s possession pertaining to the Entities. All such documents which are located at the Property may be delivered with the Property. Any other such documents shall be made available to the Company by Liberty at a mutually convenient time and place, and Liberty may retain additional copies of such items as it deems necessary or convenient. NYSCRF acknowledges that the Company and Liberty have the same principal offices and that no physical transfer of such documents will be required.

     6.4 Closing Costs; Transfer Taxes.

          (a) [The confidential material contained herein has been omitted and has been separately filed with the Commission.]

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          (c) Liberty and NYSCRF each shall pay their respective legal fees incurred in negotiating this Agreement, the Partnership Agreement and related joint venture documents.

          (d) In the event of any post-Closing increase or decrease in the amount of transfer tax payable hereunder, the parties hereto shall pay or be reimbursed for such increase or decrease, as the case may be, in accordance with, and in proportion to, each party’s obligation as set forth in this Section 6.4. This Section 6.4(d) shall survive Closing.

     7. PRORATIONS

     7.1 Initial Proration. Within [The confidential material contained herein has been omitted and has been separately filed with the Commission.] days after the Closing Date, the parties shall prorate the following items as of the Closing Date:

          (a) Taxes. All real estate taxes with respect to the Property shall be prorated between Liberty and the Company as of the Closing Date.

          (b) Rents. Rent shall be prorated as of the Closing Date, except that no proration shall be made for rents delinquent as of the Closing Date (hereinafter called the “Delinquent Rents”). The Company shall have no liability to Liberty for the Delinquent Rents and shall have no obligation to collect same, provided, however, amounts collected by the Company or the Entities from tenants owing Delinquent Rents shall be applied first to rents owed by such tenant accruing from and after the Closing Date and then to Delinquent Rents. Any such amounts applicable to Delinquent Rents received by the Company or the Entities shall be forwarded to Liberty within fifteen (15) days of receipt thereof. Liberty reserves the right to pursue legal remedies against tenants owing Delinquent Rents so long as pursuit of its legal remedies does not cause the tenant to be evicted.

          (c) Operating Costs. All operating expenses, including utilities (to the extent not paid directly by tenants), maintenance and other operating costs and expenses incurred by the Entities in connection with the ownership, operation, maintenance and management of the Property shall be prorated between Liberty and the Company as of the Closing.

          (d) Insurance Premiums. Insurance premiums shall be prorated as of the Closing Date.

          (e) Other Income and Expenses. All other income from, and expenses of, the Property, including but not limited to public utility charges, maintenance charges and service

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charges, shall be prorated as of the Closing Date and the Company shall assume such expenses for periods subsequent to Closing.

          (f) Federal, State and Local Taxes. To the maximum extent permissible, for Federal, State and local tax purposes the parties will cause the Entities and their subsidiaries to treat the Closing Date as the beginning of a fiscal period. Liberty will file all returns and pay all taxes owing for periods through the day preceding the Closing Date and the Company will file all returns and pay all taxes owing for periods beginning with the Closing Date. If and to the extent that such filing of separate returns is not permitted by any taxing authority, and as to any tax that applies to a period both before and after the Closing Date, the parties will cooperate in the furnishing of information necessary to the preparation and filing of returns, and will pay their respective shares of tax liability in proportion to their respective shares of the thing taxed (for example, gross receipts or net income). The obligations of the parties hereunder shall survive Closing until each such tax return has been filed, all such taxes owing have been paid and such returns and payments are no longer subject to contest by the taxing authority. Notwithstanding the foregoing, for tax purposes, closing shall be deemed to occur at 11:59 p.m. (local Washington, D.C. time) on the day preceding the Closing Date.

          (g) Assumed Financing. Interest, credits, costs and expenses (other than the costs and expenses described in Section 6.4(b)(iii), which shall be the sole obligation of the Company) related to the Assumed Financing will be adjusted and apportioned between Liberty and the Company in accordance with the following: (i) prepaid interest will be paid to Liberty by the Company and accrued, but unpaid interest will be paid by Liberty with both to be apportioned as of the day preceding the Closing Date; and (ii) Liberty will be entitled to receive the amounts (including accrued interest) of any escrow and other sums on deposit with a lender under the Assumed Financing (including any escrow reserves) when disbursed by the holder of such Assumed Financing.

     7.2 Adjustments; Reproration. After receipt of final financial statements for the Entities for the current year or applicable fiscal period, Liberty shall prepare and present to NYSCRF a calculation of the reproration of the profits and losses of the Entities to be passed through to the Company. The parties shall make the appropriate adjusting payment between them within 30 days after presentment to NYSCRF of Liberty’s calculation. This provision shall survive the Closing.

     7.3 Indemnity.

          (a) Except for items to be prorated and reprorated by Liberty and NYSCRF pursuant to this Article 7, Liberty hereby assumes full responsibility for any and all demands, claims, legal or administrative proceedings, losses, liabilities, damages, penalties, fines, liens, judgments, costs or expenses whatsoever (including, without limitation, attorneys’ fees and costs), whether direct or indirect, known or unknown, foreseen or unforeseen, that may arise on account of or in any way be connected with the ownership of the Interests, Entities or the Property first arising or accruing prior to the Closing Date, including, without limitation, the Existing Litigation. Liberty also agrees to indemnify, defend and hold the Company and NYSCRF harmless from any claims, liabilities or costs (including reasonable attorneys’ fees) arising from Liberty’s failure to perform said obligations.

          (b) Except for items to be prorated and reprorated by Liberty and NYSCRF pursuant to this Article 7, the Company hereby assumes full responsibility for any and all demands, claims, legal or administrative proceedings, losses, liabilities, damages, penalties, fines, liens, judgments, costs or expenses whatsoever (including, without limitation, attorneys’ fees and costs), whether direct or indirect, known or unknown, foreseen or unforeseen (“Losses

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and Liabilities”), which may arise on account of or in any way be connected with the ownership of the Property first arising or accruing on or after to the Closing Date, excluding, however, any Liberty Losses and Liabilities (hereinafter defined). The Company also agrees to indemnify, defend and hold Liberty harmless from any claims, liabilities or costs (including reasonable attorneys’ fees) arising from the Company’s failure to perform said obligations, provided the same do not arise on account of Liberty Losses and Liabilities. As used herein, “Liberty Losses and Liabilities” are any Losses and Liabilities which may arise on account of or in any way be connected with any action by Liberty or the LLC (a) that was not taken in the reasonable belief that it was within their scope of authority under the Partnership Agreement, (b) constituting fraud, bad faith, negligence or willful misconduct, or a breach of the standards set forth in Section 6.02(d) of the Partnership Agreement, or (c) in violation of securities laws or criminal laws.

          (c) The provisions of this Section 7.3 shall survive the Closing.

     8. SURVIVAL

     8.1 Survival. Except as otherwise expressly provided herein, all warranties representations, covenants, obligations and agreements contained in this Agreement shall survive the execution and delivery of this Agreement and shall survive the Closing for a period of one (1) year and any right of action for the breach of any representation, warranty or covenant contained herein shall not merge with the Assignment but shall survive the Closing for such one (1) year period and may be enforced by the Company. In addition to all other remedies that NYSCRF and/or the Company may have at law or in equity, the Company may offset any final, non-appealable judgment it obtains against Liberty against any distributions due to Liberty from the Company. Notwithstanding anything contained in this Agreement to the contrary, the representations and warranties contained in Section 4.1(a) shall survive the Closing.

     9. COMMISSIONS

     9.1 Liberty’s Indemnity. LIBERTY SHALL INDEMNIFY NYSCRF AND THE COMPANY AND HOLD AND DEFEND NYSCRF AND THE COMPANY HARMLESS FROM AND AGAINST ANY AND ALL CLAIMS, LOSSES, LIABILITIES, DAMAGES, DEMANDS, COSTS AND EXPENSES (INCLUDING ACTUAL, REASONABLE ATTORNEYS’ FEES AT OR BEFORE THE TRIAL LEVEL AND ANY APPELLATE PROCEEDINGS) ARISING OUT OF ANY CLAIM MADE BY ANY REALTOR, BROKER, FINDER, OR ANY OTHER INTERMEDIARY WHO CLAIMS TO HAVE BEEN ENGAGED, CONTRACTED OR UTILIZED BY LIBERTY IN CONNECTION WITH THE TRANSACTIONS THAT ARE THE SUBJECT MATTER OF THIS AGREEMENT. THIS INDEMNIFICATION SHALL SURVIVE THE CLOSING.

     9.2 NYSCRF’s Indemnity. NYSCRF SHALL INDEMNIFY, HOLD HARMLESS AND DEFEND LIBERTY AND THE COMPANY FROM AND AGAINST ANY AND ALL CLAIMS, LOSSES, LIABILITIES, DAMAGES, DEMANDS, COSTS AND EXPENSES (INCLUDING ACTUAL, REASONABLE ATTORNEYS’ FEES AT OR BEFORE THE TRIAL LEVEL AND ANY APPELLATE PROCEEDINGS) ARISING OUT OF ANY CLAIM MADE BY ANY REALTOR, BROKER, FINDER OR ANY OTHER INTERMEDIARY WHO CLAIMS TO HAVE BEEN ENGAGED, CONTRACTED OR UTILIZED BY NYSCRF IN CONNECTION WITH THE TRANSACTIONS THAT ARE THE SUBJECT MATTER OF

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THIS AGREEMENT, INCLUDING WITHOUT LIMITATION ANY AND ALL FEES PAYABLE TO HEITMAN CAPITAL MANAGEMENT LLC IN CONNECTION WITH THE TRANSACTIONS THAT ARE THE SUBJECT MATTER OF THIS AGREEMENT. THIS INDEMNIFICATION SHALL SURVIVE THE CLOSING.

     10. FURTHER INSTRUMENTS

     Liberty will, whenever reasonably requested by NYSCRF, and NYSCRF will, whenever reasonably requested by Liberty, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, any and all conveyances, assignments and all other instruments and documents as may be reasonably necessary in order to complete the transaction herein provided and to carry out the terms and provisions of this Agreement.

     11. TERMINATION AND REMEDIES

     11.1 Liberty’s Default.

          (a) Subject to the provisions of Section 11.1(b) below, if Liberty has not terminated this Agreement pursuant to any of the provisions hereof authorizing such termination, and if prior to or at the Closing Liberty defaults hereunder or shall have failed to have performed any of the material covenants and/or agreements contained herein that are to be performed by Liberty at or prior to the Closing, or if any warranty or representation made by Liberty herein is not true and correct in all material respects, NYSCRF may, at its option, as its sole and exclusive remedies, either (i) seek specific performance of this Agreement, or (ii) terminate this Agreement.

          (b) Notwithstanding anything in Section 11.1(a) to the contrary, NYSCRF will, prior to the exercise of the remedies contained in Section 11.1(a), give Liberty written notice (“NYSCRF’s Default Notice”) specifying the nature of such default. Until the date that is five (5) days after receipt of NYSCRF’s Default Notice, Liberty may, at its option, elect to cure such default or waive the option to cure the default; provided, however, Liberty’s failure to give NYSCRF written notice of its election within this time period shall be deemed an election by Liberty to waive its right to cure the default. If Liberty waives or is deemed to have waived its right to cure the default, NYSCRF shall thereafter be entitled to exercise the remedies in accordance with the terms of Section 11.1(a). If Liberty elects to cure the default specified in NYSCRF’s Default Notice, Liberty shall commence to cure such default within fifteen (15) days from the date of such election and diligently pursue such cure to completion within forty-five (45) days (“Liberty’s Cure Period”). If Liberty fails to cure such default within Liberty’s Cure Period to NYSCRF’s reasonable satisfaction, NYSCRF may exercise its remedies in accordance with the terms of Section 11.1(a) hereof.

     11.2 NYSCRF’s Default.

          (a) If NYSCRF has not terminated this Agreement pursuant to any of the provisions hereof authorizing such termination and NYSCRF defaults hereunder and fails to perform any of the covenants and/or agreements contained herein which are to be performed by NYSCRF, Liberty shall be entitled to, at its option, as its sole and exclusive remedies either (i) seek specific performance of this Agreement, or (ii) terminate this Agreement.

          (b) Notwithstanding anything in Section 11.2(a) to the contrary, Liberty will, prior to the exercise of the remedies contained in Section 11.2(a), give NYSCRF written notice (“Liberty’s Default Notice”) specifying the nature of such default. Until the date that is five (5)

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days after receipt of Liberty’s Default Notice, NYSCRF may, at its option, elect to cure such default or waive the option to cure the default; provided, however, NYSCRF’s failure to give Liberty written notice of its election within this time period shall be deemed an election by NYSCRF to waive its right to cure the default. If NYSCRF waives or is deemed to have waived its right to cure the default, Liberty shall thereafter be entitled to exercise the remedies in accordance with the terms of Section 11.2(a). If NYSCRF elects to cure the default specified in Liberty’s Default Notice, NYSCRF shall commence to cure such default within fifteen (15) days from the date of such election and shall thereafter diligently pursue such cure to completion within forty-five (45) days (“NYSCRF’s Cure Period”). If NYSCRF is unable to cure such default within NYSCRF’s Cure Period to Liberty’s reasonable satisfaction, Liberty may exercise its remedies in accordance with the terms of Section 11.2(a) hereof.

     11.3 Costs and Expenses; Limitation. In the event of any default or alleged default by either Liberty or NYSCRF hereunder that results in a party seeking to exercise its rights or remedies pursuant to Section 11.1 or Section 11.2 above, the prevailing party under this Agreement shall be able to recover from the non-prevailing party on demand all actual, reasonable and necessary out-of-pocket expenses actually paid or incurred by the prevailing party in connection with the exercise of its remedies hereunder including, without limitation, reasonable attorneys’ fees. In no event shall either party hereto, or any direct or indirect partner, member, shareholder, beneficiary, owner or affiliate thereof, or any officer, director, employee, trustee, or agent of any of the foregoing or any affiliate or controlling person thereof, be liable to any indemnified party in contract, tort or otherwise with respect to any indirect, consequential, punitive or exemplary damages arising from or relating to this Agreement or any closing document.

     11.4 Limitation of NYSCRF Liability. Notwithstanding anything to the contrary contained herein or in any other agreement executed in connection herewith, Liberty and the Company expressly agree that NYSCRF shall not be liable personally or otherwise for any breach or default by NYSCRF under this Agreement or any other agreement executed in connection with this Agreement, except to the extent of, and only to the extent of, the NYSCRF’s Partnership Interest in the Company. Except only for NYSCRF’s Partnership Interest in the Company, no assets of NYSCRF may be liened, encumbered, attached, levied or executed upon to satisfy any liability of or judgment against NYSCRF arising out of this Agreement or any other agreement executed in connection with this Agreement. This Section 11.4 shall survive Closing.

     12. RISK OF LOSS

     If, prior to Closing, the Property or any part thereof shall be condemned or destroyed or materially damaged by fire or other casualty (that is, damage or destruction that NYSCRF reasonably estimates will cost in excess of [The confidential material contained herein has been omitted and has been separately filed with the Commission.] to repair or restore or that materially impedes access to the Property or any material part thereof), NYSCRF shall elect to do one of the following, which election shall be made not later than the later of (i) ten (10) days prior to Closing, or (ii) ten (10) days following the date NYSCRF receives written notice of the condemnation or material damage: (A) terminate this Agreement as to the Contributed Entity that owns the affected Parcel only, whereupon the parties shall negotiate an equitable reduction in the Contribution Amount hereunder or, if the parties do not reach agreement on such a reduction within thirty (30) days after such casualty, NYSCRF shall be entitled to terminate this Agreement in its entirety; or (B) consummate the transaction contemplated by this Agreement without terminating this Agreement as to the affected Parcel notwithstanding such condemnation, destruction or material damage. If NYSCRF elects to consummate the

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transaction contemplated by this Agreement without terminating this Agreement as to the Contributed Entity that owns the affected Parcel, the Company shall be entitled to receive all of the condemnation proceeds or settle the loss under all policies of insurance applicable to the destruction or damage and receive all of the proceeds of insurance applicable thereto, and Liberty shall, at Closing and thereafter, execute and deliver to the Company all required proofs of loss, assignments of claims and other similar items. If there is any other damage or destruction (that is, damage or destruction that NYSCRF reasonably estimates will cost [The confidential material contained herein has been omitted and has been separately filed with the Commission.] or less to repair or restore, or that does not materially impede access to the Property or any material part thereof), Liberty shall either completely repair or cause to be repaired such damage prior to Closing in a manner reasonably satisfactory to NYSCRF or, at NYSCRF’s option, assign all insurance claims pertaining to such damage or destruction to the Company by executing and delivering to the Company at Closing and thereafter all required proofs of loss, assignments of claims and other similar items.

     Notwithstanding anything herein, Liberty shall be entitled to receive and retain, and shall not be required to assign, any insurance proceeds for loss of the rents to have been paid prior to Closing.

     13. PROVISIONS REGARDING HAZARDOUS SUBSTANCES

     13.1 Definitions. Unless the context otherwise specifies or requires, the following terms shall have the respective meanings herein specified:

          (a) The term “Governmental Requirements” shall mean all laws, ordinances, statutes, codes, rules, regulations, orders and decrees of the United States, the state, the county, the city, or any other political subdivision in which the Property is located, and any other political subdivision, agency or instrumentality exercising jurisdiction over Liberty or the Property, including Hazardous Materials Laws.

          (b) The term “Hazardous Materials” shall mean (i) any “hazardous waste” as defined by the Resource Conservation and Recovery Act of 1976 (42 U.S.C. Section 6901 et seq.), as amended from time to time, and regulations promulgated thereunder (“RCRA”); (ii) any “hazardous substance” as defined by the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C. Section 9601 et seq.), as amended from time to time, and regulations promulgated thereunder (“CERCLA”) (including petroleum-based products as described therein); (iii) other petroleum and petroleum-based products; (iv) asbestos in any quantity or form which would subject it to regulation under any applicable Hazardous Materials Law (hereinafter defined); (v) polychlorinated biphenyls; (vi) any substance, the presence of which on the Property is prohibited by any Hazardous Materials Law; (vii) any “extremely hazardous substance” or “hazardous chemical” as those terms are defined in the Emergency Planning and Community Right-To-Know Act (42 U.S.C. Section 11001 et seq.) as amended from time to time, and regulations promulgated thereunder (“EPCRA”); (viii) any “chemical substance” as that term is defined in the Toxic Substances Control Act (15 U.S.C. Section 2601) as amended from time to time, and regulations promulgated thereunder (“TSCA”); (ix) any hazardous substances identified under the law of the state in which the Property is located; and (x) any other substance, including toxic substances, that, by any Hazardous Materials Laws, requires special handling in its collection, storage, treatment, management, recycling or disposal. Hazardous Materials shall not include consumer products, office supplies, and cleaning and maintenance supplies stored and used in the ordinary course of operation of the Property and in compliance with applicable Hazardous Materials Laws.

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          (c) The term “Hazardous Materials Laws” shall mean all Governmental Requirements, including, without limitation, RCRA and CERCLA, relating to the handling, storage, existence of or otherwise regulating any hazardous wastes, hazardous substances, toxic substances, radioactive materials, pollutants, chemicals, contaminants or industrial substances or relating to the removal or remediation of any of the foregoing.

          (d) “Losses” means any and all losses, liabilities, damages (whether actual, consequential, punitive or otherwise denominated), demands, claims, actions, judgments, causes of action, assessments, fines, penalties, costs, and out-of-pocket expenses (including, without limitation, attorneys’ fees and the fees of environmental consultants), of any and every kind or character, foreseeable and unforeseeable, liquidated and contingent, proximate and remote.

          (e) The terms “release,” “disposal,” “storage” and “treatment” shall have the meaning set forth in CERCLA, RCRA, the regulations promulgated thereunder and any other similar Hazardous Materials Laws.

     13.2 Liberty’s Environmental Representations and Warranties. Liberty hereby represents and warrants to NYSCRF that except as set forth on Exhibit I or in those certain Phase I Environmental Site Assessments delivered to NYSCRF by Liberty and listed on Schedule 13.2 attached hereto (collectively, the “Environmental Reports”):

          (a) Liberty has not received any written notice of any civil, criminal or administrative suit, claim, hearing, violation, investigation, proceeding or demand against the Property or against Liberty or the Company with respect to the Property relating in any way to a release or use of Hazardous Materials or compliance with Hazardous Materials Laws.

          (b) Liberty has received no written notice that the Property violates Hazardous Materials Laws.

          (c) To Liberty’s actual knowledge, there are no under ground storage tanks at the Property.

          (d) Liberty has received no written notice asserting that there are Hazardous Materials on, in or under the Property in violation of any Hazardous Materials Laws.

          (e) The Property has never been used by Liberty, or to Liberty’s best knowledge, by any third parties, to generate, treat, store, dispose of or transport Hazardous Materials in quantities that require remediation under, or are otherwise in violation of, any Hazardous Materials Laws.

     13.3 Environmental Covenant. Liberty shall not knowingly conduct or authorize Hazardous Materials Contamination at the Property occurring after the date hereof and on or prior to the Closing Date, and shall promptly notify NYSCRF in writing of any existing or pending investigation or inquiry by any governmental authority in connection with any Hazardous Materials Laws relating to the Property of which Liberty has received written notice or has actual knowledge (as defined in Section 4.3).

     13.4 Environmental Indemnification.

          (a) Liberty hereby agrees to indemnify, defend and hold harmless NYSCRF and the Company from and against any Losses arising out of any material misrepresentation by Liberty in the representations and warranties set forth in Section 13.2 or by any willful breach of the covenants set forth in Section 13.3.

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          (b) Assumption of Defense.

               (i) If a party entitled to indemnification hereunder (the “Indemnified Party”) notifies the party liable for such indemnification (the “Indemnifying Party”) of any claim, demand, action, administrative or legal proceeding, investigation or allegation adverse to the Indemnified Party and as to which the indemnity provided for in Section 13.4(a) applies (a “Potential Claim”), Indemnifying Party shall assume on behalf of Indemnified Party and conduct with due diligence and in good faith the investigation and defense thereof and the response thereto and shall be entitled, at Indemnifying Party’s sole discretion, to settle or otherwise dispose of any such Potential Claim; provided, that Indemnifying Party shall have the right to cure such matter that is the subject of the Potential Claim (subject to the rights of the owner of the Property at the time of such cure to approve the manner of such cure) if such cure will not result in additional liability or material loss of rights to Indemnified Party, and provided further that Indemnified Party have the right to be represented by advisory counsel of its own selection and at its own expense; and provided further, that if any such claim, demand, action, proceeding, investigation or allegation involves both Indemnifying Party and Indemnified Party and Indemnified Party shall have reasonably concluded that there may be legal defenses available to it which are inconsistent with or in addition to those available to Indemnifying Party, then Indemnified Party shall have the right to select separate counsel reasonably acceptable to Indemnifying Party to participate in the investigation and defense of and response to such claim, demand, action, proceeding, investigation or allegation on its own behalf at Indemnifying Party’s expense.

               (ii) If any claim, demand, action, proceeding, investigation or allegation arises as to which the indemnity provided for in this Section 13.4 applies, and Indemnifying Party fails to assume as soon as reasonably practical the defense of Indemnified Party, then Indemnified Party may contest (or, with the prior written consent of Indemnifying Party, settle) the claim, demand, action, proceeding, investigation or allegation at Indemnifying Party’s expense using counsel selected by Indemnified Party and reasonably acceptable to Indemnifying Party.

          (c) Notice of Losses. If Indemnified Party receives a written notice of Losses that Indemnified Party believes are covered by this Section 13.4, then Indemnified Party shall promptly furnish a copy of such notice to Indemnifying Party. The failure to so provide a copy of the notice to Indemnifying Party shall not excuse Indemnifying Party from its obligations under this Section 13.4; provided, that if Indemnifying Party is unaware of the matters described in the notice and such failure renders unavailable defenses that Indemnifying Party might otherwise assert, or precludes actions that Indemnifying Party might otherwise take to minimize its obligations hereunder, then Indemnifying Party shall be excused from its obligation to indemnify Indemnified Party against assessments, fines, costs and expenses, if any, which would not have been incurred but for such failure. For example, if Indemnified Party fails to provide Indemnifying Party with a copy of a notice of an obligation covered by the indemnity set out in Sections 13.4(a) and Indemnifying Party is not otherwise already aware of such obligation, and if as a result of such failure Indemnified Party becomes liable for penalties and interest covered by the indemnity in excess of the penalties and interest that would have accrued if Indemnifying Party had been promptly provided with a copy of the notice, then Indemnifying Party will be excused from any obligation to Indemnified Party to pay the excess and Indemnified Party shall indemnify Indemnifying Party with respect to any such excess.

          (d) Rights Cumulative. The rights of NYSCRF and the Company under this Article 13 shall be in addition to any other rights and remedies of NYSCRF and the Company against Liberty pursuant to CERCLA and NYSCRF and the Company each expressly retain any right of reimbursement or contribution thereunder.

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     14. NO ASSUMPTION

     14.1 No Assumption. The Company is not and is not deemed to be, a successor of Liberty, it being understood that Liberty is contributing to and the Company is acquiring only the Contributed Interests and the Purchase Money Loan Documents, subject to the Merger Loan, the Liberty Loan and the Assumed Financing, and the rights and obligations arising thereunder; and it is expressly understood and agreed that, except as may otherwise be expressly provided in this Agreement and in the documents delivered at the Closing, NYSCRF has not and does not hereby assume or agree to assume any liability whatsoever of Liberty.

     15. NOTICES

     15.1 Notices. Any notice, request, demand, instruction or other communication to be given to either party hereunder, except those required to be delivered at the Closing, shall be in writing, and shall be deemed to be delivered (a) upon receipt, if delivered by facsimile, (b) upon receipt or rejection if sent by hand delivery or (c) upon delivery to a nationally recognized overnight air courier service such as UPS or Federal Express, each addressed as follows:

If to NYSCRF:	New York State Common Retirement Fund
	c/o Office of the State Comptroller
	59 Maiden Lane, 30th Floor
	New York, NY 10038-4502
	Attn: Assistant Comptroller for Real Estate
	Fax No.: 212-383-1331
	Telephone No.: 212-383-1508
with additional copies to:	New York State Common Retirement Fund
	c/o Office of the State Comptroller
	59 Maiden Lane, 30th Floor
	New York, NY 10038-4502
	Attn: Assistant Deputy Counsel
	Fax No.: 212-681-1331
	Telephone No.: 212-383-1330
with additional copies to:	Heitman Capital Management LLC
	191 North Wacker Drive
	Suite 2500
	Chicago, IL 60606
	Attn: Jerome Claeys
	Fax No.: 312-251-5445
	Telephone No.: 312-541-6740
with additional copies to:	Cox, Castle & Nicholson LLP
	2049 Century Park East, 28th Floor
	Los Angeles, CA 90067-3284
	Attn: Amy H. Wells, Esq.
	Fax No.: 310-277-7889
	Telephone No.: 310-284-2233

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and with additional copies to:	Heitman Capital Management LLC
	191 North Wacker Drive
	Suite 2500
	Chicago, IL 60606
	Attn: Anthony Ferrante
	Fax No.: (312) 541-6789
	Telephone No.: (312) 251-5458
If to Liberty:	Liberty Property Limited Partnership
	500 Chesterfield Parkway
	Malvern, Pennsylvania 19355
	Attention: Mr. Michael T. Hagan
	Fax: 610-644-4129
	Phone No: (610) 648-1716
with additional copies to:	Wolf Block Schorr and Solis-Cohen LLP
	1650 Arch Street, 22nd Floor
	Philadelphia, Pennsylvania 19103-2097
	Attention: Herman C. Fala, Esquire
	Fax: 215-405-2976
	Phone No.: 215-977-2076

Any notice under this Agreement delivered prior to Closing by Liberty to NYSCRF or by NYSCRF to Liberty shall be deemed to be simultaneously delivered to and received by the Company.

     16. MISCELLANEOUS

     16.1 Entire Agreement. This Agreement and the exhibits attached hereto contain the entire agreement between the parties and supersede all prior and contemporaneous agreements or understandings. No modification or amendment of this Agreement shall be of any force or effect unless made in writing and executed by NYSCRF, Liberty and the Company.

     16.2 Counterparts. This Agreement may be executed in any number of counterparts which together shall constitute the agreement of the parties.

     16.3 Time of the Essence Time is of the essence with respect to the performance of all obligations provided herein and the consummation of all transactions contemplated hereby.

     16.4 Assignment. This Agreement, and the rights and obligations of NYSCRF hereunder, may be assigned by NYSCRF at any time without the consent of Liberty to any wholly owned affiliate of NYSCRF. Upon any such assignment by NYSCRF, NYSCRF shall remain liable for all of its obligations hereunder. In the event of any such assignment, Liberty agrees to close the transaction contemplated hereunder with the assignee of NYSCRF. Liberty may not assign this Agreement without the prior written consent of NYSCRF.

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     16.5 Dates. Whenever any determination is to be made or action is to be taken on a date specified in this Agreement, if such date shall fall on Saturday, Sunday or legal holiday under the laws of the Commonwealth of Virginia or District of Columbia, then in such event said date shall be extended to the next day which is not a Saturday, Sunday or legal holiday. All references in this Agreement to “the date hereof,” “the date of this Agreement” or similar references shall be deemed to refer to the date on which this Agreement has been executed and delivered by Liberty and NYSCRF.

     16.6 Binding on Successors and Assigns. This Agreement and the terms and provisions hereof shall inure to the benefit of and be binding upon the parties hereto and their respective successors and permitted assigns whenever the context so requires or admits.

     16.7 Records. NYSCRF shall not file this Agreement, nor any memorandum hereof, in any public records without the prior written consent of Liberty, and any such memorandum which is filed without such consent shall be, in Liberty’s sole discretion, automatically deemed null and void; provided that Liberty may file a copy of this Agreement as an exhibit to a filing it may make with the Securities and Exchange Commission (the “SEC”).

     16.8 Confidentiality and Public Disclosure. NYSCRF shall hold, and shall instruct all of its employees and agents to hold, all information furnished to it pursuant to this Agreement, and all information which it obtains pursuant to its inspection, testings and investigations undertaken in connection herewith in confidence except as and to the extent required by law. Liberty and NYSCRF covenant and agree that, prior to Closing, they will not issue any press releases or otherwise disclose the existence or terms of this Agreement and that they will each hold this Agreement and the particulars thereof and the parties thereto in confidence, except with the reasonable approval of the other party hereto and except as may be required by law, provided that the foregoing will not restrict the ability of Liberty to file this Agreement (and some or all of the exhibits) as an exhibit to a filing it may make with the SEC and to make disclosures regarding the transactions provided for by this Agreement to the extent Liberty reasonably believes necessary to enable Liberty to comply with securities laws and SEC regulations, the rules of any stock exchange, or the requirements of any filing or registration made by Liberty Property Trust as the issuer of publicly traded securities or as part of information provided to its investors and/or financial analysts. Liberty and NYSCRF shall work to prepare a joint press release, to be issued at Closing, respecting the transactions contemplated by this Agreement.

     16.9 Termination. Upon any termination permitted under the terms of this Agreement, NYSCRF and Liberty shall be automatically released and discharged from all further liability and obligations under and in connection with this Agreement, subject however, to the express provisions of this Agreement that provide for survival of certain agreements and indemnities. No termination of this Agreement shall be effective unless executed by the terminating party and delivered to the other party.

     16.10 Reporting Person. The Title Company is hereby designated as the “Reporting Person” pursuant to Section 6045 of the Code and the regulations promulgated thereunder.

     16.11 Paragraph Headings. .The paragraph headings contained in the Agreement are for convenience only and shall in no way enlarge or limit the scope or meaning of the various and several paragraphs hereof.

     16.12 Facsimile Signatures. Executed facsimile or electronically delivered copies of this Agreement shall be binding upon the parties herein, and facsimile or electronically delivered signatures appearing hereon shall be deemed to be original signatures. Following execution by facsimile or electronic delivery by both parties, NYSCRF shall execute four (4) originals of this Agreement and forward them by overnight courier to Liberty; Liberty shall execute such

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counterparts and deliver two of the same to NYSCRF the day following receipt thereof from NYSCRF.

     16.13 Exculpation.

          (a) No recourse shall be had for any obligation of Liberty under this Agreement or under any document executed in connection herewith or pursuant hereto, or for any claim based thereon or otherwise in respect thereof, against any past, present or future trustee, partner, officer or employee of Liberty, whether by virtue of any statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability being expressly waived and released by NYSCRF and the Company and all parties claiming by, through or under NYSCRF or the Company.

          (b) No recourse shall be had for any obligation of NYSCRF under this Agreement or under any document executed in connection herewith or pursuant hereto, or for any claim based thereon or otherwise in respect thereof, against any past, present or future trustee, shareholder, officer or employee of NYSCRF, whether by virtue of any statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability being expressly waived and released by Liberty and the Company and all parties claiming by, through or under Liberty or the Company.

     16.14 AS IS. THE PROPERTY IS BEING CONVEYED TO THE COMPANY (BY CONTRIBUTION OF THE CONTRIBUTED INTERESTS AND PURCHASE OF THE PURCHASED INTERESTS) ON AN “AS IS, WHERE IS” BASIS, AND LIBERTY MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO THE PROPERTY, THE PHYSICAL CONDITION, FITNESS FOR USE, TITLE OR ANY OTHER MATTER RELATING TO THE PROPERTY, EXCEPT AS EXPRESSLY AND SPECIFICALLY SET FORTH IN THIS AGREEMENT. NYSCRF REPRESENTS THAT IT IS KNOWLEDGEABLE OF REAL ESTATE AND THAT IT IS RELYING SOLELY ON ITS OWN EXPERTISE, THAT OF NYSCRF’S CONSULTANTS, AND THE REPRESENTATIONS AND WARRANTIES OF LIBERTY CONTAINED IN THIS AGREEMENT, SUBJECT, HOWEVER, TO THE LIMITATIONS CONTAINED HEREIN UPON SUCH REPRESENTATIONS AND WARRANTIES, AND THAT LIBERTY HAS OR SHALL HAVE AFFORDED NYSCRF WITH A FULL AND COMPLETE OPPORTUNITY TO MAKE ITS OWN INDEPENDENT INVESTIGATION OF THE PROPERTY AND ALL MATTERS PERTAINING THERETO DURING THE INSPECTION PERIOD INCLUDING, BUT NOT LIMITED TO, THE PHYSICAL AND ENVIRONMENTAL CONDITIONS THEREOF AND, UPON CLOSING, SHALL ASSUME THE RISK THAT ADVERSE MATTERS, INCLUDING, BUT NOT LIMITED TO, ADVERSE PHYSICAL AND ENVIRONMENTAL CONDITIONS, MAY NOT HAVE BEEN REVEALED BY NYSCRF’S INSPECTIONS AND INVESTIGATIONS. NYSCRF ACKNOWLEDGES AND AGREES THAT, UPON CLOSING, LIBERTY SHALL CONVEY TO THE COMPANY, BY CONVEYANCE OF THE CONTRIBUTED INTERESTS, THE PROPERTY “AS IS, WHERE IS” WITH ALL FAULTS, AND THERE ARE NO ORAL AGREEMENTS, WARRANTIES OR REPRESENTATIONS (EXCEPT AS HEREIN SPECIFICALLY PROVIDED), COLLATERAL TO OR AFFECTING ANY OF THE PROPERTY BY LIBERTY, ANY AGENT OF LIBERTY OR ANY THIRD PARTY. NYSCRF EXPRESSLY AGREES THAT THE TERMS AND CONDITIONS OF THIS PARAGRAPH SHALL SURVIVE THE CLOSING OR TERMINATION OF THIS AGREEMENT AND NOT MERGE THEREIN AND LIBERTY IS NOT LIABLE OR BOUND IN ANY MANNER BY ANY VERBAL OR WRITTEN STATEMENTS, REPRESENTATIONS, OR INFORMATION PERTAINING TO THE PROPERTY FURNISHED BY ANY REAL ESTATE BROKER, AGENT, EMPLOYEE,

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SERVANT OR OTHER PERSON, UNLESS THE SAME ARE SPECIFICALLY SET FORTH OR REFERRED TO IN THIS AGREEMENT.

     16.15 Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware and the laws of the United States applicable to transactions in Virginia and the District of Columbia without regard to the principles of conflicts of laws of any jurisdiction.

     16.16 Receipt of Written Notice Defined. Whenever in this Agreement the statement is made that Liberty has or has not received written notice of certain matters (such as, by way of example and not limitation, in Sections 4.1(b) or 13), “receipt of written notice” by Liberty, and words of similar import, shall mean the receipt of written notice by Liberty Property Trust or Liberty prior to the closing of the REIT Merger, and under no circumstances shall delivery of written notice to Republic Property Trust or its affiliates prior to the completion of the REIT Merger be deemed or imputed to be receipt of written notice by Liberty for purposes of this Agreement or the transactions contemplated hereby.

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     IN WITNESS WHEREOF, the parties have executed this Contribution Agreement as of the dates set forth below.

     EXECUTED by NYSCRF on the 4^th day of October , 2007.

NEW YORK STATE COMMON RETIREMENT FUND Thomas P. Dinapoli, Comptroller of the State of New York, as Trustee of the Common Retirement Fund
By:	/s/ NICK SMIRENSKY
	Name:	Nick Smirensky
	Title:	Deputy Comptroller

     EXECUTED by Liberty on the 1^st day of October , 2007.

LIBERTY:
LIBERTY PROPERTY LIMITED PARTNERSHIP, a Pennsylvania limited partnership
By:	Liberty Property Trust, its general partner
By:	/s/ MICHAEL T. HAGAN
Name:	MICHAEL T. HAGAN
Title:	CHIEF INVESTMENT OFFICER
By:	/s/ WILLIAM P. HANKOWSKY
Name:	WILLIAM P. HANKOWSKY
Title:	CHAIRMAN, PRESIDENT AND CEO

     EXECUTED by the Company on the 1st       day of       October_, 2007.

THE COMPANY:
LIBERTY WASHINGTON, LP
By: Liberty Washington Venture, LLC, its general partner
By: Liberty Property Limited Partnership, its sole member
By: Liberty Property Trust, its general partner
By:	/s/ MICHAEL T. HAGAN
Name:	MICHAEL T. HAGAN
Title:	CHIEF INVESTMENT OFFICER
By:	/s/ WILLIAM P. HANKOWSKY
Name:	WILLIAM P. HANKOWSKY
Title:	CHAIRMAN, PRESIDENT AND CEO

     The undersigned hereby acknowledges receipt of a fully executed original counterpart of this Agreement and agrees to perform the functions of Title Company hereunder as of the 2^nd day of Oct, 2007. The undersigned further assumes the duties of the “Reporting Person” as described in Section 6045 of the Code and the regulations promulgated thereunder.

TITLE COMPANY:
COMMONWEALTH LAND TITLE INSURANCE COMPANY
By:	/s/ ANDREA B. CONNORS
Name:	ANDREA B. CONNORS
Title:	VP/OFFICE MANAGER

EX-12

EXHIBIT 12 — STATEMENT RE: COMPUTATION OF RATIO
OF EARNINGS TO FIXED CHARGES
AND RATIO OF EARNINGS TO COMBINED FIXED CHARGES

LIBERTY PROPERTY TRUST / LIBERTY PROPERTY LIMITED PARTNERSHIP
(Amounts in thousands except ratio amounts)

	Year ended December 31,
	2007		2006		2005		2004		2003
Earnings before fixed charges:
Income before allocation of minority interest and income from investments in unconsolidated subsidiaries (1)	$	153,324	$	166,349	$	219,259	$	144,126	$	139,538
Add: Interest expense		125,138		107,545		106,950		94,836		94,793
Depreciation expense on cap’d interest		5,393		4,437		3,829		3,442		3,140
Amortization of deferred financing costs		4,163		3,969		4,045		3,551		3,307
Earnings before fixed charges	$	288,018	$	282,300	$	334,083	$	245,955	$	240,778
Fixed charges:
Interest expense	$	125,138	$	107,545	$	106,950	$	94,836	$	94,793
Amortization of deferred financing charges		4,163		3,969		4,045		3,979		4,015
Capitalized interest		45,697		30,837		17,748		13,242		10,947
Fixed charges		174,998		142,351		128,743		112,057		109,755
Preferred unit distributions		17,126		13,691		12,095		11,844		12,416
Combined fixed charges	$	192,124	$	156,042	$	140,838	$	123,901	$	122,171
Ratio of earnings to fixed charges		1.65		1.98		2.59		2.19		2.19
Ratio of earnings to combined fixed charges		1.50		1.81		2.37		1.99		1.97

(1) Amounts for the years ended December 31, 2007, 2006, 2005, 2004 and 2003 have been reclassified to present properties that have been sold during 2007. As a result, operations have been reclassified to discontinued operations from continuing operations for all periods presented.

EX-21

Exhibit 21

Liberty Property Trust
Liberty Property Limited Partnership
Liberty Lehigh Partnership
Liberty Property Philadelphia Limited Partnership
Liberty Property Philadelphia Limited Partnership II
Liberty Property Philadelphia Corporation
Liberty Property Philadelphia Trust
Liberty/Commerz 1701 JFK Boulevard, L.P.
Liberty Property Philadelphia Limited Partnership IV West
Liberty Property Philadelphia Corporation IV East
Liberty Property Philadelphia Corporation IV West
Liberty Property Philadelphia Corporation V
Liberty Property Philadelphia Limited Partnership V
Liberty Property Development Corp.
Liberty Property Development Corp. II
Liberty Special Purpose Trust
Liberty UK Development Corp.
LP Malvern Limited Partnership
LP Malvern LLC
Land Holdings Realty LLC
Rivers Business Commons Associates Limited Partnership
Liberty Property Philadelphia Navy Yard Limited Partnership
Liberty Property Philadelphia Navy Yard Corporation
Liberty Property/Synterra Limited Partnership
Liberty Venture I, LP
Liberty Venture I, LLC
Liberty Illinois, LP
Liberty Illinois Venture, LLC
L/S One Crescent Drive, LP
L/S One Crescent Drive, LLC
L/S Three Crescent Drive, LP
L/S Three Crescent Drive, LLC
L/S 4775 League Island Blvd., LP
L/S 4775 League Island Blvd., LLC
L/S 26^th Street South, LP
L/S 26^th Street South, LLC
Liberty West Allis, LLC
Liberty Deer Park, LLC
Liberty Delaware, LLC
Liberty Cotton Center, LLC
Liberty Cotton Center II, LLC
Liberty Property Lux, LLC
Annapolis Development, LLC
9755 Patuxent Woods Drive Trust
Perryman 159, L.L.C.

Liberty Stoneridge, LLC
Liberty Durham, LLC
Liberty 600 Industrial, G.P.
Liberty AIPO Limited Partnership
Liberty Washington, LP
Liberty Washington Venture, LLC
Republic 20^th Street LLC
Republic Property TRS LLC
Republic Park LLC
Dulles Tech Manager LLC
Dulles Tech LLC
RKB CP IV LLC
RKB Lakeside Manager LLC
RKB Lakeside LLC
RKB Corporate Oaks LLC
RPT Presidents Park LLC
Presidents Park I LLC
Presidents Park II LLC
Presidents Park III LLC
RPT Presidents Park Manager LLC
RKB Pender LLC
RPLP I LLC
RPT 1425 Investors LP
RPT 1425 Holdings LLC
RPT 1425 New York Avenue LLC
RKB WillowWood Manager LLC
RKB WillowWood LLC
RPB WillowWood I LLC
RPB WillowWood II LLC
Silversword Properties Limited
Cambridge Medipark Limited
Liberty Property Trust UK Limited
Kings Hill Estate Management Company Limited
Rouse Kent (Residential) Limited
Rouse Kent Developments Limited
Rouse Kent (Central) Limited
Rouse Kent (1 Tower View) Limited
Kings Hill Property Management Limited
Kings Hill Residential Estate Management Company Limited
iCO Didsbury Limited
Kings Hill Unit Trust
Liberty Property Trust Lux Sarl
Blythe Valley JV Sarl

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the following Registration Statements:

1)	Registration Statement (Form S-3 No. 333-120692),
2)	Registration Statement (Form S-3 No. 33-94782) ,
3)	Registration Statement (Form S-3 No. 333-22211),
4)	Registration Statement (Form S-3 No. 333-43267),
5)	Registration Statement (Form S-3 No. 333-39282) ,
6)	Registration Statement (Form S-3 No. 333-65592),
7)	Registration Statement (Form S-3 No. 333-125571) of Liberty Property Trust and Liberty Property Limited Partnership, and
8)	Registration Statement (Form S-3 No. 333-148614),
9)	Registration Statement (Form S-3 No. 333-14139),
10)	Registration Statement (Form S-8 No. 333-32244) pertaining to the Liberty Property Trust Amended and Restated Share Incentive Plan,
11)	Registration Statement (Form S-3 No. 333-53297),
12)	Registration Statement (Form S-3 No. 333-63115),
13)	Registration Statement (Form S-3 No. 333-37218),
14)	Registration Statement (Form S-3 No. 333-45032),
15)	Registration Statement (Form S-8 No. 333-62504) pertaining to the Liberty Property Trust Amended and Restated Share Incentive Plan,
16)	Registration Statement (Form S-8 No. 333-62506) pertaining to the Liberty Property Trust Amended and Restated Share Incentive Plan,
17)	Registration Statement (Form S-3 No. 333-63494),
18)	Registration Statement (Form S-3 No. 333-63978),
19)	Registration Statement (Form S-3 No. 333-91702),
20)	Registration Statement (Form S-3 No. 333-107482),
21)	Registration Statement (Form S-3 No. 333-108040),
22)	Registration Statement (Form S-3 No. 333-114609),
23)	Registration Statement (Form S-3 No. 333-118994),
24)	Registration Statement (Form S-3 No. 333-130948),
25)	Registration Statement (Form S-3 No. 333-125572), and
26)	Registration Statement (Form S-3 No. 333-122365) of Liberty Property Trust and in the related Prospectuses, and
27)	Registration Statement (Form S-8 No. 333-118995) pertaining to the Liberty Property Trust Amended and Restated Share Incentive Plan of our reports dated February 26, 2008, with respect to the consolidated financial statements and schedule of Liberty Property Trust, and the effectiveness of internal control over financial reporting of Liberty Property Trust, included in this Annual Report (Form 10-K) for the year ended December 31, 2007.

/s/ Ernst & Young LLP  

Philadelphia, Pennsylvania
February 26, 2008

EX-23.2

Exhibit 23.2

Consent of Independent Registered Public Accounting Firm

     We consent to the incorporation by reference in the Registration Statements:

1)	Registration Statement (Form S-3 No. 333-120692),
2)	Registration Statement (Form S-3 No. 33-94782),
3)	Registration Statement (Form S-3 No. 333-22211),
4)	Registration Statement (Form S-3 No. 333-43267),
5)	Registration Statement (Form S-3 No. 333-39282),
6)	Registration Statement (Form S-3 No. 333-65592), and
7)	Registration Statement (Form S-3 No. 333-125571);

of Liberty Property Trust and Liberty Property Limited Partnership and in the related Prospectuses of our reports dated February 26, 2008, with respect to the consolidated financial statements and schedule of Liberty Property Limited Partnership, and the effectiveness of internal control over financial reporting of Liberty Property Limited Partnership, included in this Annual Report (Form 10-K) for the year ended December 31, 2007.

/s/ Ernst & Young LLP  

Philadelphia, Pennsylvania
February 26, 2008

EX-31.1

Exhibit 31.1

LIBERTY PROPERTY TRUST

CERTIFICATIONS REQUIRED BY
RULE 13a-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934

I, William P. Hankowsky, certify that:

1. I have reviewed this Form 10-K of Liberty Property Trust;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

     (a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

     (b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

     (c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

     (d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting,

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

     (a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

     (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 28, 2008	By:	/s/ WILLIAM P. HANKOWSKY
		William P. Hankowsky
		Chairman, President and Chief Executive Officer

EX-31.2

Exhibit 31.2

LIBERTY PROPERTY TRUST

CERTIFICATIONS REQUIRED BY
RULE 13a-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934

I, George J. Alburger, Jr., certify that:

1. I have reviewed this Form 10-K of Liberty Property Trust;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

     (a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

     (b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

     (c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

     (d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting,

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

     (a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

     (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 28, 2008	By:	/s/ GEORGE J. ALBURGER, JR.
		George J. Alburger, Jr.
		Executive Vice President and Chief Financial Officer

EX-31.3

Exhibit 31.3

LIBERTY PROPERTY LIMITED PARTNERSHIP

CERTIFICATIONS REQUIRED BY
RULE 13a-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934

I, William P. Hankowsky, certify that:

1. I have reviewed this Form 10-K of Liberty Property Limited Partnership;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

     (a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

     (b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

     (c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

     (d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting,

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

     (a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

     (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 28, 2008	By:	/s/ WILLIAM P. HANKOWSKY
		William P. Hankowsky
		Chairman, President and Chief Executive Officer of Liberty Property Trust, the Registrant’s sole general partner

EX-31.4

Exhibit 31.4

LIBERTY PROPERTY LIMITED PARTNERSHIP

CERTIFICATIONS REQUIRED BY
RULE 13a-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934

I, George J. Alburger, Jr., certify that:

1. I have reviewed this Form 10-K of Liberty Property Limited Partnership;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

     (a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

     (b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

     (c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

     (d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting,

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

     (a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

     (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 28, 2008	By:	/s/ GEORGE J. ALBURGER, JR.
		George J. Alburger, Jr.
		Executive Vice President and Chief Financial Officer of Liberty Property Trust, the Registrant’s sole general partner

EX-32.1

Exhibit 32.1

LIBERTY PROPERTY TRUST

CERTIFICATIONS REQUIRED BY
RULE 13a-14(b) UNDER THE SECURITIES EXCHANGE ACT OF 1934

     In connection with the Annual Report of Liberty Property Trust (the “Company”) on Form 10-K for the year ended December 31, 2007 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, WILLIAM P. HANKOWSKY, President and Chief Executive Officer of the Company, certify in connection with Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended, that based on my knowledge:

     (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

     (2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ WILLIAM P. HANKOWSKY

William P. Hankowsky

Chairman, President and Chief Executive Officer

Date: February 28, 2008

EX-32.2

Exhibit 32.2

LIBERTY PROPERTY TRUST

CERTIFICATIONS REQUIRED BY
RULE 13a-14(b) UNDER THE SECURITIES EXCHANGE ACT OF 1934

     In connection with the Annual Report of Liberty Property Trust (the “Company”) on Form 10-K for the year ended December 31, 2007, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, GEORGE J. ALBURGER, JR., Executive Vice President and Chief Financial Officer of the Company, certify in connection with Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended, that based on my knowledge:

     (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

     (2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ GEORGE J. ALBURGER, JR. George J. Alburger, Jr.

Executive Vice President and Chief Financial Officer

Date: February 28, 2008

EX-32.3

Exhibit 32.3

LIBERTY PROPERTY LIMITED PARTNERSHIP

CERTIFICATIONS REQUIRED BY
RULE 13a-14(b) UNDER THE SECURITIES EXCHANGE ACT OF 1934

     In connection with the Annual Report of Liberty Property Limited Partnership (the “Company”) on Form 10-K for the year ended December 31, 2007, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, WILLIAM P. HANKOWSKY, President and Chief Executive Officer of Liberty Property Trust (the sole general partner of the Company), certify in connection with Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended, that based on my knowledge:

     (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

     (2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ WILLIAM P. HANKOWSKY William P. Hankowsky

Chairman, President and Chief Executive Officer

of Liberty Property Trust, the Company’s sole general partner

Date: February 28, 2008

EX-32.4

Exhibit 32.4

LIBERTY PROPERTY LIMITED PARTNERSHIP

CERTIFICATIONS REQUIRED BY
RULE 13a-14(b) UNDER THE SECURITIES EXCHANGE ACT OF 1934

     In connection with the Annual Report of Liberty Property Limited Partnership (the “Company”) on Form 10-K for the year ended December 31, 2007, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, GEORGE J. ALBURGER, JR., Executive Vice President and Chief Financial Officer of Liberty Property Trust (the sole general partner of the Company), certify in connection with Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended, that based on my knowledge:

     (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

     (2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ GEORGE J. ALBURGER, JR. George J. Alburger, Jr.

Executive Vice President and Chief Financial Officer

of Liberty Property Trust, the Company’s sole general partner

Date: February 28, 2008